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In California, a written contract is required for all home improvement projects over $500 to avoid misunderstandings. The contract should include a description of the work, materials used, project timeline, cost, payment schedule, permits, cancellation rights, mechanics liens, and delays. Any changes to the contract must also be in writing. It is essential to have promises in writing, include material details, and work specifics in the contract. Be sure the contract is legible, easy to understand, and outlines responsibilities clearly.