It was a $25,000 window-installation job, paid for with financing. The windows in question were vinyl on the outside and wood on the inside. After waiting for them to be installed, the homeowner suddenly insisted that he’d been deceived.“You tricked me,” he said. “I thought I was buying wooden windows!”
A fruitless discussion ensued and it became apparent that the homeowner simply wanted to pay less for the job. If the company responsible for the installation had offered him, say, $5,000 off, that would've been the end of it. But they didn’t and you can understand why. So it went to court.
In court, the judge inspected the contract for all of about one minute before saying, “I see here where the sales representative failed to print his name on X page. This is not a valid contract.” And since it wasn't, the job was done for free.
Courts are generally not a friendly place for contractors and the best policy is to do whatever you can to stay out of them. But what happened happened because of a simple failure to remain current when it comes to the law as it applies to home improvement contracts.
The law had changed and the company’s contracts hadn't been updated to reflect those changes. As a contractor, you need to know what the laws are in your state, how they apply to your business, and how and when they change. And the laws change all the time.
In this case, the updated law required that a valid contract have not only the salesperson’s signature on it, but his or her name printed as well. If you do business in New Jersey, that’s not the only regulation you need to be aware of. For instance, a home improvement contract in the Garden State has to have an approximate start and completion date. Without it, a contract could easily be held invalid when and if it comes into dispute.
Annual Check Up
My strong suggestion is that, once a year, you sit down with an attorney who specializes in home improvement law and go over any changes that have taken place or are likely to take place. Start by checking with your state’s consumer affairs division and/or your local NARI chapter. Here couple of other items to investigate:
- Is my insurance in order? This includes the “four fundamentals” (property/casualty, general liability, workers comp, and auto) and others. Is the truck that you bought in October covered by your company’s auto insurance policy? Does your workers comp coverage extend to all current employees?
- Is my company’s data backed up? Not too long ago I dropped my iPad. Naturally, I was scared stiff. It had not only my software and apps but a ton of jobsite photographs, contracts, and before-and-after pictures on it. The people at Apple said that the unit was a goner. But…because I’d been backing things up on the Cloud, everything was restored within hours.
Bottom line, it’s easy to take for granted that you’re covered but it’s not fun finding out when you’re not.
—Sales veteran and trainer Mike Damora has been the sales manager at several large home improvement companies. Reach him at email@example.com.