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A bilateral contract is formed by an exchange of promises: both sides are bound the moment the promises are exchanged, and each promise is the consideration for the other. Almost every construction contract is bilateral — the contractor promises to build, the owner promises to pay. (d) is the unilateral contract, where the offer asks for a completed act rather than a promise, so nothing binds the offeree until he performs and the act is both acceptance and performance (Civil Code §1584). (c) describes that same unilateral arrangement from the offeror's side, which is why it reads plausibly. (a) removes the element Civil Code §1550 makes essential; a promise without consideration is not a kind of contract but a failed one.

An offer that asks for a completed act rather than a return promise is a unilateral contract offer, and performance of the act is both the acceptance and the performance (Civil Code §1584) — finishing the removal obligates the homeowner to pay. (b) is the standard confusion: had the homeowner said 'promise me you will remove it and I will pay $1,000', the exchange of promises would make it bilateral. (c) misapplies Civil Code §1624, which reaches contracts not performable within a year, transfers of real property and the like, not a same-day tree removal. (d) misreads 'if and when you finish' as reserving a choice; it states a condition on the contractor's performance, not an escape from the homeowner's promise, so the promise is not illusory.

A term is ambiguous when it is reasonably capable of more than one meaning, so that reasonable people could read it differently. Ambiguity, not mere length, capitalization, or the presence of technical terms, is what permits a court to consider extrinsic evidence to determine the parties' intent. Under the doctrine of contra proferentem, genuine ambiguities are often construed against the party who drafted the language.

The doctrine of contra proferentem provides that when a contract term is genuinely ambiguous, courts construe it against the party who drafted it, because that party had the opportunity to write clearly and should bear the risk of unclear language. This encourages careful drafting. It does not favor the wealthier party, the first signer, or leave interpretation to chance; the drafter bears the burden of the ambiguity.

Civil Code §1651 provides that where a contract is partly written and partly printed, the written parts control the printed parts where the two are inconsistent, and §1650 subordinates particular clauses to the contract's general intent. The reasoning is evidentiary: the parties negotiated the typed line, they merely inherited the boilerplate. (a) reverses the rule. (d) hands the tie to the drafter, which is backwards twice over — Civil Code §1654 resolves genuine ambiguity AGAINST the party who caused it to exist. (b) treats an internal conflict as fatal, but §1641 requires the whole of a contract to be read together so as to give effect to every part rather than to void it.

A voidable contract is a real, enforceable contract that one party has the power to disaffirm — for minority, fraud, duress, menace, undue influence or mistake, the grounds listed in Civil Code §1567 — and it stays in force until that party elects to rescind under Civil Code §1689. (b) describes a VOID contract, which has no effect from the outset, typically because its object is unlawful or impossible (Civil Code §1598, §1667). The difference matters because only a voidable contract can be ratified and then enforced. (c) states the consequence of voidness, not voidability, and misses that the party without the power to disaffirm stays bound throughout. (d) confuses voidability with the Statute of Frauds; an oral contract can be perfectly valid and a written one perfectly voidable.

A contract entered into under duress, such as a threat of physical harm that overcomes a party's free will, is voidable by the victim. Genuine consent is an essential element of a valid contract, and coercion undermines it. The mere fact that a document was signed does not make it enforceable if consent was coerced. The defense does not depend on whether the contract was written, and threats are highly relevant to whether assent was voluntary.

Civil Code §1575 defines undue influence as taking an unfair advantage of another's weakness of mind, or using a real or apparent authority or a confidential relationship to get an unfair advantage: consent is given, but not freely, so the contract is voidable. The distractors are its three siblings on the §1567 list of defects in consent — (a) is duress (§1569), (c) is actual fraud (§1572), and (b) is mistake of fact (§1577). All four make a contract voidable; only undue influence turns on a relationship of trust or dominance rather than on a threat, a lie, or an error.

Civil Code §1577 defines mistake of fact as a mistake not caused by the neglect of a legal duty, consisting in unconscious ignorance or forgetfulness of a material fact, and §1567 lists mistake among the defects that make consent unreal. §1689(b)(1) makes a contract entered into through mistake rescindable, with §1692 requiring the rescinding party to restore what it received. The mistake must be MUTUAL and material: a unilateral mistake generally binds the mistaken party unless the other knew of it or caused it. (d) states the rule for exactly that unilateral case, which is why it reads plausibly. (c) confuses an honest shared error with wrongdoing; punitive damages under §3294 need oppression, fraud or malice and are unavailable on a contract claim. (a) invents a multiplier.

Civil Code §1572 defines actual fraud and §1709 the tort of deceit: a representation of a material FACT, known to be false or made recklessly without belief in its truth, made to induce the other party to act, justifiable reliance, and resulting damage. (a) fails on the fact element — an honest opinion or prediction about future value is not a statement of existing fact, which is why sales talk is not actionable. (b) fails on scienter: a statement true when made does not become fraud because events later disappoint. (c) is no representation at all; drafting is not a statement of fact. The distinction pays: fraud is a tort, so unlike a contract claim it opens the door to punitive damages under Civil Code §3294, and where the fraud induced a home improvement contract, to the $500 penalty and fees in B&P §7160.

Restitution measures what the defendant received rather than what the plaintiff lost: it gives back the benefit conferred so the defendant is not unjustly enriched. It is the measure that travels with rescission — Civil Code §1692 requires the rescinding party to restore what it received — and with quantum meruit where no enforceable price term exists. (d) is specific performance, which enforces the bargain instead of unwinding it. (c) confuses a civil remedy with a penalty; fines run to the state, and Civil Code §3294 bars punitive damages on a contract claim in any event. (a) inverts the American rule — Code of Civil Procedure §1021 leaves each side to bear its own fees unless a contract or statute provides otherwise.

Consequential or special damages flow from the injured party's particular situation — profits lost on the next job because this one ran late — and Civil Code §3300 limits recovery to detriment that was likely to result in the ordinary course or that the breaching party had reason to foresee, the rule of Hadley v. Baxendale. (c) describes GENERAL or direct damages, which follow from the breach itself and need no special showing of foreseeability; the contrast between the two is the entire point of the category. (b) describes nominal damages, awarded under Civil Code §3360 when a right is invaded but no loss is proved. (a) confuses the measure with the price; consequential damages can exceed the contract price, which is exactly why commercial contracts so often waive them.

Nominal damages are a token sum recognising that a right was invaded where no substantial loss was proved; Civil Code §3360 provides for them expressly. They are not pointless: a nominal award still establishes the breach, which can carry a costs or attorney's-fee entitlement with it. (c) describes compensatory damages, the ordinary measure under Civil Code §3300. (d) describes punitive damages under §3294, which punish rather than recognise and are unavailable on a contract claim. (a) describes liquidated damages under §1671 — a figure the parties agreed to in advance, which displaces the need to prove loss at all.

Waiver is the intentional relinquishment of a known right: it needs knowledge of the right and conduct showing an intention to give it up, and conduct counts as much as words — which is how a party that accepts late payments for months can waive the strict-timing clause it later wants to enforce. (d) is a novation, which requires everyone's consent and a substituted obligation (Civil Code §1530). (c) is specific performance, a court remedy rather than a party's own act. (b) is arbitration, a forum agreement. One caution: not every right can be waived. The Three-Day Right to Cancel in B&P §7159(e) is waivable only through the narrow emergency route in Civil Code §1689.13, and the mandatory §7159 contract terms are not waivable at all.

The clause exists to force changes into writing so that a later dispute is settled by a document rather than by two memories — the same discipline B&P §7159(d) makes mandatory on home improvement work, where an unsigned change order is unenforceable against the buyer. (c) overstates it: Civil Code §1698(b) allows an oral agreement to modify a written contract to the extent the oral agreement is executed by the parties, and waiver or a course of conduct can defeat the clause, so 'impossible to modify' is wrong even on a commercial job. (b) confuses a documentation rule with a pricing mechanism; the price moves only if the change order says so. (a) confuses it with a warranty disclaimer, a wholly separate clause.

An accord is the agreement to accept something different from or less than what is owed, in extinction of a disputed obligation (Civil Code §1521); the satisfaction is actually performing it (§1523). Both halves are needed — the accord alone suspends the old obligation, it does not discharge it. Cashing a check tendered in full settlement of a genuinely disputed amount is the everyday example. (b) describes waiver or the running of the statute of limitations, neither of which is a bargained settlement. (a) changes the forum that will decide the claim without settling it at all. (d) is a judgment, which enforces the original obligation rather than substituting a new one.

Civil Code §1511 excuses performance prevented or delayed by an irresistible superhuman cause, by the operation of law, or by the other party, and the courts add commercial impracticability — extreme and unreasonable difficulty or expense that was not foreseeable, not merely more than was budgeted. The three distractors are one error in three costumes. (b) is estimating risk, which is precisely what a fixed price allocates to the contractor. (c) is reduced profit, which the doctrine has never covered. (a) is opportunity cost, not an excuse at all but a reason for a breach the contractor still pays for. Compare frustration of purpose, where performance stays entirely possible but the shared reason for it is gone.

Frustration of purpose excuses performance when an event neither party foresaw destroys the principal purpose both understood as the basis of the bargain, even though the promised performance remains entirely possible — the textbook case is renting a room to watch a parade that is then cancelled. (b) is impossibility, where performance itself cannot be rendered; the doctrines are neighbours, not synonyms, and Civil Code §1511 sets out when performance is excused. (c) is commercial impracticability, which California applies narrowly: added cost, even large added cost, is the risk a fixed-price contractor accepted. (d) is buyer's remorse, which excuses nothing at all.

An intended third-party beneficiary, someone the contracting parties intended to benefit directly, may generally enforce the contract even though they did not sign it, once their rights have vested. This differs from an incidental beneficiary, who benefits only indirectly and cannot sue. The beneficiary need not be a licensed contractor and does not automatically assume liability for the price; being an intended beneficiary confers enforcement rights, not payment obligations.

Civil Code §1559 gives a contract 'made expressly for the benefit of a third person' the right to be enforced by that person — 'expressly' is the word doing the work. A third party who merely gains because the contract exists is incidental and has no claim: the neighbour whose property value rises when you remodel, the supplier who expects more orders if the job goes ahead. (c) describes the INTENDED beneficiary, the contrast this question turns on; a subcontractor named as a payee, or an owner named in a subcontract, can sue on it. (a) is wrong twice over — the owner is usually a party to the prime contract and an intended beneficiary of the subcontracts. (d) invents a consent right; no beneficiary, intended or incidental, controls the parties' changes.

A bid is an offer to do the described work at the stated price; a contract forms only on acceptance. Until then the owner may reject it, it lapses after the time stated or a reasonable time, and it is generally revocable — though on public works a bid bond and Public Contract Code §5100 et seq. sharply limit withdrawal, and a general contractor's reasonable reliance on a subcontractor's bid can make that bid irrevocable under Drennan v. Star Paving (1958) 51 Cal.2d 409. (a) collapses offer into acceptance; opening a bid is not accepting it. (b) confuses a price proposal with a warranty — a fixed price allocates cost risk but warrants nothing about scope. (c) confuses the bid with the bid bond, which is the instrument that actually puts money behind a withdrawal.

Promissory estoppel substitutes detrimental reliance for bargained-for consideration: the promisor should reasonably expect the promise to induce action or forbearance, the promisee does justifiably and substantially rely, and injustice can be avoided only by enforcing the promise. In construction the classic application is a general contractor's reliance on a subcontractor's bid — Drennan v. Star Paving (1958) 51 Cal.2d 409. Each distractor removes one required element: (b) drops foreseeability of reliance, so the promisor had no reason to guard his words; (c) drops reliance itself, leaving a bare gratuitous promise that no theory enforces; (a) drops the objective reasonableness that makes reliance justifiable.

Drennan v. Star Paving Co. (1958) 51 Cal.2d 409 is the California authority: a subcontractor who submits a bid knowing the general will use it in a prime bid should expect reliance, and once the general wins the job on the strength of that number the sub's offer becomes irrevocable for a reasonable time. No consideration was paid to hold the bid open; reliance takes its place. (a) inverts the parol evidence rule, which excludes outside evidence contradicting an integrated writing — it cannot make an offer binding. (c) treats the writing as the source of the obligation; the Statute of Frauds says which agreements need a writing, and a signed bid is still only an offer until accepted. (d) is a clause for events beyond a party's control; changing one's mind about a price is not such an event.

A retention or retainage clause lets the owner withhold part of each progress payment as security that the contractor will finish properly and correct defects, releasing it after satisfactory completion or acceptance (c). The percentage is no longer open-ended: Public Contract Code §7201 caps most public works at 5%, and Civil Code §8811 caps private works at 5% for contracts entered into on or after January 1, 2026, leaving the older 10% practice only for pre-2026 contracts and the statute's narrow exceptions. (a) is wrong because retention is money held back, not a claim on the contractor's property. (b) confuses retention with an administrative charge — retention is the contractor's own earned money, held temporarily, not a fee. (d) is wrong because the withheld money is paid when the conditions are met; a warranty period does not license the owner to keep deferring it.

A progress payment schedule provides for the contractor to be paid in installments as the work reaches defined milestones or percentages of completion, aligning payment with performance and helping fund ongoing costs. It avoids both full prepayment, which would over-expose the owner, and long-deferred payment, which would over-expose the contractor. It is a payment mechanism within the contract, not a substitute for having a written contract.

A contract or clause so grossly unfair and one-sided, formed under a serious imbalance of bargaining power, that it shocks the conscience may be declared unconscionable and refused enforcement, in whole or part. Unconscionability typically has both procedural (unfair bargaining process) and substantive (unfair terms) dimensions. It is unrelated to being 'liquidated,' 'integrated' (a completeness concept), or 'unilateral' (an acceptance-by-performance concept).

The scope of work fixes the boundary of what the contractor promised: inside it, the work is covered by the contract price; outside it, the work is a compensable extra. Every extras and change-order dispute is decided by reading it, which is why B&P §7159(d)(7) makes a description of the project and the significant materials a required term of a home improvement contract. (b) describes the project schedule, a different document — the scope says what, not when. (c) describes the changes clause, which sets the pricing mechanism once work outside the scope is ordered; the scope only tells you the work IS outside. (d) describes a differing-site-conditions clause; a bare scope statement allocates no risk.

When the signed agreement, the general conditions, the specifications and the drawings disagree — and on a real job they do — an order-of-precedence clause says which one wins, typically the agreement over the conditions over the specifications over the drawings, with addenda outranking what they amend. Without such a clause a court falls back on interpretation rules such as Civil Code §1651, under which specially written terms control over printed ones. (c) is the payment-priority misreading; the clause ranks DOCUMENTS, not people, and payment to subcontractors is governed by B&P §7108.5. (b) confuses it with a notice-of-claim or limitations provision. (a) confuses it with the rate schedule in a time-and-materials contract.

An indemnity shifts the financial consequence of a claim from one party to another — the subcontractor agrees that if a third party sues the general over the sub's work, the sub carries it. California regulates construction indemnity heavily: Civil Code §2782 makes void any clause purporting to indemnify the promisee against liability arising from the promisee's OWN sole negligence or wilful misconduct, or for defects in design it furnished, and §2782.05 further limits Type I indemnity in most private construction subcontracts. (b) confuses indemnity with a time extension; indemnity moves money, not schedule. (c) and (d) describe giving away the work or the payment, which no indemnity does — the clause allocates the risk of THIRD-PARTY claims, not the parties' own exchange.

A severability clause states that if a court finds one provision invalid or unenforceable, that provision is severed and the remaining valid provisions continue in full effect, preserving as much of the parties' bargain as possible. It prevents a single defective clause from destroying the whole agreement. It does not void the entire contract, resurrect the invalid provision, or automatically cut the price; it isolates the unenforceable term.

California follows the American rule: Code of Civil Procedure §1021 leaves each side to bear its own attorney's fees unless a contract or a statute says otherwise, so (a) describes the DEFAULT the clause exists to displace. Civil Code §1717 then does something drafters often do not expect — it makes any contractual fee clause reciprocal, so a clause written to protect one side alone still entitles whichever party prevails to recover, which is why (b) is wrong even when the contract says exactly that. (d) invents a cap; 'reasonable' is fixed by the court on the work actually done. Some fee entitlements come from statute rather than contract: B&P §7108.5(c) gives fees to the prevailing party in an action for wrongfully withheld subcontractor payments.

A later writing signed by both parties that moves the completion date and adds $6,000 of scope is a modification of the existing contract, supported by fresh consideration on both sides — new work for new money (Civil Code §1698(a)). (d) is the usual error on this item: the parol evidence rule (Code Civ. Proc. §1856) excludes PRIOR or contemporaneous agreements that would contradict an integrated writing; it says nothing about an agreement made afterwards. (c) reaches for novation, which under Civil Code §1530 requires the parties to intend to extinguish the old obligation and substitute a new one; adding scope leaves the original contract standing. (b) calls a signed writing oral.

A time-and-materials contract prices the work by inputs, so an invoice is worth exactly what the record behind it is worth: dated daily logs of who worked and for how many hours at which agreed rate, what material arrived, and the supplier invoices proving it. B&P §7159.10(e)(7) shows the same logic in statute for a service-and-repair job estimated on time and materials — the contract must disclose the set rate, the estimated cost of materials, and how time is computed, in quarter hours, half hours or hours. (a) is irrelevant to proving work done; liquidated damages fix the consequence of a breach in advance. (d) proves a precondition to suing at all under B&P §7031, not the amount owed. (b) documents attendance, not hours, rates, or materials.

A clear, integrated scope of work sets the boundary of the fixed price; a task outside it is an extra, and it becomes compensable when the owner orders it. On home improvement work that order must be a change order in writing, signed before the changed work begins (B&P §7159(d)), and §7159(e)(3) requires the contract to warn the buyer that extras without such an order are unenforceable against him. (a) is the owner's version of the argument, and it proves too much: if a fixed price covered anything anyone later wanted, the scope clause would mean nothing. (b) misapplies the Statute of Frauds, which decides which agreements need a writing at all (Civil Code §1624), not whether an integrated contract can be added to. (d) blames the contractor for not pricing work nobody asked him to price.

Signing the wrong person costs the contractor twice. The contract binds only the party who signed, so a tenant, a property manager or one co-owner acting alone can leave the contractor with no claim against the person who owns the property — and the mechanics lien is no rescue, because Civil Code §8444 lets an owner who did not contract for the work record a signed and verified notice of nonresponsibility and take the fee interest out of reach. For a home improvement contract, B&P §7159(d) requires the writing to be signed by the parties to the contract, so who signs is a compliance question as well as a collection one. (b) is backwards: less certainty about who is bound makes a written scope more necessary, not less. (c) and (d) are invented — public works status turns on public funds and a public awarding body, and no signature sets a price.

Every dispute about extras is really a dispute about what the scope said and whether the change was authorised, and the contractor is the party who loses when neither was written down. On home improvement work this is not merely best practice but the law: B&P §7159(d) requires the contract and any change to it to be in writing and signed before the covered work begins, and §7159(e)(3) makes the contract warn the buyer that an extra without such an order is unenforceable against him. (d) is the argument that vagueness leaves room to negotiate; in practice it leaves room for the owner to say the work was always included. (c) removes the one term §7159(d)(5) makes mandatory. (b) works right up until the money is disputed, which is the only moment the question is asked.

Arbitration clauses are lawful in California. What §7191 polices is the presentation: on residential property of four or fewer units the provision must be clearly titled ARBITRATION OF DISPUTES, set in at least 10-point roman boldface in a printed contract, and separately initialed after the statutory notice. A provision that fails those requirements is not simply thrown out — subdivision (c) leaves it unenforceable against any person OTHER than the licensee, so the contractor is still bound by the clause it drafted.

Section 2782(a) declares against public policy, and void and unenforceable, any provision in a construction contract that purports to indemnify the promisee against liability arising from the promisee's SOLE negligence or willful misconduct. Agreement does not save it, and insurance does not save it: the section voids the clause whatever the parties wrote and whatever cover stands behind it. Nor is it limited to bodily injury; the section names death, bodily injury, injury to property and other loss alike.

A guaranteed maximum price reimburses cost up to a ceiling and stops there: everything above the ceiling is the contractor's, so the $36,000 overrun is the contractor's and the owner pays $400,000. That is what distinguishes a GMP from ordinary cost-plus, where the owner reimburses whatever the job actually consumes. It also distinguishes a GMP from a lump sum, because below the ceiling the owner is still paying real costs rather than a single agreed price.