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Contracts & Execution

339 questions
101. A contractor's bid is $120,000. After the contract is signed, the owner requests an approved change order adding $15,000 of work and a deductive change order removing $4,000. The adjusted contract price is:
a.$120,000
b.$135,000
c.$116,000
d.$131,000✓

Change orders adjust the contract price up and down: $120,000 + $15,000 - $4,000 = $131,000. The adjusted price reflects all signed change orders.

102. Which contract type generally gives the owner the LEAST cost certainty at the time of signing?
a.Fixed-price (lump sum) contract
b.Guaranteed maximum price contract
c.Cost-plus-fixed-fee contract
d.Cost-plus-percentage contract✓

Under cost-plus-percentage the fee itself grows with the cost, so the owner learns the final price only when the work is finished - the least certainty of the four, and the reason many owners refuse the form. Cost-plus-fixed-fee is the near miss: the costs are still open but the fee is capped, so escalation at least stops adding to the contractor's margin. A guaranteed maximum price puts a ceiling over the same open costs, and a fixed price fixes the whole number at signing.

103. A home improvement contract must be legible and any blank spaces should be:
a.Left blank for the contractor to complete after signing
b.Filled in only by the building department
c.Completed before the owner signs the contract✓
d.Filled in after the project is finished

The contract must be fully completed before the owner signs, so the homeowner sees and agrees to all material terms. Leaving blanks to be filled in later is improper and unfair to the consumer.

Bus. & Prof. Code §7159
104. An owner-contractor agreement and a subcontract are kept consistent through:
a.An indemnity clause moving the prime's liability to the sub
b.A flow-down clause passing prime-contract duties to the sub✓
c.A pay-when-paid clause tying payment to the owner's payment
d.A no-damages-for-delay clause barring the sub's delay claims

A flow-down (or conduit) clause incorporates the prime contract's relevant terms into the subcontract, so the sub owes the general the same obligations the general owes the owner for that scope. An indemnity clause allocates liability for claims; it does not import the prime contract's terms. A pay-when-paid clause governs only the timing of payment. And a no-damages-for-delay clause limits one remedy. None of those three keeps the two contracts consistent.

Flow-down/conduit clause (industry practice); Civil Code §2782 (indemnity limits)
105. A contractor's job-cost report shows materials are 15% over budget while labor is on budget at the 50% completion point. The contractor should:
a.Wait for closeout to investigate the material variance
b.Stop buying material until the owner approves a change order
c.Investigate the variance now and correct the purchasing plan✓
d.Bill the owner for the overage without a change order

Job costing exists to surface a problem while there is still time to act: a 15 percent material overrun at the halfway point should be investigated at once, and purchasing or scope corrected before the second half doubles the loss. Waiting for closeout throws away the only chance to correct it. Halting the work over an internal cost variance risks abandonment under B&P §7107, because the owner has changed nothing. And an overrun the owner did not cause is not extra work, so it cannot be billed - with or without a change order.

Job-cost variance analysis (industry practice); B&P §7107 (abandonment)
106. A subcontractor signs a CONDITIONAL waiver and release on progress payment under Civil Code §8132 in exchange for a check that later bounces. What is the legal effect on the waiver?
a.The waiver is fully enforceable because it was signed in writing
b.The waiver does not become effective until the check is actually honored by the bank✓
c.The waiver is automatically converted to an unconditional waiver after 30 days
d.The waiver is enforceable but the subcontractor may sue separately for the bounced check

A conditional waiver under Civil Code §8132 only becomes effective when there is evidence of actual payment, meaning the check clears the bank. If payment fails, the waiver has no legal force and the subcontractor retains full lien rights.

Civ. Code §8132
107. A prime contractor's subcontract requires the subcontractor to indemnify the prime for ALL claims, including those arising from the prime's SOLE negligence. Under Civil Code §2782, this broad-form indemnity provision is:
a.Enforceable if signed by a licensed subcontractor
b.Enforceable only on public works projects
c.Void and unenforceable as against public policy✓
d.Enforceable only when the subcontract is over $50,000

Civil Code §2782 voids any construction contract clause that purports to indemnify a party for liability caused by its sole negligence or willful misconduct. This anti-broad-form-indemnity rule cannot be waived.

Civ. Code §2782
108. A homeowner verbally asks the contractor to upgrade tile during a bathroom remodel. The contractor proceeds without a written change order. Under B&P §7159, the contractor's ability to collect the extra $3,200 is:
a.At risk: an unsigned change order is unenforceable✓
b.Secure, because the daily log proves what was agreed
c.Secure, because verbal changes are valid up to $5,000
d.At risk only if the homeowner files a CSLB complaint

B&P §7159(c)(5) makes a change-order form part of the contract only if it is in writing and signed by the parties before the work covered by it starts, and the opening words of §7159(d) say the same of the contract and any changes to it — so an unsigned verbal upgrade leaves the extra at risk. A daily log is the contractor's own record, not the owner's signature. No dollar figure turns a verbal change order into an enforceable one; there is no $5,000 line in §7159. And the risk is not the complaint: the money is at risk in a collection action whether or not the homeowner ever contacts the CSLB.

B&P Code §7159(c)(5); §7159(d)
109. An owner records a valid Notice of Completion 12 days after actual completion of the work under Civil Code §8182. What is the effect on the time direct contractors have to record a mechanics lien?
a.90 days, counted from the recording of the Notice
b.No lien at all, since the Notice cuts off lien rights
c.30 days, the window that applies to subcontractors
d.60 days, counted from the recording of the Notice✓

Civil Code §8182 lets an owner record a notice of completion on or within 15 days after completion, so a notice recorded on day 12 is valid - as the stem says it is. What it does is set by §8412: a direct contractor must record its lien before the EARLIER of 90 days after completion or 60 days after the owner records the notice, so once the notice is on record the 60-day clock governs, because it runs out first. The 90-day period is real but measured from completion, not from the recording. The 30-day window is real too, but §8414 gives it to claimants other than the direct contractor - subcontractors and suppliers. And a notice of completion shortens a deadline; it never extinguishes the lien right.

Civil Code §8182; §8412; §8414
110. On a private works project, when a valid Notice of Completion IS timely recorded, a direct (prime) contractor must record its mechanics lien within how many days under Civil Code §8412?
a.30 days
b.60 days✓
c.90 days
d.120 days

Under Civil Code §8412, a direct contractor has 60 days after recording of a Notice of Completion or Notice of Cessation to record a mechanics lien. Without such a notice, the period is 90 days after actual completion.

Civ. Code §8412

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111. A drywall subcontractor on a private works project finished its scope on March 1, the same day the work of improvement was actually completed. No Notice of Completion has been recorded. Under Civil Code §8414, the LATEST date the subcontractor may record a mechanics lien is approximately:
a.March 31 (30 days after its own last day)
b.April 30 (60 days after its own last day)
c.May 30 (90 days after actual completion)✓
d.August 29 (180 days after its own last day)

Civil Code §8414 gives a claimant other than the direct contractor until the earlier of 90 days after completion of the work of improvement or 30 days after the owner records a notice of completion or cessation. No notice was recorded here, so the 90-day limb controls and the lien must be recorded by about May 30. The 30-day figure is the shortened deadline that only a recorded notice triggers, and it runs from that recordation rather than from the subcontractor's last day. Sixty days is the direct contractor's post-notice window under §8412, not a subcontractor's. No deadline in the California lien statute runs 180 days.

Civil Code §8414; cf. §8412
112. Work on a private project ceases for 35 continuous days due to a financing dispute. The owner records a Notice of Cessation under Civil Code §8174. What is the effect on subcontractor lien deadlines?
a.Subcontractors must record liens within 30 days after the Notice of Cessation is recorded✓
b.Subcontractors must record liens within 90 days after the Notice of Cessation is recorded
c.The Notice of Cessation is invalid because work must cease for at least 60 days
d.The Notice of Cessation has no effect on subcontractor lien rights

A Notice of Cessation under Civil Code §8174 can be recorded after work has ceased for at least 30 continuous days. When validly recorded, it shortens the subcontractor and supplier lien deadline to 30 days from recording, the same effect as a Notice of Completion.

Civ. Code §8174
113. A consumer home-improvement contract includes a clause forcing the homeowner to pay all of the contractor's attorney fees in any dispute, while barring the homeowner from recovering her own. Under Civil Code §1670.5, a court reviewing this provision may:
a.Enforce the clause because both parties signed the contract
b.Refuse to enforce the clause, or limit how it is applied✓
c.Rewrite the clause so the fee award runs both ways
d.Send the fee dispute to CSLB arbitration before ruling

Civil Code §1670.5(a) lets a court that finds a clause unconscionable as a matter of law refuse to enforce the contract, enforce the rest of it without the clause, or so limit the clause's application as to avoid an unconscionable result. That both parties signed is not an answer: unconscionability is a doctrine about signed contracts. The statute lets the court decline or narrow the clause, not redraft it into a mutual fee provision the parties never agreed to. And §1670.5 is a question of law for the court, not something routed to a CSLB arbitration first.

Civil Code §1670.5(a)
114. A general contractor receives a joint check made payable to BOTH the subcontractor and its material supplier. Best practice in California is for the GC to:
a.Endorse the check into the GC's account and then pay out
b.Hand the check to the supplier and skip the subcontractor
c.Get a joint check agreement and waivers before release✓
d.Cash the check and split it at the GC's own discretion

The protection comes from agreeing the joint check terms before the check moves and exchanging conditional waivers and releases on the Civil Code §8132 form at release: the agreement says how the funds are allocated, and the waivers record that the money reached both payees, which is what keeps the supplier's lien off the job. Running the check through the GC's own account first turns both payees' money into the GC's and invites the very claim the joint check was meant to prevent. Paying the supplier and skipping the subcontractor leaves the sub's labor unpaid and its lien rights alive. And splitting a two-payee check at the GC's discretion is not a discretion the GC has — both payees must endorse.

Civil Code §8132
115. A prime contractor receives a $200,000 progress payment from the owner. The subcontract calls for $40,000 to a plumbing sub for completed work that was approved in the payment. Under B&P §7108.5, the prime must pay the sub within how many days of receipt?
a.Within 10 days of receiving each progress payment from the owner
b.Within 30 days of receiving each progress payment from the owner
c.Within 45 days of receiving each progress payment from the owner
d.Within 7 days of receiving each progress payment from the owner✓

B&P §7108.5(a) gives the direct contractor 7 days after receipt of each progress payment to pay each subcontractor its share, unless the parties agree otherwise in writing; wrongful withholding costs 2 percent of the amount due per month plus the prevailing party's attorney's fees (§7108.5(b)-(c)), and in a good faith dispute no more than 150 percent of the disputed amount may be held back. Each wrong number is a real California deadline for a DIFFERENT payment. (a) 10 days is Civil Code §8814, the direct contractor's deadline to pass RETENTION through to subs. (b) 30 days is Civil Code §8800, the owner's deadline to pay the direct contractor a progress payment after a demand. (c) 45 days is Civil Code §8812, the owner's deadline to release retention after completion of the work of improvement.

Bus. & Prof. Code §7108.5; cf. Civil Code §8800, §8812, §8814
116. A subcontractor on a private project completes its work and the prime contractor withholds 5% retention. The owner has accepted the project and released all retention to the prime. Under Civil Code §8814, the prime must release the sub's retention within how many days?
a.Within 10 days of receipt from the owner✓
b.Within 30 days of receipt from the owner
c.Within 60 days of subcontractor completion
d.Only after final acceptance by all subcontractors

Civil Code §8814 requires a prime contractor to release retention withheld from a subcontractor within 10 days after receiving the retention from the owner (a). Wrongful withholding triggers a 2% per month penalty under Civil Code §8818, plus costs and attorney fees to the prevailing party. (b) 30 days and (c) 60 days are contract terms, not the statute's; 60 days is the Public Contract Code §7107 window for a public agency, a different project type. (d) invents a condition — no subcontractor's acceptance gates another's retention. The retention percentage itself is capped at 5% by Civil Code §8811 for contracts entered into on or after January 1, 2026.

Civil Code §8814
117. A home-improvement contract has a total contract price of $48,000. Under B&P §7159(d), the MAXIMUM down payment the contractor may demand or accept before any work or material delivery is:
a.$2,500
b.$1,000✓
c.$4,800 (10% of contract)
d.$5,000 or 10%, whichever is greater

B&P §7159(d) caps the down payment on a home improvement contract at the LESSER of $1,000 or 10% of the contract price, exclusive of finance charges. Here 10% would be $4,800 so the lesser amount of $1,000 controls.

Bus. & Prof. Code §7159(d)
118. A consumer signs a home-solicitation contract for solar panel installation at her residence on a Tuesday at 6 PM. Under Civil Code §1689.5 et seq., she may cancel without penalty until midnight on:
a.Wednesday (the next calendar day)
b.Thursday (48 hours after signing)
c.Friday (the third business day)✓
d.Tuesday next week (7 calendar days)

The Home Solicitation Sales Act, Civil Code §1689.5 et seq., lets the buyer cancel until midnight of the third business day after the day the contract was signed (§1689.6). Signed Tuesday: Wednesday is one, Thursday is two, Friday is three. The next day and a flat 48 hours are both shorter than the statute allows, and seven calendar days is the federal-style cooling-off period some buyers expect, not California's home-solicitation rule.

Civil Code §1689.5; §1689.6
119. A contractor wishes to collect progress payments on a home-improvement contract. Under B&P §7159.5, each progress payment must:
a.Equal exactly 10 percent of the contract price each time
b.Be payable when materials are ordered, before delivery
c.Cover the next phase's costs before that work starts
d.Not exceed the value of work done and materials on site✓

B&P §7159.5(a)(5) bars front-loading: apart from the downpayment, a contractor may neither request nor accept a payment exceeding the value of the work performed or the material delivered. The exact-10-percent answer borrows the §7159.5(a)(3) downpayment cap — $1,000 or 10 percent of the contract, whichever is less — and misapplies it to every progress payment. Billing when materials are merely ordered fails because §7159.5(a)(5) counts material delivered, not material promised, and billing the next phase before that work starts is the front-loading the section exists to stop.

B&P §7159.5(a)(5); cf. §7159.5(a)(3)-(4)
120. A commercial construction contract has a liquidated damages clause of $2,500 per day for late completion. Under Civil Code §1671(b), this clause is presumed:
a.Valid unless the challenger proves it was unreasonable at formation✓
b.Void as a penalty unless it equals the owner's actual daily loss
c.Valid only if the clause appears in 14-point boldface on page one
d.Void unless the CSLB approved the amount before signing

Civil Code §1671(b) makes a liquidated damages provision valid unless the party seeking to invalidate it establishes that it was unreasonable under the circumstances existing at the time the contract was made: the burden sits on the challenger and the measuring date is formation, not the day the delay happened. Requiring the sum to equal actual daily loss is the stricter treatment §1671(c)-(d) reserves for consumer contracts. Type-size requirements come from the home improvement statutes, not from §1671. And the CSLB does not approve or pre-clear contract terms.

Civil Code §1671(b), §1671(c)-(d)
121. A residential remodel contract for a four-unit building contains a mandatory arbitration clause. Under B&P §7191, the clause must:
a.Be set in at least 8-point boldface black type, with the owner's separate initials
b.Be titled 'ARBITRATION OF DISPUTES' and set in at least 10-point roman boldface✓
c.Be submitted to the CSLB registrar for prior approval before the contractor uses it
d.Be initialed by the contractor alone, because only the licensee is ever bound by it

B&P §7191(a) requires an arbitration provision in a contract for work on residential property of four or fewer units to be clearly titled 'ARBITRATION OF DISPUTES' and, in a printed contract, set in at least 10-point roman boldface — or in contrasting RED print in at least 8-point roman boldface. In a typed contract it must be in capital letters. (a) is the trap: 8-point boldface is permitted only when the print is a contrasting red, never in ordinary black. (c) invents an approval step; the Registrar does not review private contract forms. (d) inverts §7191(c): a non-compliant clause is unenforceable against everyone EXCEPT the licensee, so it is the owner who escapes it, not the contractor, and both parties still initial a compliant one.

Bus. & Prof. Code §7191(a), (c)
122. A homeowner contracts with a Class B contractor to build a new single-family dwelling the owner will keep for at least one year. Under B&P §7164, the written contract MUST contain:
a.A downpayment capped at $1,000 or 10 percent of the price, whichever is less
b.A three-business-day Notice of the Right to Cancel signed by the owner
c.The Mechanics Lien Warning and the approximate start and finish dates✓
d.A schedule of payments stating the amount of each payment in dollars and cents

B&P §7164(b) lists what a contract to build a single-family dwelling must contain: the contractor's name, address and license number; the approximate dates work will begin and be substantially completed; a legal description of the site; the statutory Mechanics Lien Warning; and a commercial general liability insurance statement with a check box. The downpayment cap of $1,000 or 10 percent belongs to §7159.5(a)(3), the payment schedule in dollars and cents to §7159.5(a)(4), and the three-business-day cancellation notice to §7159(e) and Civil Code §1689.7 for home-solicited contracts. All three are real California rules; none of them is what §7164 requires.

B&P §7164(b); cf. §7159.5(a)(3)-(4), §7159(e)
123. A new single-family home built in 2022 develops water intrusion at exterior windows in 2025. Under Civil Code §896 (SB 800 / Right to Repair Act), the homeowner's PRIMARY remedy is:
a.File suit at once for breach of contract and for negligence
b.Record a mechanics lien against the home for the repair cost
c.Report the builder to the CSLB and await its investigation
d.Serve a written claim notice and allow the statutory repair process✓

Civil Code §896 sets out the standards the Right to Repair Act covers, and the prelitigation chapter at §910 et seq. makes the homeowner serve written notice of the claim on the builder and let the statutory inspection and repair process run before filing. Suing immediately is barred while that process is available. A mechanics lien is the remedy of a person who furnished work or materials under Civil Code §8400, not of a homeowner with a defect. And a CSLB complaint is licence discipline: it neither starts nor satisfies the §910 process.

Civil Code §896; §910 et seq.; §8400
124. A subcontract contains a 'flow-down' clause stating the sub assumes toward the prime all obligations the prime owes the owner under the prime contract. The effect of this clause is that the subcontractor:
a.Owes the prime the same scope, schedule and quality duties✓
b.Becomes a direct party to the prime contract with the owner
c.May sue the owner directly for non-payment of its invoices
d.Is freed from any term not repeated in the subcontract

A flow-down clause incorporates the prime contract's obligations into the subcontract to the extent they reach the sub's scope, so the sub owes the general what the general owes the owner on that work - schedule, quality, indemnity, dispute resolution. It does not create privity, so the sub neither becomes a party to the prime contract nor gains a contract claim against the owner for non-payment; its remedies there are the lien and stop payment notice. And the clause works the opposite way from the last reading: terms not restated still bind.

Flow-down/pass-through clause; privity (industry practice); Civil Code §8400 et seq. (lien remedies)
125. A subcontract requires the sub to name the prime contractor and owner as ADDITIONAL INSUREDS on the sub's commercial general liability policy AND to provide a WAIVER OF SUBROGATION. The PRIMARY purpose of the waiver of subrogation is to:
a.Raise the limits of the sub's policy available to the prime
b.Bar the sub's insurer from suing the prime after it pays✓
c.Release the sub from its indemnity duty once the carrier pays
d.Make the prime's own carrier the primary payer for that loss

A waiver of subrogation stops the sub's carrier, once it has paid a covered loss, from standing in its insured's shoes and suing the prime to recover what it paid. It does not change how much insurance is available — that is what the limits and additional-insured status do. It does not touch the indemnity clause, which is a contractual duty that survives regardless of what the carrier pays. And it says nothing about whose policy responds first; that is the primary and non-contributory wording.

Commercial general liability / subrogation (industry practice); Civil Code §2778 (indemnity)
126. Under Bus. & Prof. Code §7159, a residential home improvement contract for $500 or more must include, in close proximity to the signature line, a notice informing the owner of the right to:
a.Withhold the entire contract price until the building department finals the permit
b.Require the CSLB registrar to inspect the work before the final payment
c.Cancel the transaction within 24 hours for any reason, without penalty
d.Cancel the transaction before midnight of the third business day after signing✓

B&P §7159(e) requires the home improvement contract to carry, in immediate proximity to the space for the buyer's signature, the 'Three-Day Right to Cancel' notice — captioned 'Five-Day Right to Cancel' if the buyer is a senior citizen, and seven business days for a contract to repair damage from a declared disaster — together with a detachable Notice of Cancellation in duplicate, in the language of the sales presentation. (c) shortens it to 24 hours, which is not a California period at all. (b) sends the owner to the wrong body: CSLB licenses and disciplines contractors, it does not inspect work or clear payments; the building department inspects. (a) inverts §7159.5(a)(5) — the contractor may not demand payment exceeding the value of work performed, but the owner gains no statutory right to hold the whole price until permit final. Worth knowing what else sits by the signatures: §7159(c)(6) requires a notice that the owner has the right to require the contractor to furnish a performance and payment bond.

Bus. & Prof. Code §7159(e); cf. §7159(c)(6), §7159.5(a)(5)
127. A change order on a home improvement contract is enforceable only if it is:
a.Oral, so long as the contractor logs it in the daily job record
b.Submitted to the CSLB for approval before the work is performed
c.Issued by the contractor alone if it stays under 10% of the contract price
d.In writing and signed by both parties before the changed work begins✓

B&P §7159(c)(5) makes a change-order form part of a home improvement contract only if it is in writing and signed by the parties prior to the commencement of any work covered by the change order; §7159(d)(13) requires the contract itself to say so under the heading Note About Extra Work and Change Orders. A daily job log is the contractor's own record, not the owner's signature. The CSLB licenses and disciplines contractors; it does not pre-approve change orders. And no percentage of the contract price lets a contractor change the work unilaterally - that is the practice §7159 was written to stop.

B&P Code §7159(c)(5); §7159(d)(13)
128. Under Bus. & Prof. Code §7191, a residential construction contract that contains a binding arbitration clause must:
a.Be filed with the CSLB registrar for review within 10 days after both parties have signed
b.Carry the statutory NOTICE only if the owner asks to see it
c.Name the American Arbitration Association as the forum, since no other body may arbitrate
d.Carry a capitalized NOTICE about waiving a jury trial, immediately above the initials✓

§7191(b) requires that, immediately after the arbitration provision and immediately before the space where the parties initial their assent, the contract carry the statutory NOTICE in capital letters, telling the owner that agreeing to arbitration gives up the right to a court or jury trial, to discovery and to appeal, and that the agreement is voluntary. (b) makes that notice optional; it is mandatory whenever the clause appears. (a) invents a filing step — CSLB does not review or file private contracts. (c) invents a forum mandate; §7191 regulates how the clause is presented, not who arbitrates. A clause that does not comply is unenforceable against anyone other than the licensee (§7191(c)) — the contractor stays bound either way.

Bus. & Prof. Code §7191(b)-(c)
129. Bus. & Prof. Code §7159 requires home improvement contracts to include the approximate dates when work will begin and when it will be substantially complete. If the contractor fails to commence the work within a reasonable time from the agreed start date, the consumer's primary remedy is to:
a.Complain to the district attorney's fraud unit after six months
b.Treat the unjustified delay as a material breach and rescind✓
c.Wait for the original completion date before any remedy ripens
d.Ask the Registrar to order the contractor to refund the deposit

B&P §7159(d)(10) and (d)(11) make the approximate start and completion dates required contract terms, so failing to start within a reasonable time is a breach of the contract itself — a material one that supports rescission, and conduct the CSLB may also pursue as abandonment under §7107 or failure to complete under §7113. Nothing requires a consumer to wait six months to complain, or to wait out the original completion date when the contractor never started. And the Registrar disciplines licensees; restitution comes through a disciplinary order, the license bond or a court, not on request.

B&P Code §7159(d)(10)-(11); §7107; §7113
130. An $80,000 residential remodel contract contains both a binding arbitration clause and a separate mandatory mediation clause. Under B&P §7191, the MEDIATION clause must:
a.Carry the same 10-point boldface title and separate initials required for the arbitration clause
b.Be filed with the CSLB registrar before the owner signs the contract
c.Meet no special §7191 formatting rule, because that section reaches only arbitration provisions✓
d.Be initialed by every owner of record, including a non-signing spouse

By its terms §7191 regulates 'a provision for arbitration of a dispute'. The special title, the 10-point roman boldface (or 8-point contrasting red), the capitalized NOTICE and the separate initials all attach to arbitration, because arbitration is what waives the owner's right to a court or jury trial, to discovery and to appeal. A mediation clause waives none of that — mediation is a non-binding settlement conference — so no §7191 formatting attaches to it. (a) is the usual misreading, treating the rule as covering any alternative-dispute clause. (b) invents a filing step; the Board does not review private contracts. (d) invents a signature rule; §7191(b) speaks of the parties to the contract, not of everyone on title.

Bus. & Prof. Code §7191(a)-(c)
131. Under California's Right to Repair Act (Civil Code §895 et seq., enacted by SB 800), what is the general statute of limitations for a homeowner to bring a construction defect claim against the builder for a function/use defect not otherwise specified?
a.Four years for patent defects and ten years for latent defects, under CCP §337.15
b.One year from close of escrow, the period for the fit-and-finish warranty
c.Three years from discovery of the defect, under the general tort statute
d.Ten years from substantial completion, with shorter periods for some defects✓

Civil Code §941(a) sets the outside limit for a Right to Repair Act claim at 10 years after substantial completion. Inside that window §896 gives many defect types their own shorter period — 4 years for plumbing and sewer, 5 years for paint and stains, 1 year for landscaping and irrigation, 2 years for noise transmission — so the answer is layered, not a single number. (a) is the PRE-SB 800 framework of Code of Civil Procedure §337.15, which still governs projects outside the Act but is not the §896 scheme this question asks about. (b) confuses the limitations period with the separate one-year express fit-and-finish warranty a builder must give under Civil Code §900. (c) applies the general three-year discovery rule for injury to real property (CCP §338(b)), which SB 800 displaced for covered residential construction.

Civil Code §896, §941; cf. Civil Code §900, Code Civ. Proc. §337.15, §338(b)
132. Under the SB 800 Right to Repair Act, before a homeowner may file a construction defect lawsuit, they must generally:
a.Obtain a written opinion from the CSLB registrar identifying the building standard violated
b.Wait out the ten-year statute of repose set by Civil Code §941
c.Serve the builder written notice of the claim and allow inspection and repair✓
d.File a complaint with the Department of Real Estate against the builder first

Civil Code §910 requires the homeowner to give the builder written notice describing the claimed violation of the §896 standards in reasonable detail. The builder then has inspection rights under §916 (initial inspection within 14 days of acknowledgment, a second inspection within 40 days) and may make a repair offer under §917; skipping the §910-§938 procedure generally bars or stays the suit under §930. (a) invents a Registrar function — CSLB investigates complaints and disciplines licensees, it does not issue defect opinion letters as a precondition to suit. (b) inverts the statute of repose: §941's ten years is the OUTSIDE limit, so waiting for it to run destroys the claim rather than ripening it. (d) sends the owner to the wrong agency; the Department of Real Estate regulates real estate licensees, not builders or contractors.

Civil Code §910, §916, §917, §930; cf. §941
133. On a residential remodel, the homeowner verbally asks the contractor to upgrade tile from $4/sf to $9/sf mid-project. The contractor proceeds without paperwork and later bills the extra $1,800. Under Bus. & Prof. Code §7159, the contractor is most likely:
a.Entitled to the full $1,800 because the owner orally agreed and accepted the work
b.Unable to enforce the upcharge, because §7159 requires a signed written change order✓
c.Entitled to the $1,800 because changes under 10 percent need no writing
d.Entitled to the $1,800 because material upgrades are incidental and exempt from §7159

B&P §7159(d) is explicit: a home improvement contract 'and any changes to the contract' must be in writing and signed by the parties BEFORE the work covered by the change order begins. §7159(e)(3) requires the contract itself to warn the buyer that extra or change-order work is unenforceable unless the change order states in advance and in writing the scope of the work, the amount added to or subtracted from the contract, and the effect on the progress payments and completion date. (a) is the common-law answer, and it is the wrong body of law — §7159 displaces oral assent for home improvement work. (c) invents a de minimis exception; the only relief §7159.5(a)(8) gives turns on furnishing a performance and payment bond, not on the size of the change. (d) invents an 'incidental work' exemption; moving tile from $4 to $9 a square foot changes both scope and price. The contractor also risks discipline under §7159.5 and §7160.

Bus. & Prof. Code §7159(d), §7159(e)(3); §7159.5(a)(8)
134. Bus. & Prof. Code §7159.5 limits progress payments on a home improvement contract such that, at any given time during the project, the amount paid by the owner may not exceed:
a.50% of the total contract price until the final inspection passes
b.The value of the work performed plus the materials delivered✓
c.10% of the contract price each month, whatever the progress made
d.The amount of the most recent invoice, with no cumulative limit

B&P §7159.5(a)(5) says that except for a downpayment, the contractor shall neither request nor accept payment that exceeds the value of the work performed or material delivered - the 'no payment ahead of the work' rule. Its companion is §7159.5(a)(3): if a downpayment is charged it may not exceed $1,000 or 10 percent of the contract amount, whichever is less. A 50 percent milestone, a flat 10 percent a month and invoice-driven payments appear nowhere in the section; each would let the owner's money run ahead of the work, which is the precise harm the statute addresses, and a violation is a misdemeanour as well as grounds for discipline.

B&P Code §7159.5(a)(5); §7159.5(a)(3)
135. A contractor knocks on doors and signs a 42-year-old homeowner to a $9,000 home improvement contract at her kitchen table. Under Civil Code §1689.7, she may cancel:
a.Until midnight of the seventh business day after she receives a signed copy
b.Until midnight of the third business day after she receives a signed copy✓
c.Only until the contractor begins work at her property, by written notice
d.Until midnight of the fifth business day after she receives a signed copy

Civil Code §1689.6(a)(2) gives the buyer of a home improvement contract written under B&P §7151.2 until midnight of the THIRD business day after receiving a signed and dated copy of the contract to cancel, and B&P §7159(e) requires the contract to carry a 'Three-Day Right to Cancel' notice plus a detachable Notice of Cancellation in duplicate, in the language of the sales presentation. Each distractor is a real California deadline attached to a different fact pattern. (a) Seven business days is the period for a contract to repair damage from a disaster for which a state of emergency has been declared — and, under §1689.6(b), for a personal emergency response unit. (d) Five business days is the extension §1689.6(a) gives senior citizens; this buyer is 42. (c) is the service-and-repair rule of §1689.6(a)(3) and B&P §7159.10, which applies only when the buyer initiated the call and the price is $750 or less.

Civil Code §1689.6-§1689.7; Bus. & Prof. Code §7159(e), §7159.10
136. On a private construction project, a direct contractor wants to enforce a 'pay-when-paid' clause to delay payment to a subcontractor by 90 days while waiting for the owner to pay. Under California prompt-payment law, this clause is generally:
a.Enforceable only as a timing provision, not as a shifting of nonpayment risk✓
b.Fully enforceable as written, including as a condition precedent excusing payment on owner default
c.Enforceable on public works projects only, never on private works of improvement
d.Void in every circumstance, because subcontractor payment deadlines cannot be modified by contract

California courts read a 'pay-when-paid' clause as fixing a reasonable TIME for payment, not as a condition precedent. Wm. R. Clarke Corp. v. Safeco Ins. Co. (1997) 15 Cal.4th 882 held a true 'pay-if-paid' clause unenforceable because it waives the subcontractor's constitutionally protected mechanics lien remedy. So the prime still owes the sub under B&P §7108.5 (within 7 days of receiving a progress payment) and Civil Code §8814 (within 10 days of receiving retention), with a 2-percent-per-month penalty on amounts wrongfully withheld. (b) is the pay-if-paid reading Clarke rejected. (c) invents a public/private split; §7108.5(e) applies to all private works AND all public works except those under Public Contract Code §10262. (d) overstates: the clause is not void, and §7108.5(a) expressly lets the parties agree in writing to a different progress-payment interval. What they cannot do is move the owner's insolvency onto the sub.

Bus. & Prof. Code §7108.5; Civil Code §8800, §8814; Wm. R. Clarke Corp. v. Safeco (1997) 15 Cal.4th 882
137. A homeowner hires a licensed contractor to remodel a kitchen for $18,000. At what contract price does California law require that a home improvement contract be put in writing?
a.Only contracts over $25,000 must be written
b.Any amount over $500 (labor and materials combined)✓
c.Any amount over $2,500
d.Any amount over $5,000

Under B&P §7159, a home improvement contract and any changes to it must be in writing whenever the aggregate contract price, including labor and materials, exceeds $500.

B&P §7159
138. Which of the following projects is NOT considered a 'home improvement' under the Contractors State License Law?
a.Erecting a new commercial warehouse from the ground up✓
b.Replacing a homeowner's fence and driveway
c.Adding a patio cover to a private residence
d.Installing a new swimming pool at a residence

B&P §7151 defines home improvement as repairing, remodeling, altering, or adding to residential property, including pools, fences, driveways, and patios. New commercial construction is not a home improvement.

B&P §7151
139. A contractor begins demolishing a homeowner's bathroom before the written home improvement contract is signed. Under the Contractors State License Law, this is:
a.Permissible, as long as the contract is signed within 30 days
b.Permissible if the homeowner gave verbal approval
c.Permissible if the down payment was already paid
d.A violation, because the contract must be signed by both parties before work begins✓

B&P §7159 requires that a home improvement contract be signed by both parties and a copy given to the owner before any work is performed. Starting work first is a violation.

B&P §7159(a)
140. A home improvement contract has a total price of $6,000. What is the maximum down payment the contractor may lawfully require?
a.$1,200
b.$1,500
c.$1,000
d.$600✓

Under B&P §7159, the down payment on a home improvement contract may not exceed $1,000 or 10% of the contract price, whichever is less. Ten percent of $6,000 is $600, which is less than $1,000.

B&P §7159(d)
141. A home improvement contract totals $40,000. What is the maximum lawful down payment?
a.$1,000✓
b.$4,000
c.$10,000
d.$2,000

The down payment cannot exceed $1,000 or 10% of the price, whichever is LESS. Ten percent of $40,000 is $4,000, but the $1,000 cap is lower, so $1,000 is the maximum.

B&P §7159(d)
142. After signing a home improvement contract at their kitchen table, a homeowner changes their mind. How many business days does the buyer generally have to cancel the contract?
a.Five business days
b.Two business days
c.Seven calendar days
d.Three business days✓

A home solicitation home improvement contract may be canceled by the buyer within three business days after signing, under California's home solicitation cancellation law (Civil Code §1689.5 et seq.).

Civil Code §1689.7
143. A 72-year-old homeowner signs a home improvement contract. How many business days does this senior buyer have to cancel?
a.Ten business days
b.Five business days✓
c.Four business days
d.Three business days

For a buyer who is a senior citizen (65 years of age or older), California extends the home solicitation right to cancel to five business days rather than three.

Civil Code §1689.6
144. A contractor structures a home improvement contract so that each progress payment is due 'as work proceeds.' Under §7159, each progress payment must:
a.Be collected only on completion of the project taken as a whole
b.Not exceed the value of work performed or material delivered✓
c.Be at least $5,000 for the whole payment schedule to be enforceable
d.Equal exactly one-third of the total price stated in the contract

B&P §7159.5(a)(5) bars the contractor, downpayment aside, from requesting or accepting payment exceeding the value of the work performed or material delivered, so 'as work proceeds' is lawful only if the amounts actually track the work. §7159.5(a)(4) is the companion requirement: where payments fall due before completion, the contract must carry a schedule of payments in dollars and cents specifically referencing the work or services to be performed and the materials and equipment to be supplied. A schedule saying only 'as work proceeds' fails that on its face. (c) and (d) invent arithmetic the statute never uses — there is no minimum instalment and no thirds rule. (a) is the opposite error: nothing requires the contractor to finance the job, and progress payments up to the value in place are exactly what the statute allows.

Bus. & Prof. Code §7159.5(a)(4)-(5)
145. Which document, warning homeowners that unpaid subcontractors and suppliers may place a claim against their home, must be included in a home improvement contract?
a.A Notice of Completion
b.A Notice of Non-Responsibility
c.The Mechanics Lien Warning✓
d.A Preliminary Bond Notice

B&P §7159 requires a home improvement contract to contain a Mechanics Lien Warning, informing the owner that those who supply labor or materials and are not paid may record a lien against the property.

B&P §7159(c)
146. A home improvement contract states the project 'will start sometime soon and finish when done.' What is the defect?
a.It omits the approximate start and completion dates the law requires✓
b.Nothing is wrong with it, since approximate dates are entirely optional
c.Dates are required only on contracts worth more than $50,000 in total
d.Only the start date is required, never the completion date

B&P §7159(d)(10) requires the heading 'Approximate Start Date' followed by the approximate date work will commence, and §7159(d)(11) requires the estimated completion date to be referenced — both of them — and §7164(b)(2) requires the same pair in a contract to build a single-family dwelling. 'Sometime soon' and 'when done' are not approximations but the absence of a term, and §7159(a)(5) makes that cause for discipline. (d) keeps half the requirement, which is how this violation usually looks in practice. (c) invents a dollar threshold; the only threshold in the article is the $500 that makes it a home improvement contract at all. (b) reads 'approximate' as 'optional', when the statute has already made its concession by asking for an approximate date rather than a firm one.

Bus. & Prof. Code §7159(d)(10)-(11), §7159(a)(5); cf. §7164(b)(2)
147. Which of the following is a mandatory element that must appear in every written home improvement contract?
a.The homeowner's Social Security number
b.The contractor's license number✓
c.The contractor's personal home address
d.A notarized signature from a witness

B&P §7159 requires the contract to include the contractor's name, business address, and license number, among other elements. The homeowner's SSN and notarization are not required.

B&P §7159(c)
148. A contractor asks a homeowner to sign a home improvement contract that still has blank spaces for the price and scope of work. Under the CSLB law, this practice is:
a.Acceptable if filled in later that day
b.A prohibited act and grounds for disciplinary action✓
c.Allowed if the homeowner initials each blank
d.Allowed for repeat customers

B&P §7161 makes it a prohibited act (and cause for discipline) to cause a buyer to sign a contract containing blank spaces to be filled in after signing.

B&P §7161
149. After a home improvement contract is signed, when must the contractor give the homeowner a copy?
a.Only upon the homeowner's written request
b.After the first progress payment is made
c.Within 10 days of signing
d.Before any work begins, when the contract is signed✓

B&P §7159 requires the contractor to furnish the buyer a fully completed, signed copy of the contract before any work is performed.

B&P §7159(a)
150. A change order that increases the price of a home improvement project by $3,000 is agreed to verbally on-site. To be enforceable under §7159, the change order must be:
a.Witnessed by the project inspector
b.Recorded with the county recorder
c.Approved by the CSLB in advance
d.In writing and signed by both parties✓

B&P §7159 requires that any change to a home improvement contract be in writing and signed by both the contractor and the owner before the extra work is done.

B&P §7159(c)
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