California Home Improvement Contract

HOME IMPROVEMENT CONTRACT

Notice of Cancellation may be sent to the contractor at the address noted on the contract.

THIS HOME IMPROVEMENT CONTRACT (“Contract”), effective as of the date of the last party to sign below , is between , having an address at (“Contractor”) and , having an address at (“Owner”).

For valuable consideration the parties hereby agree as follows:

1. LIST OF DOCUMENTS TO BE INCORPORATED INTO THIS CONTRACT:

EXHIBIT A – Commercial General Liability Insurance

EXHIBIT B – Workers’ Compensation Insurance

EXHIBIT C – 3 day right to cancel

EXHIBIT D – 7 day right to cancel

EXHIBIT E – Sample change order form

The above mentioned Exhibits are hereby incorporated in and made part of this Contract.

2. DESCRIPTION OF THE PROJECT AND DESCRIPTION OF THE SIGNIFICANT MATERIALS TO BE USED AND EQUIPMENT TO BE INSTALLED:

(a) Project description:

(b) Significant materials to be used:

a. Materials to be provided by the Contractor:

b. Materials to be provided by the Owner:

(c) Equipment to be Installed:

(delete (a) through (c) above if the contractor and owner have developed drawings and specifications covering everything mentioned above OR delete the section below describing drawings and specifications if you and the customer choose to write all the necessary Project information above. Delete this boxed section also.

Contractor shall provide the materials and perform the work described in the written drawings and specifications indicated in Section 1 above. Such drawings and specifications shall describe the project, specify materials to be used, which party is responsible for providing such materials, and equipment to be installed.

3. WORK SITE: The Project shall be constructed on the property of Owner located at and more particularly described as (hereafter "the Work Site").

4. COMMENCEMENT AND COMPLETION OF WORK TO BE PERFORMED:

(a) The following describes how Contractor shall substantially commence work:

(b) APPROXIMATE START DATE:

(c) APPROXIMATE DATE OF SUBSTANTIAL COMPLETION:

Contractor shall not be liable, or in breach of this Contract, for any delay due to circumstances beyond its control including strikes, casualty, acts of God, or general unavailability of materials.

5. PERMITS: Contractor shall apply for and obtain such permits and regulatory approvals as may be required by the local municipal/county government, the cost thereof shall be included as part of the Project price.

6. SOIL CONDITIONS: Contractor shall have no responsibility for the condition of the soils at the Work Site. Any excavation, filling or other work required by the Owner other than the usual and customary excavation and grading shall be agreed to in a Change Order for an amount in addition to the Contract Price. Contractor shall not be responsible for any damages suffered by Owner as a result of the soil conditions at the Work Site.

7. INSURANCE: Contractor shall maintain general liability, workers compensation and builder's risk insurance.

8. SURVEY AND TITLE: If the Project is near the Owner’s property boundary, Owner will point out property lines to the Contractor. If the Owner or Contractor has any doubt about the location of the property lines, Owner shall provide Contractor with boundary stakes through a licensed surveyor. In addition, Owner shall provide Contractor documentation that Owner has title to the Work Site and shall provide Contractor copies of any covenants, conditions, or restrictions that affect the Work Site.

9. EXTRA WORK AND CHANGE ORDERS: Extra work and change orders become part of this Contract once the order is prepared in writing and signed by both parties prior to the commencement of any work covered by the new change order. The order must describe the scope of the extra work or change, the cost to be added or subtracted from the Contract, and the effect the order will have on the schedule of progress payments (if applicable) or the completion date.

10. PRICING

(a) CONTRACT PRICE:

{COST PLUS}

Owner agrees to pay Contractor the actual cost to Contractor of materials plus the sum of $ for performing the services set forth in the scope of the work. Contractor shall be paid as follows:

OR

{FIXED FEE}

Owner agrees to pay Contractor the sum of $ for performing the services set forth in the scope of the work. Contractor shall be paid as follows:

(b) DOWN PAYMENT:

Amount: $

(c) SCHEDULE OF PROGRESS PAYMENTS:

11. LATE PAYMENT/DEFAULT: A failure to make payment for a period in excess of ten (10) days from the due date shall be deemed a material breach of this Contract. If payment is not made when due, Contractor may suspend work on the job until such time as all payments due have been made without breach of the Contract pending payment or resolution of any dispute. Owner agrees to pay a late charge of 1% of all payments that are more than ten (10) days late plus interest at the rate of 1% per month.

12. DESTRUCTION AND DAMAGE: If the Project is destroyed or damaged for any reason, except where such destruction or damage was caused by the sole negligence of the Contractor or its subcontractors, Owner shall pay Contractor for any additional work done by Contractor in rebuilding or restoring the Project to its condition prior to such destruction or damage. If the estimated cost of replacing work already accomplished by Contractor exceeds 20 percent of the Contract price, either the Contractor or Owner may terminate this Contract. Upon termination by either party, Contractor shall be excused from further performance under this Contract and Owner shall pay Contractor a percentage of the Contract price in proportion to the amount of work accomplished prior to the destruction or damage.

13. ASSIGNMENT: Neither party may assign this Contract, or payments due under the Contract, without the other party’s written consent. Any such assignment shall be void and of no effect.

14. INTERPRETATION:

(a) Interpretation of Documents. The Contract, drawings, and specifications are intended to supplement one another. In the event of a conflict, the specifications shall control the drawings, and the Contract shall control both. If work is displayed on the drawings but not called for in the specifications, or if the work is called for in the specifications but not displayed on the drawings, Contractor shall be required to perform the work as though it were called for and displayed in both documents.

(b) Entire Agreement. This Contract constitutes the entire agreement of the parties. No other agreements, oral or written, pertaining to the work to be performed under this Contract exists between the parties. This Contract may only be modified only by a written agreement signed by both parties.

(c) Governing Law. This Contract shall be interpreted and governed in accordance with the laws of the State of California.

15. ATTORNEYS’ FEES AND COSTS: If any party to this Contract brings a cause of action against the other party arising from or relating to this Contract, the prevailing party in such proceeding shall be entitled to recover reasonable attorney fees and court costs.

16. PERFORMANCE:

(a) Contractor may, at its discretion, engage licensed subcontractors to perform work pursuant this Contract provided Contractor shall remain fully responsible for the proper completion of the Project.

(b) All work shall be completed in a workman-like manner and in compliance with all building codes and applicable laws. To the extent required by law, all work shall be performed by individuals duly licensed and authorized by law to perform said work.

(c) Contractor agrees to remove all debris and leave the premises in broom clean condition.

17. WARRANTY: Contractor's warranty shall be limited to defects in workmanship within the scope of work performed by Contractor and which arise and become known within one (1) year from the date hereof. All said defects arising after one (1) year and defects in material are not warranted by Contractor. Contractor hereby assigns to Owner all warranties on materials as provided by the manufacturer of such materials.

18. REQUIRED NOTICES:

(a) You are entitled to a completely filled in copy of this Contract, signed by both you and the Contractor, before any work may be started.

(b) A notice concerning commercial general liability insurance is attached to this Contract.

(c) A notice concerning workers’ compensation insurance is attached to this Contract.

(d) Change Orders:

i. The Owner may not require a Contractor to perform extra or change-order work without providing written authorization prior to the commencement of any work covered by the new change order.

ii. Extra work or a change order is not enforceable against a buyer unless the change order identifies all of the following in writing prior to the commencement of any work covered by the new change order: (i) the scope of work encompassed by the order; (ii) the amount to be added or subtracted from the Contract price; and (iii) the effect the order will make in the progress payments (if applicable) or the completion date.

iii. A Contractor’s failure to comply with the requirements for a change order does not preclude the Contractor’s recovery of compensation for work performed based upon legal or equitable remedies designed to prevent unjust enrichment.

(e) MECHANICS LIEN WARNING: Anyone who helps improve your property, but who is not paid, may record what is called a mechanics' lien on your property. A mechanics' lien is a claim, like a mortgage or home equity loan, made against your property and recorded with the county recorder. Even if you pay your contractor in full, unpaid subcontractors, suppliers, and laborers who helped to improve your property may record mechanics' liens and sue you in court to foreclose the lien. If a court finds the lien is valid, you could be forced to pay twice or have a court officer sell your home to pay the lien. Liens can also affect your credit.

(f) Information about the Contractors' State License Board (CSLB): CSLB is the state consumer protection agency that licenses and regulates construction contractors. Contact CSLB for information about the licensed contractor you are considering, including information about disclosable complaints, disciplinary actions, and civil judgments that are reported to CSLB. Use only licensed contractors. If you file a complaint against a licensed contractor within the legal deadline (usually four years), CSLB has authority to investigate the complaint. If you use an unlicensed contractor, CSLB may not be able to help you resolve your complaint. Your only remedy may be in civil court, and you may be liable for damages arising out of any injuries to the unlicensed contractor or the unlicensed contractor's employees.

Right to Cancel

(a) Under certain circumstances the law gives you a right to cancel a contract. Check the appropriate box below describing your right to cancel this Contract:

i. This Contract was negotiated at the Contractor’s place of business. Consequently, the law does not provide a right to cancel.

ii. This Contract was not negotiated at the Contractor’s place of business. Consequently, the law requires that the Contractor give you a notice explaining your right to cancel. Initial the checkbox if the Contractor has given you a “Notice of the Three-Day Right to Cancel.”

iii. This Contract is for the repair or restoration of residential premises damaged by any sudden or catastrophic event... Initial the checkbox if the Contractor has given you a “Notice of the Seven-Day Right to Cancel.”

AGREED:

The owner or tenant has the right to require the contractor to have a performance and payment bond.

EXHIBIT A

COMMERCIAL GENERAL LIABILITY INSURANCE

Contractor must check the box that applies

This Contractor does not carry commercial general liability insurance.

This Contractor carries commercial general liability insurance written by (“Insurance Company”). You may call the Insurance Company at to check Contractor’s insurance coverage.

This Contractor is self-insured.

This Contractor is a limited liability company that carries liability insurance or maintains other security as required by law. You may call at to check Contractor’s insurance coverage or security.

EXHIBIT B

WORKERS’ COMPENSATION INSURANCE

Contractor must check the box that applies

This Contractor has no employees and is exempt from workers’ compensation requirements.

This Contractor carries workers’ compensation insurance for all employees.

EXHIBIT C

3 DAY RIGHT TO CANCEL

Notice of Cancellation

Date last party signed the Contract:

Name of Seller (Contractor or Salesman):

Address of Seller’s Place of Business:

Cancel not later than midnight of:

I hereby cancel this transaction. Date:

Owner’s Signature:

Print Owner’s Name:

EXHIBIT D

7 DAY RIGHT TO CANCEL

Notice of Cancellation

Date last party signed the Contract:

Name of Seller (Contractor or Salesman):

Address of Seller’s Place of Business:

Cancel not later than midnight of:

I hereby cancel this transaction. Date:

Owner’s Signature:

Print Owner’s Name:

EXHIBIT E

SAMPLE CHANGE ORDER

A. Scope of work encompassed by this change order:

B. Amount to be added or subtracted from the Contract price:

C. Effect this change order will have on progress payments (if applicable):

D. Effect this change order will have on the estimated completion date:

AGREED:

Checklist for Homeowners

Check Out Your Contractor

Did you contact the Contractors State License Board (CSLB) to check the status of the contractor's license?

Contact the CSLB at 1-800-321-CSLB (2752) or visit our web site: www.cslb.ca.gov.

Did you get at least 3 local references from the contractors you are considering?

Did you call them?

Building Permits - will the contractor get a permit before the work starts?

Check Out the Contract

Did you read and do you understand your contract?

Does the 3-day right to cancel a contract apply to you?

Contact the CSLB if you don't know.

Does the contract tell you when work will start and end?

Does the contract include a detailed description of the work to be done, the material to be used, and equipment to be installed?

This description should include brand names, model numbers, quantities and colors. Specific descriptions now will prevent disputes later.

Are you required to pay a down payment?

If you are, the down payment should never be more than 10% of the contract price or $1,000, whichever is less.

Is there a schedule of payments?

If there is a schedule of payments, you should pay only as work is completed and not before. There are some exceptions - contact the CSLB to find out what they are.

Did your contractor give you a “Notice to Owner,” a warning notice describing liens and ways to prevent them?

Even if you pay your contractor, a lien can be placed on your home by unpaid laborers, subcontractors or material suppliers. A lien can result in you paying twice or, in some cases, losing your home in a foreclosure. Check the “Notice to Owner” for ways to protect yourself.

Did you know changes or additions to your contract must be in writing? Putting changes in writing reduces the possibility of a later dispute.