Penalties for using an illegal construction contract in Michigan:
- Failure to include the notices and disclosures required by the Home Solicitation Sales Act makes the contract unenforceable under Michigan Compiled Laws § 445.117. Failure to provide a Notice of Cancellation or the statement required by Michigan Compiled Laws § 445.113(1) gives an owner the right to cancel a contract for residential, industrial, commercial or public works construction at any time until three days after the notice and statement have been received.
- No payment is due until the contract complies with the Home Improvement Finance Act, Michigan Compiled Laws § 445.1101 to § 445.1209.
- Michigan Compiled Laws § 570.1115 invalidates any clause in a construction contract which would waive lien rights before the work has been done.
- Michigan Compiled Laws § 691.991 voids any attempt in a construction contract to indemnify someone for their own sole negligence.
- Omission of federal truth in lending disclosures required by 15 United States Code § 1638 makes the creditor liable for both the overcharge and the debtor's attorney fees.
- Omission of disclosures required by 12 Code of Federal Regulations § 226.15 extends the right of rescission to three years (rather than three days).
- Omission of insulation disclosures required by 16 Code of Federal Regulation § 460 can result in an $11,000 fine.
The contracts linked below will help Michigan contractors avoid these penalties by complying with state and federal law
The contracts linked below also comply with current Michigan and federal court decisions