Often, attorneys are asked to assist their clients and friends in pursuing business claims for nonpayment. Much of the time, the claims are straightforward. In most instances, the attorney need only be armed with a cursory understanding of the Fair Debt Collections Practices Act to avoid stepping into troubled water. However, when the client is a construction contractor seeking payment for construction work, the situation can be quite different. This is certainly the case when the work involves residential home improvements and most other types of "noncommercial" construction work. In these cases, you should be aware of the intricacies of the law you are about to navigate your client through, courtesy of the New Jersey Consumer Fraud Act.
The state Supreme Court boasts that New Jersey has some of the strictest consumer protection laws in the country. See Cox v. Sears Roebuck, 138 N.J. 2 (1988). While the consumer protection laws are certainly welcomed and warranted, the application of the rigid legal framework involving the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 et seq., along with regulations promulgated thereunder including, the Home Improvement Practices Act, N.J.A.C. 13:45A-16.1 et. seq., Contractors Registration Act, N.J.A.C. 13:45A-17.1 et. seq., and the Plain Language Act, N.J.S.A. 56:8-1 et. seq. imposes a legal minefield for contractors. Virtually any misstep by the contractor may result in a prima facie violation of the CFA. When an attorney is tasked with pursuing a collections action in this arena, he or she must proceed with caution to avoid prompting a situation whereby the homeowner elects to invoke the CFA protections afforded to them, at the cost and expense of the contractor-client.
