Even the best contractors and construction companies are vulnerable to claims of fraud. The typical situation occurs where a contractor completes a job, but the owner does not want to make the final payment. When the contractor attempts to collect, the owner threatens a fraud or consumer fraud claim as a way to try to avoid having to pay for the work. Contractors are especially vulnerable in residential construction, because of the technical requirements of the New Jersey Consumer Fraud Act governing home improvement contractors are little known and strictly enforced.
Defending Claims of Fraud Against ContractorsFraud occurs when one party makes a misrepresentation of important facts on which the other party relies to its detriment. Normally in construction contracts these misrepresentations must be made before the contract is signed, and the other party must have relied on these misrepresentations in deciding to enter into the contract. A successful claim of fraud can result in the contract being ordered to pay the owners damages plus punitive damages.
Our attorneys have handled many claims of fraud, and utilize all the defenses available under New Jersey construction law. We fight aggressively for our clients’ rights. The most important thing to do, however, is to build a strong case backed by solid evidence to show that not only didn’t the contractor commit fraud, but that the owner got exactly what she contracted for.
Defending Contractors Against Claims of Consumer Fraud on Residential Construction ProjectsA greater problem is the regulations governing the New Jersey Consumer Fraud Act. These requirements are quite technical, indeed bordering on minutia. However, they must be strictly followed, or a home improvement contractor on a residential construction project can be held liable for triple the owner’s “damages” (also known as “ascertainable losses”) and responsible for the homeowner’s attorneys fees.
Violations of New Jersey’s Consumer Fraud Act occur whenever a home improvement contractor makes any affirmative material misrepresentation whether intentional or not, and whenever a contractor knowingly withholds material information.
In addition, the Department of Community Affairs has issued regulations which make certain acts in connection with contracts for home improvements.
The best defense to a technical violation of the regulations is to ensure that the contract itself has no violations, and the best way to do this, of course, is to have a contract written without any violations. We have spent years writing home improvement contracts for contractors which help them get paid and comply with New Jersey’s consumer fraud regulations, and helping them revise existing contracts so that they comply.
Contact UsOur construction attorneys aggressively utilize every defense and use the discovery process to the fullest to defend our clients against claims of fraud and consumer fraud. For help, please e-mail us or call (973) 890-0004.