A contractor mismanaged funds paid by homeowners so that he needed more money to finish the project, failed to pay subcontractors, and then stopped work. This was even though the homeowners had made down payments. The contractor did not tell them that he put that money into a general fund he used to fund the operations of a house-flipping business he owned. The administrative agency and the appeals court found that failing to tell the customer that the funds being deposited would be used in a different business was a misrepresentation under the Home Improvement Contractor Act. The court found that the inability to complete the project under the terms of the contract amounted to abandonment, and homeowners do not have to throw good money after bad or show forbearance to a contractor who cannot meet the terms of his agreement.
WHY THIS IS IMPORTANT... This is the first time a court has ruled that not saying something is a misrepresentation under Home Improvement Contractor Act. It is an expansion of the law's reach.