New house construction, remodels, kitchen updates, new flooring, roof repair? If you've dealt a lot with contractors you've probably run into problems with the work they did, or were supposed to do and didn't. Here's how to minimize problems:
1. Put everything important in writing - start and end dates, changes, amounts due and when, estimates, who pays for the materials, any guarantees. Email is a good way to memorialize such things so craft them accordingly.
2. Include an attorneys' fee and legal cost provision - for example, if you have to take the contractor to court, you want him/her to pay your legal fees and case costs if you win.
3. Try to deal only with a reputable and established business - is it bonded and insured and if not, how long has it been around, does it have local offices? Get references and check them beforehand.
4. If you get in a dispute, have another (reputable and experienced) contractor take a look and give you a written opinion on what went wrong, who caused it, and what it'll take to fix or repair.
5. Save a big chunk of the fee payment until the very end, only when it is all done to your satisfaction according to the written agreement above. This is especially advisable if its a relative, or friend, someone without much experience, or not an established business (see #3 above).
6. Before filing a lawsuit (best to have a good lawyer do that), try in writing to lay out the problem to the contractor and give him/her a reasonable chance to fix, repair or refund. If not, take 'em to court; you (or they) can always try again to negotiate a resolution later.