By now, many of you know that New Jersey has one of the strictest consumer fraud statutes in the nation. The Consumer Fraud Act prohibits “any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission in connection with the sale or advertisement of any merchandise or real estate”. More simply, the Act may be violated in one of three different ways: by affirmative misrepresentation, knowing omission or by violation of specified regulations.
As an example, a building contractor agrees to replace all of the windows in a house, specifying that he will use all Pella brand windows. However, in fact he installs some generic, no name windows. The homeowner becomes aware of this “bait and switch”. S/he is entitled to sue the contractor for treble damages in the amount of three times the loss, as well as attorneys fees.
It may be that in many cases, the contractor will have a complete defense to the homeowner’s claim, by virtue of the fact that the homeowner is not familiar with construction practices and may misunderstand the situation. However, even if the contractor is found to be blameless in the performance of the home improvement contract, s/he may still have a legal problem.
Pursuant to the New Jersey Consumer Fraud Act, home improvement regulations have been adopted. Some of them are fairly obvious, as the need for the contractor to be licensed and insured, and the need for the home improvement contract to be in writing. However, some of the information to be included in the contract may be surprising to the contractor, such as the requirement that the name of the individual making the contract on behalf of the contractor (typically a corporation or LLC) must be included on the contract. There are in fact numerous terms that must be included in a New Jersey home improvement contract.
If the homeowner sues the contractor and is able to prove that the wording of the contract does not comply with the home improvement regulations, the contractor may be liable to pay the homeowner’s legal fees.
It is imperative that every contractor seek a consultation and review of their current contract with experienced legal counsel, to see whether amendments, changes and additions should be made to shield the contractor from liability under the Consumer Fraud Act and regulations. Call Mr. Whelan for an appointment today.