Construction contracts: what Massachusetts law requires (and protects)

In Brazil, many jobs run on verbal agreements and relationships. In the United States, and especially in Massachusetts, the contract is not a formality: it is the law, it is protection and, when it is missing, it becomes a consumer case against you. Above US$1,000, residential remodeling requires a written contract. And the law says exactly what that contract must contain.

Above US$1,000, a written contract is not optional

The Home Improvement Contractor Law (MGL c.142A) applies to remodeling and improvement of an existing one- to four-family residence that is occupied by the owner. Any work above US$1,000 requires a written contract. It is not red tape: it is the yardstick the state uses to judge whether you acted correctly.

What the contract must contain

The law lists mandatory items. If one is missing, the contract is noncompliant from day one:

• Name, address and HIC registration number of the contractor.
• Start date and substantial completion date of the work.
• Detailed description of the work and materials.
• Total price and the payment schedule with dollar amounts.
• Notice that all contractors and subcontractors must be registered.
• Notice of the 3-day right to cancel.
• Disclosure of all warranties and of the owner's rights.
• Notice, in bold above the signature line, not to sign with blank spaces.

HIC registration and the Guaranty Fund

Every home improvement contractor and subcontractor must register with the OCABR (registration is done through the MA Contractor Hub). This registration funds the Guaranty Fund, a state fund that reimburses the consumer up to US$25,000 for an unpaid judgment against the contractor. It is financed by a fee you pay when you register, based on the number of employees. Working without registration is not only illegal: it removes protections and makes any dispute worse.

What happens if you do not comply

This is the part that catches the unprepared contractor. Violating any point of 142A is automatically treated as an unfair practice under the Massachusetts consumer protection law (the well-known 93A). That exposes you to double or triple damages plus the client's attorney's fees. Advertising services without your registration number, abandoning the job without justification, deviating from the agreement without written consent: each of these acts opens the door to a lawsuit that costs far more than the job.

The clauses that protect you

Beyond what is mandatory, a good contract includes what prevents disputes:

• Detailed scope and, above all, what is not included.
• Written change orders, signed before carrying out any change to price or schedule.
• Payment schedule tied to milestones, with a clear rule for retainage and release.
• Warranty with its term, scope and what voids it.
• A method of dispute resolution, including arbitration through the HIC program.

The written change order, on its own, prevents most conflicts: it documents every "just one more thing" the client asks for in the middle of the job. Without it, you either work for free or end up as the defendant.

In the United States, the contract is the language of trust. A complete contract does not drive away good clients: it drives away problems. And it signals, before the job starts, that you operate as a serious company.

What changes for the Brazilian contractor

People who come from Brazil often treat the contract as a formality that gets in the way of trust. In the United States, it is the opposite: the contract is what builds trust. Clients, banks and insurers see a complete contract as a sign of a serious company. Its absence, or an improvised document, signals amateurism, and in the American market amateurism costs contracts. A well-written contract does not drive away good clients, it drives away problems.

There is also an important cultural point: here, what is not in writing did not happen. Verbal agreements, scope adjustments in the middle of the job and promises of "we will sort it out later" have no value in a dispute. Everything that matters must be on paper, signed. This change of habit is one of those that most protects the Brazilian contractor who is structuring a business in the US.

The contract starts before the signature

A good contract is the end of a process, not the beginning. It reflects a detailed estimate, a discussed scope and a realistic schedule. If the estimate was a guess, the contract only documents the guess. That is why contracts and pricing go together: the document formalizes a price that must already include direct cost, overhead and profit.

During the job, the contract stays alive through change orders. Every change in scope, schedule or price requested by the client becomes a written addendum, signed before the work is done. This habit prevents the most common conflict: the client who asks for "just one more little thing" and then refuses to pay for it. Without a written change order, you either work for free or end up as the defendant. With it, every extra is agreed, documented and paid.

Miriam Matos

Founder of FourRise Consulting. Business owner with direct experience in the construction industry in the United States and creator of the F.O.U.R. Method.