In New Jersey, consumer fraud laws require every “home improvement contract” for a price in excess of $500, and all changes to the contract, to be in a writing signed by all of the parties.  The contract must “clearly and accurately set forth in legible form and in understandable language all terms and conditions of the contract.”  A failure to adhere to these requirements can result in non-payment for work and significant penalties.

Recently, in Murnane v. Finch Landscaping, Inc., 21 A.3d 637 (N.J. Super. 2011), the Court emphasized the breadth of New Jersey’s consumer fraud laws regarding the residential construction industry.  In this case, a homeowner engaged a contractor to install a patio.  Along the way, the parties discussed oral changes to the work, but did not reduce those changes to a signed writing.  The contractor later invoiced the plaintiff for these changes and the plaintiff sued the contractor, asserting violations of consumer fraud laws.  The Court concluded that the patio contract was subject to New Jersey consumer fraud laws and that the homeowner had a “meritorious” claim against the contractor. 

Residential construction contractors should pay close attention to the consumer fraud laws in New Jersey and other states in which they work.  Learn from the Murnane case.  Agreements and changes to agreements should be in writing, and they should be signed by everyone.  The failure to do this could result in the loss of money for work and stiff penalties.  All of this can be avoided with planning. 

Likewise, homeowners hiring contractors should be aware of law and the remedies it provides.