Penalties for using an illegal construction contract in New Jersey:
- New Jersey Administrative Code § 13:45A-16.1 to 16.2 (Home Improvement Practices) and New Jersey Administrative Code § 13:45A-17.1 to 17.14 (Home Improvement Contractor Registration) require that all home improvement contracts for more than $500 and all changes to the terms of those contracts be in writing and include extensive disclosures. Failure to comply with the code is a violation of New Jersey's Consumer Fraud Act. Penalties for violation can include a refund of all money collected (New Jersey Statutes § 56:8-2.11) or treble damages plus legal fees (New Jersey Statutes § 56:8-19).
- Failure to disclaim warranties under New Jersey Statutes § 12A:2-316 results in an implied warranty of both merchantability and fitness for purpose.
- Omission of the notice required by New Jersey Statutes Annotated § 17:16C-63 (home repair financing) can result in a $500 fine (§ 17:16C-64.3) and may bar recovery of finance charges (§ 17:16C-64.4).
- Omission of the notice required by New Jersey Statutes Annotated § 17:16C-100 (home repair) risks a fine up to $500 (§ 17:16C-102), makes the contractor liable for the owner's attorney fees (§ 17:16C-101) and other penalties (§ 17:16C-103).
- Failure to make federal truth-in-lending disclosures requires restitution of the overcharge.
- Failure to include the disclosures required by 12 Code of Federal Regulations § 226.15 extends the right of rescission to three years (rather than three days).
- Omitting insulation disclosures required by 16 Code of Federal Regulations § 460 can result in an $11,000 fine.
The contracts linked below will help New Jersey contractors avoid these penalties by complying with state and federal law
The contracts linked below also comply with current New Jersey and federal court decisions