Contracts & ExecutionQuestion 541 of 1605
A contractor wishes to collect progress payments on a home-improvement contract. Under B&P §7159.5, each progress payment must:
a.Equal exactly 10% of the contract regardless of work completed
b.Be payable upon material delivery regardless of installation
c.Be paid in cash to avoid bank delays
d.Not exceed the value of work performed and materials delivered to the site
Explanation
B&P §7159.5 prohibits front-loading: progress payments may not exceed the value of work performed and materials actually delivered to the job site. Demanding payment in excess of work completed is a violation of contractor licensing law.
Law Reference: Bus. & Prof. Code §7159.5Practice all 1605 questions free — no signup required.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)