Contracts & ExecutionQuestion 146 of 1632

A homeowner asks a contractor to begin a $15,000 kitchen remodel based only on a verbal agreement. The contractor should:

a.Begin at once, since a verbal deal over $500 still binds both parties
b.Refuse to start until a written contract is signed by both parties
c.Collect the 10% down payment first, then put the deal in writing
d.Start work, and write the contract before the first progress bill

Explanation

B&P §7159(a) requires a home improvement contract, and any change to it, to be in writing and signed by the parties before the work it covers begins, once the aggregate price exceeds $500. A $15,000 remodel on a handshake is unenforceable by the contractor and is cause for discipline, so the size of the job is no reason to start. Taking the deposit first fails twice over: the contract must come first, and §7159.5 caps the down payment at $1,000 or 10% of the price, whichever is less - here $1,000, not the $1,500 that 10% would give. And papering the contract later, whether at the first billing or at the end, does not cure work that began without one.

Law Reference: Bus. & Prof. Code §7159(a); §7159.5(a)(3)

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