Contracts & ExecutionQuestion 132 of 1605
On a $6,000 home improvement contract, what is the maximum allowable down payment?
a.$600
b.$1,000
c.$1,500
d.$3,000
Explanation
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.
Law Reference: Bus. & Prof. Code §7159.5Practice all 1605 questions free — no signup required.
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