Legal Question in Construction Law in California

Basically, many home-improvement contracts are supposed to be in writing, legible and contain all the essential terms in understandable language. The applicable statute is Business & Professions Code section 7159. The following several sections of the B&P Code provide additional laws applying to special situations and other kinds of contracts.

Despite the law, there are several cases where the Court of Appeal has enforced an oral contract or an incomplete or unsigned written contract. Sometimes, the judges' theory was that the owner was an experienced professional investor or landlord, and the law was not intended to protect that kind of client. Other times, the courts have held that the client benefitted and the oral contract was fair, so in equity it ought to be enforced. In such cases, the contractor is usually allowed to recover the fair value, or the value of the benefits received by the owner/client, rather than the full contract price. In other words, the contractor may not make as much profit as he expected.

I would say that, in sum, a contractor should not take a chance on starting a job without a proper signed contract, but on the other hand, a homeowner should not expect to hide behind B&P 7159 to screw the contractor out of at least a fair payment for a job well done.

I agree with Mr. Whipple's answer but it is not the whole picture. There are other statutes that require certain content in construction contracts, such as the notice of lien rights, etc. He is right that in order to achieve substantial fairness courts may refuse to allow an owner to hide behind the absence of a written contract inorder to avoid paying for the work. But it is foolhardy to count on that. Every contractor should have a standard form contract at least that complies with all the notice requirements for the work to be done. Otherwise they may as well got to Vegas as do the work, for all the certainty they'll have that they will be paid and make a profit.