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California requires a written home improvement contract for any work on a residential property totaling $500 or more, including both labor and materials (B&P §7159). Note: this $500 written-contract threshold is a DIFFERENT number from the $1,000 unlicensed minor-work threshold under §7048 — SB 517 amended §7159 for 2026 (subcontractor-disclosure rules), but left this $500 figure in place, so do not confuse the two.

The three-day right of rescission applies to contracts solicited and signed at the consumer's home. The homeowner has until midnight of the third business day to cancel without penalty.

California law requires home improvement contracts to include the contractor's name, address, license number and expiration date, description of work, project start and completion dates, and payment schedule.

All changes to a home improvement contract must be documented in a written change order signed by both the contractor and homeowner before the changed work begins.

A contractor may not demand or accept final payment until the project is substantially complete. Demanding payment before this point is a violation of California Contractors' Law.

Arbitration clauses are permitted in construction contracts but must be clearly disclosed, written in at least 10-point boldface type in home improvement contracts, and separately initialed by the homeowner.

Abandonment without legal excuse exposes a contractor to license discipline (suspension/revocation), civil liability for breach of contract, and potentially criminal charges for misappropriation of funds.

While permits can technically be pulled by the owner, it is the contractor's professional responsibility to ensure all required permits are obtained before work begins. Working without required permits is a license violation.

A force majeure clause excuses a party from performance when extraordinary events beyond their control (weather, acts of God, pandemics) prevent timely completion. It protects the contractor from delay damages.

Liquidated damages are enforceable if: (1) damages were difficult to estimate at contract signing, and (2) the amount is a reasonable estimate of probable harm — not a penalty.

The preliminary notice is not a demand for payment — it preserves the right to file a mechanics' lien later if the contractor or supplier is not paid. Without it, lien rights may be lost.

A T&M contract pays the contractor for actual labor hours at an agreed rate plus actual material costs, typically plus overhead and profit markup. The total cost is not fixed in advance.

Under a fixed-price (lump sum) contract, the contractor agrees to complete the work for a set price regardless of actual costs. If costs exceed the estimate, the contractor absorbs the loss.

The prime contractor can withhold payment from the defaulting subcontractor, hire a replacement to complete the work, and sue the original sub for any additional cost incurred above the original subcontract price.

On private works, owners must pay general contractors within 30 days of a proper undisputed invoice. On public works the period is 30 days from invoice or 39 days from billing, depending on the agency.

Because payment comes from the owner, this is a private project. Under Civil Code §8814 (and B&P §7108.5), a direct (general) contractor must pay each subcontractor its share within 7 days of receiving a progress payment from the owner, or face a 2%-per-month penalty. Ten days is the separate deadline for releasing withheld retention to a subcontractor — not the progress-payment rule this question asks about.

California's Right to Repair Act (SB 800) establishes statutory warranties for new residential construction: 1 year for most components, 4 years for plumbing/electrical/mechanical, 10 years for structural defects.

California limits the down payment on a home improvement contract to $1,000 or 10% of the contract price, whichever is LESS. Here 10% would be $4,000, so the smaller cap of $1,000 controls.

The down payment 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, so $600 is the legal maximum.

Home improvement contracts must state the work description, payment schedule, and start/completion dates, among other items. A homeowner's income is private financial information and is never a required contract term.

The contractor must furnish the buyer a fully completed and signed copy of the home improvement contract before any work begins, so the buyer can review terms and exercise cancellation rights.

A buyer may cancel a home solicitation home improvement contract until midnight of the third business day after signing. The cancellation right is exercised by written notice delivered within that window.

California prohibits front-loading. Each progress payment must not exceed the value of work actually performed and materials actually delivered, protecting the homeowner if the contractor stops work.

An arbitration clause in a contract for residential work must appear in at least 10-point boldface type, contain prescribed disclosure language, and be separately initialed or signed by the consumer.

Any change in the contract price, scope, or terms must be documented in a written change order signed by both parties. Verbal change orders are unenforceable and a license law violation.

B&P Code §7164 sets the required terms for contracts to build a new single-family residential structure sold to the person it is built for. Home improvement (remodel/repair) contracts are governed by §7159.

The law requires the contract to bear a clear heading identifying it as a "Home Improvement" contract so the consumer knows which set of protective rules applies to the agreement.

A person who solicits or negotiates home improvement contracts on behalf of a contractor must be registered with the CSLB as a Home Improvement Salesperson (HIS), unless they are an officer of the licensed entity.

The contract must contain a notice describing the CSLB, including its contact information, so consumers know how to verify a license, learn about the contractor's history, and file a complaint.

The contractor must attach to the contract a properly completed Notice of Cancellation (typically two copies) that the buyer can complete and mail to exercise the three-day cancellation right.

While the standard home solicitation cancellation period is three business days, California extends the cancellation period to seven business days for senior citizens, including certain disaster and emergency repair contracts.

Upon a valid cancellation, the seller must, within 10 days, refund all payments made and return any goods traded in. The contractor may not retain a fee for a properly cancelled contract.

Any home improvement work over $500 requires a written contract before work begins. Starting on a verbal agreement violates license law and exposes the contractor to discipline and unenforceable payment claims.

It is unlawful to demand or accept a payment that exceeds the value of the work performed and materials delivered. The other choices describe proper, lawful contracting practices.

Willfully departing from or disregarding plans or stopping work without legal excuse and without the owner's consent is abandonment, a cause for license discipline under B&P §7107.

A fixed-price or lump-sum contract sets one total price for the entire scope. The contractor profits if costs come in low and loses if they run high, bearing the cost risk.

In a cost-plus-percentage contract, the contractor is reimbursed for actual costs and earns a fee equal to an agreed percentage of those costs. The owner bears most of the cost risk.

A unit-price contract sets a price per unit of work (per cubic yard, per linear foot, etc.). The total contract value depends on the actual measured quantities completed.

In a GMP contract, costs are reimbursed up to a negotiated ceiling. Any cost overrun above the cap is borne by the contractor, capping the owner's financial exposure.

Margin is gross profit divided by the selling price. Profit is $100,000 - $80,000 = $20,000; $20,000 / $100,000 = 20% margin. (Markup, by contrast, divides profit by cost: $20,000 / $80,000 = 25%.)