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Penalties for using an illegal construction contract in Michigan:
- Failure to include the notices and disclosures required by the Home Solicitation Sales Act makes the contract unenforceable under Michigan Compiled Laws § 445.117. Failure to provide a Notice of Cancellation or the statement required by Michigan Compiled Laws § 445.113(1) gives an owner the right to cancel a contract for residential, industrial, commercial or public works construction at any time until three days after the notice and statement have been received.
- No payment is due until the contract complies with the Home Improvement Finance Act, Michigan Compiled Laws § 445.1101 to § 445.1209.
- Michigan Compiled Laws § 570.1115 invalidates any clause in a construction contract which would waive lien rights before the work has been done.
- Michigan Compiled Laws § 691.991 voids any attempt in a construction contract to indemnify someone for their own 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 Michigan contractors avoid these penalties by complying with state and federal law.
The contracts linked below also comply with current Michigan and federal court decisions.
The contracts linked below comply with the following Michigan and federal laws:
- Arbitration -- Michigan Compiled Laws § 339.2411
- Asbestos -- Michigan Compiled Laws § 338.3219 and § 338.3220
- Building Contract Fund Act -- Michigan Compiled Laws § 570.151, § 570.152, and § 570.153
- Contract requirements – Michigan Administrative Code R 338.1533
- Differing site conditions – Michigan Compiled Laws § 125.1592
- Excavation -- Michigan Compiled Laws § 460.705
- Home Improvement Finance Act -- Michigan Compiled Laws § 445.1101 to § 445.1209
- Home improvement penalties -- Michigan Compiled Laws § 339.602
- Home Solicitation Sales Act -- Michigan Compiled Laws § 445.111 to § 445.117
- Indemnity -- Michigan Compiled Laws § 691.991
- Insulation disclosure -- 16 Code of Federal Regulation § 460
- Interest rate – Michigan Compiled Laws § 600.6013
- No lien contract -- Michigan Compiled Laws § 570.1115
- Right of rescission -- 12 Code of Federal Regulations § 226.15
- Statute of limitations -- Michigan Compiled Laws § 600.5807 and § 600.5833
- Statute of repose -- Michigan Compiled Laws § 600.5839
- Third party rights -- Michigan Compiled Laws § 600.1405
- Truth in lending -- 15 United States Code § 1638
- Warranty, disclaimer – Michigan Compiled Laws § 440.2316
- Warranty, merchantability – Michigan Compiled Laws § 440.2314
Return to Penalties for Illegal Contracts in Michigan.
The contracts linked below conform with current Michigan and federal court decisions.
The contracts linked below comply with the following Michigan and federal court decisions:
- Attorney fees -- Smith v. Khouri, 481 Mich. 519, 2008
- Changes in the work -- Dault v. Schulte, 31 Mich. App. 698, 1971
- Choice of law – Chrysler Corp. v. Skyline Industrial Services, 448 Mich. 113, 1995
- Claim for delay -- Goyette Mech. Co. v. Washtenaw Community College, 2003 Mich. App. LEXIS 2902, 2003
- Consequential damages – Lawrence v. Will Darrah & Assocs., 445 Mich. 1, 1994
- Construction schedule – E. C. Nolan Co. v. State, 58 Mich. App. 294, 1975
- Contractor claims for delay -- Melka Marine Inc. v United States, 187 F.3d 1370, 1999
- Delay -- Walter Toebe & Co. v. Department of State Highways, 144 Mich. App. 21, 1985
- Disclaimer by owner – Valentini v. Adrian, 347 Mich. 530, 1957
- Excusable delay – Ben Agree Co. v. Sorensen-Gross Constr. Co., 365 Mich. 185, 1961
- Indemnity -- Sentry Ins. Co. v. National Steel Corp., 147 Mich. App. 214, 1985
- Liquidated damages -- Daoudi v. Adkins, 2008 Mich. App. LEXIS 1428, 2008
- Omission in the plans -- Kensington Corp. v. State, 74 Mich. App. 417, 1977
- Payment of Subcontractors -- Christman Co. V. Anthony S. Brown Dev. Co., 210 Mich. App. 416, 1995
- Statute of limitations -- Buckley v. Small, 52 Mich. App 454, 1974
- Statute of limitations -- Rory v. Continental Insurance Co., 473 Mich. 457, 2005
- Third party rights -- Greenless v. Owen Ames Kimball CO., 340 Mich. 670, 1954
- Warranty, disclaimer -- McCann v. Brody-Built Construction Co., 197 Mich. App. 512, 1992
- Warranty, habitability -- Kisiel v. Holz, 272 Mich. App. 168, 2006
Return to Penalties for Illegal Contracts in Michigan.
Return to construction contract laws in Michigan.
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