1.__Action barred.__If a claimant accepts an offer under section 8554 and the contractor fulfills the offer:

A.__The claimant is barred from bringing an action for the claim described in the notice of claim under section 8554, subsection 1; and

B.__The contractor is deemed for insurance purposes to have been legally obligated to make the repairs or the monetary payment as if the claimant had recovered a judgment against the contractor in the combined amount of the cost of any repairs and the amount of any monetary payment. The repairs and monetary payment under this paragraph are enforceable as a judicial settlement but do not constitute a legal judgment against the contractor for the purposes of obtaining insurance coverage or submitting a competitive bid.

2.__Exception for code violations.__Notwithstanding the provisions of subsection 1, if a construction defect that gave rise to the notice of claim involves a violation of a legally enforceable building code, including, but not limited, to a state or local building, electrical, plumbing or other code, or the provisions of Title 10, chapter 951 and if after the homeowner accepts an offer made in compliance with this chapter by the contractor and the contractor fulfills that offer the violation is not corrected, the homeowner may bring an action for that portion of the claim described in the notice of claim that involves the violation.

§8557.__Contract of sale; provisions

1.__Notice required.__Upon entering into a contract for the design, development, construction, sale or construction and sale of a residence; for the repair of a new or existing residence; or for the construction, alteration, addition or repair of an appurtenance to a new or existing residence in which the contract amount exceeds the amount requiring a home construction contract pursuant to Title 10, chapter 219-A, the contractor must provide written notice to the homeowner of the contractor's right to resolve alleged construction defects before a homeowner may commence litigation against the contractor under this chapter. The notice required by this section must be conspicuous and may be included as part of the contract.

2.__Form of notice.__The notice required by subsection 1 must be in substantially the following form: