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  • Beware Mistakes That Bind

    Here's the scenario: A contractor hires a new estimator and he makes a bid on a remodeling job. Unfortunately, the bid is way off the mark. By the time the contractor notices the mistake, the customer has signed the contract and given him a check, which he's deposited.

  • Making Change Orders Work for You

    Many of the costly owner/contractor disputes I see in my legal practice involve change orders — or the lack thereof. I know of innumerable residential contractors who, having failed to obtain signed change orders, have eaten hundreds or even thousands of dollars of legitimate extra work at the end...

  • Who Pays If Something's Wrong With The Plans and Specs?

    You're looking at an invitation to bid, complete with plans and specs. It would be a big job for you — very profitable.

  • Protect Your Lien Rights

    Consider this scenario: During the course of a project, the homeowner pays the contractor, but the contractor doesn't pay his subs or material suppliers. One of the subs or suppliers then files a construction lien on the property. The homeowner, of course, goes crazy. He has already paid, he says...

  • Managing Material Costs With an Escalation Clause

    The other night, my husband and I watched a television show about contractors in California who are walking away from unfinished houses. But few contractors will walk away from an unfinished job voluntarily. That's definitely not part of their business plan. So why would it happen?

  • How a Bidding Error Can Turn Into a Disaster

    It's your worst nightmare: You've submitted a bid, it's been accepted, and then you find out there was a mistake in your estimate or that your bid was based on a subcontractor's mistake.

  • Protect Your Assets

    Whenever I speak somewhere, I preach about the importance of separating your personal assets from your company's assets. The best way to do this is by incorporating your business as a corporation or an LLC.

  • Keep Your License Current

    The California Supreme Court recently made a decision that I personally disagree with. Does the court care what I think? I'm sure it doesn't. Do you care? Well, you should — even if you're in another state — because if you don't keep your license current, you could face the same problem as the...

  • Personal Guaranty of Business Debt

    Most credit applications contain a personal guaranty. In this one, it's clearly spelled out in item No. 4, but in some cases it's buried in a longer document and written in language that makes it hard for the applicant to understand just what he's agreeing to.

  • Alternative Materials and Code

    I can just hear your response to that topic: "Code enforcement officers are hassling me because I want to use a wood composite they haven't seen before, but they're approving houses made of straw. Who's running the building department, the three little pigs?"