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Penalties for using an illegal construction contract in North Dakota:
- North Dakota's Right to Repair Act, Century Code § 43-07-26, requires certain disclosures if the work consists of construction, improvement or repair of one- or two-family homes. Failure to provide the required disclosures is a class 2 misdemeanor punishable by up to 30 days in jail and a fine of $500 or both under North Dakota Century Code § 22-6-2.
- North Dakota Century Code § 47-14-05 voids any interest rate in the contract which exceeds the maximum permitted by law.
- Any attempt to shorten the time allowed to bring suit is void under North Dakota Century Code § 9-08-05.
- Contract provisions for retainage may not exceed the maximum allowed by North Dakota Century Code § 40-22-37 or § 43-07-23.
- Payment terms in a subcontract which do not comply with North Dakota Century Code § 13-01.1-06 subject the contractor to a charge of 1-3/4% per month for any delinquency.
- North Dakota Century Code § 9-08-04 voids any contract clause which sets a penalty for breach of contract.
- Failure to provide the cancellation notice required by North Dakota's Home Solicitation Sales Act (Century Code § 51-18-01 to § 51-18-09) is a class B misdemeanor (§ 51-18-09) and makes the contract void (§ 51-18-04.3). A class B misdemeanor is punishable by a maximum of thirty days in jail and a fine of up to one thousand dollars, or both (§ 12.1-32-01). Failure to comply with the Act is also a violation of North Dakota's Sales or Advertising Practices Act, Century Code Chapter 51-15.
- 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 North Dakota contractors avoid these penalties by complying with state and federal law.
The contracts linked below also comply with current North Dakota and federal court decisions.
The contracts linked below comply with the following North Dakota and federal laws:
- Attorney fees -- North Dakota Century Code § 28-26-01
- Complaint about a licensed contractor -- North Dakota Century Code § 43-07-14
- Excavation -- North Dakota Century Code § 49-23-04(1)
- Insulation disclosure -- 16 Code of Federal Regulation § 460
- Interest rates -- North Dakota Century Code § 47-14-05 and § 47-14-09
- Liquidated damages -- North Dakota Century Code § 9-08-04
- Misrepresentations by owner -- North Dakota Century Code § 9-03-08
- No lien contract -- North Dakota Century Code § 35-27-02
- Payment of contractors -- North Dakota Century Code § 48-01.2-13 and § 13-01.1-01
- Payment of subcontractors -- North Dakota Century Code § 13-01.1-06 and § 13-01.1-02
- Penalty for misdemeanor -- North Dakota Century Code § 22-6-2
- Retainage -- North Dakota Century Code § 40-22-37 and § 43-07-23
- Right of rescission -- 12 Code of Federal Regulations § 226.15
- Right to repair act – North Dakota Century Code § 43-07-26
- Statute of limitations -- North Dakota Century Code § 28-01-16 and § 9-08-05
- Statute of repose -- North Dakota Century Code § 28-01-44
- Third party beneficiaries -- North Dakota Century Code § 9-02-04
- Truth in lending -- 15 United States Code § 1638
Return to Penalties for Illegal Contracts in North Dakota.
The contracts linked below conform with current North Dakota and federal court decisions.
The contracts linked below comply with the following North Dakota and federal court decisions:
- Arbitration -- John T. Jones Construction Co. v. City of Grand Forks, 2003 ND 109
- Choice of law -- AG Acceptance Corp. v. Glinz, 2004 ND 154
- Consequential damages -- Construction Associates v. Fargo Water Equipment Company, 1989 N.D. LEXIS 166
- Contractor claims for delay -- Melka Marine Inc. v United States, 187 F.3d 1370, 1999
- Contractor liable for plan defect -- Dinger v. Strata Corp., 2000 ND 41, 2000
- Damages for delay -- North Dakota State Highway Department, 1985 N.D. LEXIS 281
- Defect in the plans -- Dinger v. Strata Corp., 2000 ND 41, 2000 and Rubin V. Coles, 253 N.Y.S. 808, 1931
- Defective work -- Shimek v. Vogel, 1960 N.D. LEXIS 91
- Differing site conditions -- Dan Nelson Construction, Inc. v. Nodland & Dickson, 2000 ND 61
- Excusable delay -- O&K Glass Co. v. Innes Construction Co., 2000 ND 56, 2000
- Fraudulent contract -- Raymond v. Edelbrock, 15 N.D. 231, 1906
- Indemnity -- Bridston v. Dover Corp., 1984 N.D. LEXIS 347
- Liability limits -- Reed v. University of North Dakota, 1999 ND 25, 1999
- Liquidated damages -- Coldwell Banker-First Realty v. Meide & Son, 1988 N.D. LEXIS 78
- Payment for extra work -- Trinity Builders v. Schaff, 1972 N.D. LEXIS 123
- Payment of subcontractors -- United Bank v. Trout, 1992 N.D. LEXIS 26
- Plan defects -- Murphy v. Kassis, 59 N.D. 35, 1930 and Dinger v. Strata Corp., 2000 ND 41, 2000
- Responsibility for safety -- Rogstad v. Dakota Gasification Co., 2001 ND 54, 2001
- Statute of limitations -- Snortland v. State, 2000 ND 162, 2000
- Termination by owner -- McWithy v. Heart River School District No. 22, 75 N.D. 744, 1948
- Third party beneficiary – U. S. ex rel. Davison v. York Electric Construction Co., 184 F. Supp. 520 (D.N.D. 1960)
- Warranty -- Dobler v. Malloy, 1973 N.D. LEXIS 101 and Barnes v. Mitzel Builders, 1995 N.D. LEXIS 7
- Workers' compensation -- Barsness v. General Diesel & Equipment Co., 1988 N.D. LEXIS 108
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Return to construction contract laws in North Dakota.
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