On November 14, 2014, the Indiana Court of Appeals issued a well-reasoned opinion in Timothy W. Paul v. Stone Artisans, Ltd., 29A04-1406-PL-258, that reduces the potential harshness of Indiana’s Home Improvement Contract Act (“HICA”). The HICA was enacted in response to what the courts have referred to as “well-known abuses found in the home improvement industry.” It requires a home improvement contract to contain nine specific elements. The contract at issue contained all but two of these elements: the approximate starting and completion dates of the home improvements and the printed name of the consumer below their signature. Under a strict reading of the HICA, these omissions are considered “deceptive acts” making the contract voidable and opening the contractor to damages.
In this case, even though the homeowner received the benefit of the home improvements and did not complain of the workmanship, he nevertheless attempted to void the contract based upon the omissions and violation of the HICA. The Court reasoned that “the public policy underlying HICA is to protect consumers when making home improvement contracts . . . and not enforcing the contract would do little to further the policy” behind the HICA. The Court held that trial courts must apply a “balancing approach and examine certain factors to determine if the contract violates public policy,” including (1) the subject matter of the contract, (2) the strength of the public policy, (3) the likelihood that the action requested will further that policy, (4) the seriousness of the forfeiture to be suffered by the party seeking enforcement of the bargain, and (5) the parties’ relative bargaining power and freedom to contract. The Court agreed with the trial court that despite “any deficiencies in the contract, [the homeowner] received the benefit of [contractor’s] services and was fully aware of all the terms of” the relationship with the contractor; therefore, upholding the validity of the contract did not violate the public policy behind the HICA.
The full text of the opinion can be found here.
Jason Lopp, New Albany