Construction Law

Consumers Cannot Waive Regulatory Requirement for Written Home Improvement Contracts

The Appellate Division recently denied a landscaping contractor?s suit to collect amounts due for extra work in addition to that called for in his contract for complete landscaping of the defendants? home. Online Contracting, Inc. v. Tripucka, No. A-2622-06 (App. Div., December 6, 2007). The defendants counterclaimed for treble damages and attorneys? fees under the Consumer Fraud Act (N.J.S.A. 56:8-1 to 116). The court concluded that the contractor?s failure to secure a written agreement for extras totaling $32,994 violated N.J.A.C. 13:45A-16.2(a)(12), which requires all home improvement contracts exceeding $500 to be memorialized by a writing signed by the parties, specifying the work to be performed and the materials to be used, and identifying the start and end date.

The contractor argued that the following language, included within the underlying agreement for landscaping purposes, authorized verbal change orders:

Any alteration or deviation from the description of the work listed above will be executed upon a written change order issued by the contractor and signed by the owner. The change order, whether it be verbal or in writing, will become an extra and will be billed to the owner at the daily rate provided in the [attached] equipment and labor price list.

Because the work was performed pursuant to the equipment and materials price list attached to the underlying contract, the contractor maintained that the contract clause did not violate the Consumer Fraud Act. Further, argued the contractor, the defendants should be estopped by their own conduct in verbally requesting the extras (a putting green and associated structures).

The court disagreed. Citing Scibek v. Longette, 339 N.J. Super. 72 (App. Div. 2001), an auto repair case, it pointed out that since the defendants had not induced the contractor to proceed with the extras without a writing, estoppel did not apply. ?Defendants? verbal directions to [plaintiff] to get the extras ?done? cannot be fairly characterized as ?the intentional relinquishment of a known right,? or a clear unequivocal ?act from which an intention to relinquish? a right can be drawn.? Online Contracting, Inc., supra, No. A-2622-06 at 4, citing Scibek, supra, 339 N.J. Super. at 82. In the absence of the required written agreement for the extras, the defendants could not be said to have intentionally relinquished their right to a written contract by a clear, unequivocal and decisive act.

The court added that the contractor could have preserved its right to collect for the extras simply by providing a written estimate and securing the defendants? written authorizations. Accordingly, it affirmed the trial court?s grant of attorneys? fees in accordance with the Consumer Fraud Act ( N.J.S.A. 56:8-19).

Full post as published by Construction Litigation Law Blog on November 30, 2007 (boomark / email).