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Penalties for using an illegal construction contract in Indiana:
- A home improvement contract that does not comply with Indiana Code § 24-5-11 can not be enforced against the property owner and entitles the property owner to recover three times actual damages plus attorney fees. Non-compliance is also a deceptive practice under Indiana's consumer fraud statute and makes the contractor liable for a fine of up to $5,000.
- Failure to include the notice required by Indiana Code § 32-27-3-12 (opportunity to repair) forfeits the right to invoke claim settlement procedures available under Indiana law.
- Failure to comply with Indiana Code § 24-5-10 (home solicitation) is a class C infraction punishable by a $500 fine. An owner injured by a deceptive contract may collect damages up to $500. A willful deceptive act can make the contractor liable for three times actual damages or $1,000, whichever is greater, plus attorney fees.
- Failure to include the disclaimer statement in Indiana Code § 32-27-1-12 (home improvement) or § 32-27-2-8 (new home construction) results in an implied warranty of workmanlike construction or habitability.
- Violation of Indiana Code § 35-43-6 (home improvement fraud) is class A misdemeanor punishable by up to a year in jail and a $5,000 fine.
- Any attempt to waive lien rights in a non-residential contract may be void under Indiana Code § 32-28-3-16.
- Indiana Code § 20-2-5-1 voids any clause in a construction contract which requires indemnity of someone for their sole negligence.
- 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 Indiana contractors avoid these penalties by complying with state and federal law.
The contracts linked below also comply with current Indiana and federal court decisions.
The contracts linked below comply with the following Indiana and federal laws:
- Consumer fraud -- Indiana Code Annotated § 24-5-0.5-3 and § 24-5-0.5-4
- Final payment of contractors -- Indiana Code Annotated § 4-13.6-7-8
- Home Improvement Contracts Act -- Indiana Code Annotated § 24-5-11-1 to § 24-5-11-14
- Home Improvement Fraud Act -- Indiana Code Annotated § 35-43-6-1 to § 35-43-6-14
- Home Improvement Warranty Act -- Indiana Code Annotated § 32-27-1-1 to § 32-27-1-15
- Home Solicitation Sales Act -- Indiana Code Annotated § 24-5-10-1 to § 24-5-10-17
- Implied warranty – statute of limitations – Indiana Code Annotated § 34-11-2-7
- Indemnity -- Indiana Code Annotated § 26-2-5-1
- Insulation disclosure -- 16 Code of Federal Regulation § 460
- Interest on unpaid balances -- Indiana Code Annotated § 24-4.6-1-103
- Judgments -- Indiana Code Annotated § 34-28-5-4
- Mechanics' liens -- Indiana Code Annotated § 32-28-3-1
- New Home Construction Warranty Act -- Indiana Code Annotated § 32-27-2-1 to § 32-27-2-11
- No-lien contract -- Indiana Code Annotated § 32-28-3-16
- Notice and Opportunity to Repair Act -- Indiana Code Annotated § 32-27-3-1 to § 32-27-3-14
- Notice of excavation -- Indiana Code Annotated § 8-1-26-16
- Payment of subcontractors -- Indiana Code Annotated § 4-13.6-7-4
- Right of rescission -- 12 Code of Federal Regulations § 226.15
- Statute of limitations -- Indiana Code Annotated § 34-11-2-11
- Statute of repose -- Indiana Code Annotated § 32-30-1-5
- Truth in lending -- 15 United States Code § 1638
Return to Penalties for Illegal Contracts in Indiana.
The contracts linked below conform with current Indiana and federal court decisions.
The contracts linked below comply with the following Indiana and federal court decisions:
- Arbitration -- Precision Homes of Indiana, Inc. v. Pickford, 2006 Ind. App. LEXIS 420, 2006
- Choice of law -- JKL Components Corp. v. Insul-Reps, Inc., 1992 Ind. App. LEXIS 1142, 1992
- Claim for delay -- Lesh v. Trustees of Purdue University, 124 Ind. App. 422, 1953
- Concealed conditions -- Indianapolis v. Twin Lakes Enterprises, 1991 Ind. App. LEXIS 447, 1991
- Consequential damages -- Johnson v. Scandia Assocs., 1999 Ind. LEXIS 867, 1999
- Contractor claims for delay -- Indiana. Ind. DOT v. Shelly & Sands, Inc., 2001 Ind. App. LEXIS 1817, 2001
- Contractor claims for delay -- Melka Marine Inc. v United States, 187 F.3d 1370, 1999
- Extra work -- Oxford Development Corp. v. Rausauer Builders, Inc., 158 Ind. App. 622, 1973
- Indemnity -- Ft. Wayne Cablevision v. Indiana & Michigan Electric Co., 443 N.E.2d 863, 1983
- Limitation of actions -- Continental Ins. Co. v. Thornburg, 1966 Ind. App. LEXIS 399, 1966
- Liquidated damages -- Art Country Squire v. Inland Mortgage Corp., 745 N.E.2d 885, 2001
- Omission in the plans -- Millner v. Mumby, 1992 Ind. App. LEXIS 1465, 1992
- Site inspection -- Industrial Dredging v. Southern Indiana Gas, 840 F.2d 523, 1988
- Sole satisfaction -- Willig v. Dowell, 625 N.E.2d 476, 1993
- Third party rights -- Zurich-American Ins. Group v. Wynkoop, 2001 Ind. App. LEXIS 674, 2001
- Warranty (habitability) -- Dinsmore v. Fleetwood Homes of Tenn., Inc., 2009 Ind. App. LEXIS 818, 2009
- Warranty (statute of limitations) – Russo v. Southern Developers, Inc., 2007 Ind. App. LEXIS 1256, 2007.
- Warranty (workmanlike construction) -- Mullis v. Brennan, 1999 Ind. App. LEXIS 1482, 1999
Return to Penalties for Illegal Contracts in Indiana.
Return to construction contract laws in Indiana.
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