Protection Gone Too Far? The Risk of One-Sided Terms

What *can’t* a residential construction contract include?

In the past few weeks we’ve talked a lot about language a contractor should put in their agreements. 

And these posts might lead you to think that you ought to just throw in every protection imaginable to avoid a bad result. 

Well, here’s the catch: Ohio’s Consumer Sales Practice Act (CSPA) prohibits “one-sided” contract provisions that go too far in the contractor’s favor.  

(I know, right? Cue eye-roll.)

Under Ohio Revised Code section 1345.03, a court can find that a contractor committed an unconscionable act if the contractor “required the consumer to enter into a consumer transaction on terms the supplier knew were substantially one-sided in favor of the supplier.”  

Examples of one-sided contract provisions can include…

  • Requiring a homeowner to pay your legal fees, but not providing a reciprocal right for the homeowner, which can already be required by the statute;
  • A liquidated damages provision requiring the homeowner to pay $5,000 any time they make a late payment.  
  • Any other right that is abjectly unfair against the homeowner, and/or is not mutual (i.e. the homeowner doesn’t receive the same or similar rights)

If your contract contains a one-sided provision, it’s a big potential whammy. Because a one-sided provision is itself a violation of the CSPA. 

That means the one-sided provision can lead to…

  • An award of “treble” (triple) damages
  • $5,000 in “non-economic damages” 
  • And attorney’s fees, all in favor of the homeowner.  

So yes, you absolutely must make sure your home construction contract protects you and your business. But you can’t go too far – they’ve got to be fair.

Make sure your contracts aren’t “overdoing it.” Have a home construction lawyer review them to ensure you don’t go overboard and get yourself deeper in the hole. 

If you’re a home construction contractor and would like help with your residential construction contract, fill out our contact us form. Reference this article and you’ll get a complimentary consultation with one of our legal team members. 

You can also find more related information in our Guide to Avoiding Residential Construction Contract Nightmares.