Avoiding Legal Headaches: 5 Contract Mistakes California Contractors Make (and How to Fix Them)
Construction disputes are among the most common, and expensive, legal issues contractors face in California. Often, these issues stem from contracts that fail to clearly allocate risk, define obligations, or comply with state law. At Apricity Law, we regularly advise contractors and construction professionals across the Truckee and Tahoe regions on how to proactively avoid legal pitfalls.
Here are five frequent mistakes we see — and what to do instead:
Unclear Scope of Work and Change Orders
Too often, construction contracts contain vague scope descriptions or rely on verbal agreements for changes. Without a detailed scope and a written change order process, disputes over extra work or payment are inevitable. Every contract should include a clearly defined scope of work and specify that no changes are binding unless in writing and signed by both parties.
One-Sided Indemnity Clauses
Many contractors unknowingly sign contracts that hold them liable for damages caused by others. California law limits indemnity in residential construction, but commercial contracts often push beyond that. Contractors should push back on broad, one-way indemnity clauses and ensure mutual risk allocation.
Lack of Payment Protection Language
Contracts should clearly preserve your right to use mechanic's liens, stop notices, and prompt payment statutes. Omitting this language — or waiving those rights — weakens your ability to collect if the owner delays payment.
No Dispute Resolution Clause
Failing to designate how disputes will be resolved (mediation, arbitration, or court) leads to confusion and higher legal costs. Contractors should specify a preferred venue and process — ideally, private mediation followed by arbitration or litigation if necessary.
Missing Statutory Disclosures
For residential projects, the Contractors State License Board (CSLB) requires specific consumer notices. Failure to include these disclosures can void the contract and prevent recovery.
At Apricity Law we offer flat-fee contract reviews and drafting services for contractors, subcontractors, and design professionals. A well-drafted agreement is your first line of defense. Contact us today to bulletproof your construction contracts.
The information provided in this blog is for general informational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship between you and Apricity Law, PC. Legal issues are complex and fact-specific; you should not act or rely on any information contained herein without first consulting a qualified attorney regarding your specific situation. While we strive to keep this content current, laws and regulations may change, and we do not guarantee the accuracy, completeness, or timeliness of the information provided. If you require legal assistance, please contact Apricity Law, PC to discuss your matter.