Contracts & ExecutionQuestion 695 of 1632
A home improvement contract totals $40,000. What is the maximum lawful down payment?
a.$1,000
b.$4,000
c.$10,000
d.$2,000
Explanation
The down payment cannot exceed $1,000 or 10% of the price, whichever is LESS. Ten percent of $40,000 is $4,000, but the $1,000 cap is lower, so $1,000 is the maximum.
Law Reference: B&P §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 →
Practice all 1632 questions free — no signup required.
Own the complete CSLB Law & Business guide — PDF + EPUB, $24.99 →
Related questions on this topic
- Which of the following projects is NOT considered a 'home improvement' under the Contractors State License Law?
- A contractor begins demolishing a homeowner's bathroom before the written home improvement contract is signed. Under the Contractors State License Law, this is:
- A home improvement contract has a total price of $6,000. What is the maximum down payment the contractor may lawfully require?
- After signing a home improvement contract at their kitchen table, a homeowner changes their mind. How many business days does the buyer generally have to cancel the contract?
- A 72-year-old homeowner signs a home improvement contract. How many business days does this senior buyer have to cancel?
- A contractor structures a home improvement contract so that each progress payment is due 'as work proceeds.' Under §7159, each progress payment must:
Last reviewed: · editorial process
PrepPass team · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)