Penalties for using an illegal construction contract in Minnesota:
- Omission of the required warranties in a residential contract is equivalent to making a false statement under § 326B.084 and makes the contractor liable for a fine up to $10,000 under § 326B.082(7)(a) and (b). Effective August 1, 2009.
- Any payment term in a construction contract which does not comply with Minnesota Statutes § 337.10(3) is null and void.
- Any contract clause which would require indemnification of someone for their own negligence is void under Minnesota Statutes § 337.02.
- Any contract clause which would waive lien rights prior to payment is void under Minnesota Statutes § 337.10(2).
- A contractor’s or subcontractor’s failure to provide the pre-lien notice required by Minnesota Statutes § 514.011 can result in the loss of lien rights.
- 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 Minnesota contractors avoid these penalties by complying with state and federal law
The contracts linked below also comply with current Minnesota and federal court decisions