Contracts & ExecutionQuestion 788 of 1605
A homeowner offers to prepay 100% of a $5,000 job to get a discount. Without a joint control, the contractor may lawfully accept a down payment of at most:
a.$1,000
b.$500
c.$2,500
d.$5,000
Explanation
Ten percent of $5,000 is $500, which is less than the $1,000 cap, so the maximum lawful down payment is $500 even though the owner offers to prepay in full.
Law Reference: B&P §7159(d)Practice all 1605 questions free — no signup required.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)