How a Business Hired a Lawyer to Review a General Contractor Contract in California

Under Texas law, general contractors can include provisions that require disputes about construction issues or defects to be resolved through mediation and arbitration rather than going to court. It is enforceable and it is not a violation of consumer protection law. To be valid, the arbitration requirement must be clearly visible in the contract - specifically in bold, 10-point type or larger. This ensures you can make an informed decision about agreeing to arbitration. For disputes over alleged construction defects where damages exceed $7,500, Texas law provides for mandatory mediation if requested by either party. Mediation involves working with a neutral third party to reach a mutually agreeable solution. If mediation doesn't resolve the issue, the dispute would then go to binding arbitration - where an arbitrator hears both sides and makes a final decision. Texas courts recognize and enforce these types of arbitration agreements. While arbitration and mediation can often provide faster and less expensive resolution than litigation, you should carefully review these provisions before signing.

Other than the terms that Massachusetts requires to appear in a home improvement contract between a homeowner and a registered home improvement contractor, the parties can agree to pretty much any other terms (provided they are not illegal, or void on public policy grounds). The GC is probably including this "termination without cause" right in his standard agreement in case a more lucrative job comes along and he'd lose out on it if he continued on your project. I would strongly recommend that you insist the contract be amended to remove that clause. Here is a link to the Mass. Office of Consumer Affairs and Business Regulations' guidance on this topic: https://www.mass.gov/info-details/required-contract-terms-in-a-home-improvement-contract. And assuming he is a registered home improvement contractor, while amending the contract to strike the termination language, you should also add any of the Massachusetts-required terms that are missing, or update them as appropriate. Hopefully, you have a good relationship with your contractor and he will agree, at least to the removal of the termination language. If the contractor has integrity, he should agree to remove the language and add/update any missing required terms.