Texas Construction Contracts: Tips for Contractors to Avoid Illegal Contracts

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Construction contracts are subject to both state and federal laws. In Texas, there are many rules requiring specific disclosures and clauses in your construction contract. The same is true at the federal level. Many, if not most contractors are unaware of construction contract law, and are unaware of the great risk they face. Violating construction contract laws will subject your construction company to serious fines and potentially large lawsuits. To avoid these problems, get an experienced business lawyer to draft your Texas construction contracts.

Texas Construction Contract Law

Before a customer signs a construction contract, you must first deliver a two-page disclosure required by Texas construction contact law. This doesn’t just apply to new construction or major remodeling projects – the statute applies even to repairs of existing structures. Texas construction contract law also requires a very specific statement about the right to repair. Failure to include this notice entitles a home owner to recover $500 from a contractor.

Contractors are also at risk when they fail to include a required disclosure about home owners’ rights and risks in a construction contract. Failure to include the required provisions constitutes a false, misleading, or deceptive act and enables a homeowner to recover triple damages plus attorney’s fees.

Federal Construction Contract Law

Many contractors have probably heard about the three day cancellation rule that allows customers to cancel a construction contract. However, many construction companies are unaware that federal law extends the three-day rule to three years if your construction contract doesn’t have the right provisions. Another federal law requires certain disclosures in construction contracts involving purchase or installation of insulation. Failure to follow the law can result in a fine of $11,000.

Construction contract law is something you simply can’t learn on the jobsite. However, failure to get an attorney to draft your construction contracts can certainly shut down your jobsite. Our firm regularly advises clients in contract matters, call today to make sure you’re on the right track.

Contact an Austin Business Lawyer.


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