Contracts & ExecutionQuestion 541 of 690
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 690 questions free — no signup required.
Related questions on this topic
- A subcontractor on a private project completes its work and the prime contractor withholds 10% retention. The owner has accepted the project and released all retention to the prime. Under B&P §7107, the prime must release the sub's retention within how many days?
- 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 consumer signs a home-solicitation contract for solar panel installation at her residence on a Tuesday at 6 PM. Under Civil Code §1689.5 et seq., she may cancel without penalty until midnight on:
- A commercial construction contract has a liquidated damages clause of $2,500 per day for late completion. Under Civil Code §1671(b), this clause is presumed:
- A residential construction contract over $500 contains a mandatory arbitration clause. Under B&P §7191, that clause must:
- A homeowner contracts with a Class B contractor to build a new single-family home for $425,000. Under B&P §7164 (residential new construction), the contract MUST include:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against California CSLB Contractor License Law & Business Exam · How we review