Contracts & ExecutionQuestion 539 of 1632
A home-improvement contract has a total contract price of $48,000. Under B&P §7159(d), the MAXIMUM down payment the contractor may demand or accept before any work or material delivery is:
a.$2,500
b.$1,000
c.$4,800 (10% of contract)
d.$5,000 or 10%, whichever is greater
Explanation
B&P §7159(d) caps the down payment on a home improvement contract at the LESSER of $1,000 or 10% of the contract price, exclusive of finance charges. Here 10% would be $4,800 so the lesser amount of $1,000 controls.
Law Reference: Bus. & Prof. Code §7159(d)This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
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