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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 to be done, materials used, project timeline, cost, payment schedule, permit responsibilities, cancellation rights, mechanics liens, and allowable delays. Any changes to the contract must also be in writing. It's important to get promises in writing, detail materials to be used, and work specifics. Make sure the contract is legible and easy to understand.