The Contract Clauses That Decide Whether You Get Paid

Name your legal entity exactly as registered — not your trading name — and, where required, carry your licence number; several states mandate it appear on contracts and advertising, and a contract signed by an improperly licensed entity can be unenforceable. Then check the person signing has authority to. A spouse not on the deed, a tenant, or a property manager without written authority can all produce a contract you cannot enforce against whoever owns the building.

Scope determines what “finished” means. Vague scope is a customer-side weapon, because ambiguity is often construed against the party who drafted it — and that is you.

• ●Name the materials precisely. Manufacturer, product line, colour, and the accessories: underlayment, ice barrier, starter, hip and ridge, drip edge profile and gauge, valley treatment, ventilation product and quantity, fastener type. “Architectural shingles” is not a specification.
• ●State the areas covered. Detached garages, porches, bay window roofs and dormers get assumed in and assumed out by opposite parties on the same job.
• ●Describe the work, not just the product. Tear off to deck, layers removed, deck re-nailing if required, debris removal, magnetic sweep, protection of landscaping and driveway.
• ●Include the exclusions explicitly. Structural repair, gutters, fascia and soffit, chimney masonry, skylight replacement, satellite dishes, solar removal and reset, interior repairs, hazardous material abatement. Anything you have ever been asked to do for free belongs on this list.

You cannot see the deck until the roof is off, so price it in advance and bill it as used. State the unit — per sheet of a stated thickness, per board foot for plank decking — the price, and the requirement that quantities be photographed before the deck is covered. Do the same for anything else unknowable at signing: an additional layer on one slope, rot at a wall, code upgrades imposed at inspection. A unit price agreed before tear-off is a routine invoice line; the same work agreed after is a negotiation conducted from an open roof.

The change-order clause does two jobs: it establishes that additional work is authorised only in writing, signed by both parties, with price and schedule impact stated — and that verbal site conversations do not modify the contract. The discipline is harder than the drafting. A crew leader who agrees to “just do the porch while you’re here” has given away work and undermined the clause. Nothing extra happens until the change order is signed, and the customer has to hear that at signing so it does not feel like obstruction later.

Deductible language

Many states prohibit a contractor from paying, waiving, rebating or absorbing an insured’s deductible, and some require a specific statement in the contract confirming it will be collected. “We’ll cover your deductible” is unlawful in a number of jurisdictions, and dressing it up as a discount, an advertising credit or a referral bonus does not necessarily change that. Find out what your state requires before your contract or your marketing says anything on the subject.

Contingency agreements and scope

An agreement conditioned on the insurer approving the claim is common, and several states impose specific rules on them — required notice language, a right for the homeowner to cancel after the insurer’s decision, limits on cancellation fees. Assignment-of-benefits arrangements have also been restricted or reshaped by legislation in several states in recent years.

Write the contract to the scope of work, and be precise about what happens if the insurer’s approved scope differs from what you find. Note too that many states limit how far a contractor may go in negotiating a claim on the homeowner’s behalf before it constitutes public adjusting, a separately licensed activity.

The Federal Trade Commission’s Cooling-Off Rule (16 CFR Part 429) gives a buyer three business days to cancel certain sales made at their home, workplace or a seller’s temporary location. As revised effective March 2015 it applies to covered sales at a buyer’s residence priced at $25 or more, and $130 or more at other covered locations. Saturdays count as business days; Sundays and federal holidays do not. The seller must give notice of the right to cancel and the means to exercise it.

Three things make this more dangerous than it looks. States layer their own rescission rights on top, some longer than three days — insurance restoration contracts often carry their own window. The federal rule has exemptions and edge cases, including provisions relating to emergency repairs, whose application depends on the facts. And if the required notice is not given properly the cancellation period may not start running at all, leaving a customer able to cancel long after the roof is finished.

A mechanic’s or construction lien is the strongest collection tool a contractor has, and the one most often lost through paperwork. Nearly every state requires some combination of preliminary notice, notice of intent and a filing within a strict deadline. Miss it and the right is gone regardless of the merits.

• ●Some states require lien notice language in the contract itself, in specified wording and sometimes a specified typeface or position. This is a common reason a generic template fails.
• ●Deadlines run from events you must be able to prove. Record your first and last day on site on every job as routine.
• ●Your suppliers and subcontractors have lien rights too, which can attach to your customer’s property even where the customer has paid you. That is why waivers get exchanged, and why a customer asking for one is being reasonable rather than hostile.

Workmanship warranty. State the duration, what it covers, what it excludes — storm damage, other trades’ work, homeowner alterations — and whether it transfers on sale. Keep it distinct from the manufacturer’s product or system warranty, which has its own terms and generally requires registration and certified installation.

Dispute resolution and delay. Venue, governing law, mediation or arbitration, whether the prevailing party recovers attorney fees, and a clause excusing delay for causes outside your control so a rain week is not a breach. Enforceability varies — some states restrict binding arbitration in consumer home-improvement contracts. Have these drafted, not borrowed.