Attorney's Column
Appellate Court Declines Partial Enforcement Of Home Improvement Construction Contract
By THOMAS H. WELBY, P.E., ESQ., and GREGORY J. SPAUN, ESQ.
A contract is an agreement between two parties that the law permits to be enforced in court. Even if the agreement is private and does not involve the state, the public policy behind this right to enforce a private agreement is that, without being able to resort to the courts for enforcement, parties would be reluctant to enter into the contracts that power our economy—or, even worse, would resort to private enforcement methods. However, there are certain contracts that, before they will be deemed enforceable, have to meet other requirements for various reasons.
One such private contract is the home improvement construction contract, which has to meet certain specific statutory requirements as to form before a court will enforce it. An appellate court, in the recent case of Amber Well Drilling, LLC v. Reed, affirmed that where such a contract is unenforceable, it is unenforceable in its entirety.
Background
In September 2020, the Reeds retained Amber Well Drilling to drill a well at their home in Poland, NY. The form of contract, prepared by the contractor, was a single-sheet form that provided for certain unit prices for Amber Well’s work. This contract provided for interest at the rate of 2% per month for late payments and for attorney’s fees to be recovered by Amber Well if it had to undertake collection activities with the assistance of counsel.
Amber Well performed the required work, but the Reeds did not pay their balance. Accordingly, Amber Well filed a mechanic’s lien seeking payment of $40,613.48. Ultimately, Amber Well sued to foreclose the lien and also asserted breach of contract and quantum meruit claims to recover this balance. After discovery, the matter went to trial before a jury. At trial, the court ruled that the contract was not enforceable because it did not comply with Section 771 of the General Business Law, which requires that home improvement contracts contain certain enumerated provisions, including “the approximate dates, or estimated dates, when the work will begin and be substantially completed, including a statement of any contingencies that would materially change the approximate or estimated completion date.” The court, however, allowed Amber Well to recover under the quasi-contractual theory of quantum meruit. The jury awarded Amber Well the reasonable value of its work in the amount of $37,719.
After the verdict, Amber Well moved for an award of its attorney’s fees and increased interest (the difference between the statutory rate of 9% and the contractual rate of 24%) pursuant to the contract. The Reeds opposed the motion, arguing that, since the court had found the contract unenforceable, neither attorney’s fees nor enhanced interest could be awarded.
Decision
The trial court agreed that, because the contract was unenforceable, its attorney’s fees and interest provisions could not be salvaged. Accordingly, following well-settled law that “in the absence of any pertinent contractual or statutory provision with respect to the recovery of amounts expended in the successful prosecution or defense of an action, each party is responsible for its own legal fees,” the court declined to award any attorney’s fees to Amber Well and awarded prejudgment interest at the (lower) statutory rate.
Amber Well appealed, but the appellate court affirmed. After reviewing how Amber Well’s contract failed to comply with the statute, the appellate court held that “we agree with [the Reeds] that to allow [Amber Well] to draft a noncompliant contract and yet still recover attorneys’ fees and interest at [Amber Well’s] chosen rate as provided in the contract would only ‘incentivize contractors to disregard the statute, thereby thwarting the intent of the statute,’ which is ‘designed to protect the homeowner.’”
Comment
There are two lessons to be gleaned from the appellate court’s holding. The first is for contractors performing home improvement work: their contracts have to comply with the consumer protection provisions set forth in Section 771 of the General Business Law. The second lesson is broader: when a contract is ruled to be unenforceable for one reason or another, the entire thing is unenforceable, and the parties cannot cherry-pick provisions that they would still like to enforce.
Accordingly, contractors would be well advised to involve their attorneys in drafting and negotiating their contracts to make sure that the contracts are enforceable and that they do not have to rely on a quasi-contractual theory as a backup. Failing that, attorney’s fees and enhanced interest provisions can go by the boards. Also falling with the unenforceable contract could be its warranty provisions, indemnification provisions, insurance provisions, and other important provisions that were otherwise designed to survive the completion of the contract.
About the authors: Thomas H. Welby, P.E., Esq., is General Counsel to the CIC and the BCA and founder and Senior Counsel to Welby, Brady & Greenblatt, LLP. Gregory J. Spaun, Esq., is General Counsel to the Queens and Bronx Building Association and a partner with the firm.
Published: October 15, 2026.