The Michigan Consumer Protection Act now applies to licensed contractors. On July 31, 2026 the Michigan Supreme Court decided Attorney General v Eli Lilly and Company, 4 to 3, and overruled the two cases that had let a residential builder, a plumber or any other licensed business argue that its license put it outside the Act. For Michigan contractors, that means a homeowner who says your estimate, your salesperson or your invoice misled them can now bring a claim under the Act, with attorney fees. The fix is not a lawyer on every job. It is making sure what you say, what you write and what you charge match.
This post explains a court decision and what it means operationally. It is operational documentation, not a legal determination; talk to your own attorney about your contracts.
In short
- The court overruled 2 precedents, Smith (1999) and Liss (2007), by a 4 to 3 vote (Michigan Supreme Court, 2026).
- A consumer can recover actual damages or $250, whichever is greater, plus reasonable attorney fees (MCL 445.911).
- A claim can be brought up to 6 years after the practice, or 1 year after the last payment, whichever ends later (MCL 445.911).
- Contractors were the 9th largest category in the Attorney General's more than 12,000 written consumer complaints in 2025 (Michigan Department of Attorney General, 2026).
Does the Michigan Consumer Protection Act apply to contractors?
The Act has always had an exemption for a "transaction or conduct specifically authorized under laws administered by a regulatory board or officer." For two decades, Michigan courts read that broadly. In Liss, the Supreme Court said, in the new opinion's summary, that "as long as a builder is licensed to act as a residential home builder, any claim related to the 'general transaction' of residential home building is exempt from the MCPA."
The new opinion lists how far that reached: "In addition to home builders, as in Liss, this includes car dealers, car makers, mortgage lenders and servicers, real estate agents, plumbers, doctors, grocery stores, casinos, and pesticide application services." Its verdict on that approach: "the mere existence of the licensure or regulation is sufficient to immunize the defendant. Neither the text nor the purpose of the MCPA supports such a result."
The new test is narrower. Justice Hood wrote: "We hold that, when determining whether the MCL 445.904(1)(a) exemption applies, the proper inquiry is whether the specific transaction or conduct at issue, rather than the general transaction, is authorized by law." Your builder's or mechanical license authorizes you to do the work. It does not authorize a misleading estimate.
The court addressed businesses that had relied on the old rule directly: "If Michigan businesses are relying on Smith and Liss to engage in unfair, unconscionable, or deceptive business practices otherwise prohibited by the MCPA without the fear of repercussion, this is not a valid reliance interest."
Why a $250 claim matters to a small trade
The minimum is small. The attorney fees are not. Under MCL 445.911, a person who suffers loss "may bring an action to recover actual damages or $250.00, whichever is greater, together with reasonable attorney fees." Class actions are allowed too. A dispute over a few hundred dollars on a furnace repair, once fees can shift, is a different conversation than it was in June.
The Attorney General already hears about contractors. Its March 2026 report on 2025 complaints ranked contractors ninth, a category that "covers residential building construction services, snow removal and landscaping services, plumbing, heating and air conditioning services, and special trade contractors such as those providing emergency tree services."
The practices most likely to reach a trade
MCL 445.903 lists the unfair and deceptive practices. A few read as if they were written for estimates and invoices:
| Practice in MCL 445.903(1) | Where it shows up in a trade |
|---|---|
| (y) "Gross discrepancies between the oral representations of the seller and the written agreement," or failure "to provide the promised benefits" | The tech said "all parts included"; the invoice bills parts |
| (s) "Failing to reveal a material fact, the omission of which tends to mislead or deceive the consumer" | A known permit fee or disposal charge left off the quote |
| (bb) A material "representation of fact" that makes a person believe the state of affairs "to be other than it actually is" | "This unit will cut your bill in half" with nothing behind it |
| (u) Failing to "promptly restore" a deposit when a transaction is cancelled under its terms | A cancelled job where the deposit sits for months |
Law firms advising contractors after the ruling, Clark Hill among them, say the same thing in different words: review contracts, advertising, estimates, invoices and customer communications so that what they say is accurate and can be backed up.
What a Michigan contractor should change now
- Put every price in writing before work starts. Quote, scope and exclusions, sent to the customer, not left in the truck. Discrepancy between oral and written terms is item (y).
- Write down what the tech promised. A summary of each sales call or diagnostic visit, saved to the job, is the record that shows the written agreement matched the conversation.
- List the fees you know about. Permits, disposal, trip charges, after-hours rates. An omission that misleads is item (s).
- Strip unsupported claims from ads and scripts. Savings figures, "lifetime" anything, "best in Oakland County." If you cannot back it up, cut it.
- Handle cancellations and deposits by the book. Whatever your contract says about refunds, do it promptly and in writing.
- Keep records for at least six years. The limit runs 6 years from the practice or 1 year from the last payment, whichever ends later. A two-year-old job is still open.
The mistake most contractors make at step 2
They rely on memory. The salesperson remembers saying "plus tax and permit," the customer remembers "all in." With no written summary, both are telling the truth as they recall it, and the business has nothing to show. The record has to be made at the time, on every call, not only the ones that seem likely to go wrong.
Where we fit
We do not give legal advice and we do not review contracts. What we build is the record: call summaries saved to the customer file after every call, and quotes sent and followed up in writing before a truck rolls. For the rest of what we build for trades, see our services. For another consumer rule that reached small businesses this year, read our post on the FTC consumer review rule.
Your license lets you do the work. It no longer covers what you say about it.
