With respect to a home improvement project, the key to a homeowner's protection is a construction contract that provides for various contingencies. Although most contracts are a single document, the homeowner should be aware that different signed documents could together form a contract. Each piece of paper to be signed should be carefully examined by the homeowner to ensure it meets with the homeowner's understanding of the parties' agreement.

Following are tips for homeowners entering into home improvement construction contracts.

1. Put Everything in Writing and Keep Copies. The parties to a written contract are bound by its terms. Therefore, prudence calls for every understanding, agreement, qualification, specification, expectation, and aspect of the transaction to be included in the written document. The homeowner should keep a copy of every document related to the project. Not only will doing so allow the homeowner to quickly access information concerning the project but, should the need arise, the homeowner will also have a complete set of the relevant documents to provide to his attorney.

2. Identification of Parties. Along with the name of the contracting homeowner, the contract should clearly identify the contractor, his business address and license number.

3. Financing of the Project. If the homeowner intends to fund the home improvement project by way of a loan, the homeowner should consider including a clause to the effect that the validity of the contract hinges on the homeowner obtaining the loan at a given interest rate.

4. Payment Terms. The contract should unambiguously set out all the terms concerning payment for the labor and materials associated with the project. The total price should be stated along with the amount of any down payment or deposit and the time frame for payment. Additionally, the contract should call for a percentage of the price to be retained by the homeowner until the date of completion. The homeowner may also want to include a provision for his right to withhold payment or take a deduction of the project price should the contractor fail to complete the project according to applicable building codes, fail to complete the project in a timely manner, or in the event that a lien is filed against the homeowner by a supplier or subcontractor.

5. Change Orders. After the original contract has been executed, the homeowner may decide to make changes to the project. Should this occur, the homeowner and contractor should execute a written change order to memorialize the agreement concerning the change.

6. Warranties. The contractor's warranties for labor and materials should be included in the contract. The contract should state what part of the contractor's work is covered and for how long.

7. Project Time Frame. The contract should clearly provide the date on which work will begin and the date by which the project will be completed.

8. Legal Notices. Depending on the state in which the construction is taking place, certain notices should be included in the contract. For example, some states require a notice of the applicable lien laws, the rights and responsibilities of the homeowner, and information concerning the contractor's substantial commencement of the work.

9. Alternative Dispute Resolution. If the parties agree to forego the judicial resolution of any controversies in favor of arbitration or another form of alternative dispute resolution, the contract should so state.

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