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A written contract is required for home improvement projects over $500 in California to avoid misunderstandings. The contract should include a description of work, materials, project timeline, cost, payment schedule, permit responsibility, cancellation rights, mechanics liens, and allowable delays. It must be in writing, legible, and easy to understand. Any changes should also be documented. Remember to include all details about materials and work specifics in the contract. Verbal promises should be written into the contract for clarity.