Contracts & ExecutionQuestion 192 of 690
A contractor wishes to require a larger down payment than the law allows because a custom-ordered material must be paid for up front. The proper way to handle this is to:
a.Simply collect 50% down and note it as 'custom materials'
b.Have the homeowner waive the down payment limit in writing
c.Use a separate finance charge or special-order provision allowed by law, not an unlawful oversized down payment
d.Collect the full contract price before ordering anything
Explanation
The down payment cap ($1,000 or 10%, whichever is less) cannot be waived by the homeowner. Special-order or custom-material costs must be handled through lawful contract provisions, not an oversized down payment.
Law Reference: Bus. & Prof. Code §7159Practice all 690 questions free — no signup required.
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