Contracts & ExecutionQuestion 879 of 1632
A 'progress payment' schedule in a construction contract is designed to:
a.Pay the contractor in installments as defined portions of the work are completed
b.Delay all payment until years after completion
c.Require the owner to pay the entire price before work begins
d.Eliminate the need for a written contract
Explanation
A progress payment schedule provides for the contractor to be paid in installments as the work reaches defined milestones or percentages of completion, aligning payment with performance and helping fund ongoing costs. It avoids both full prepayment, which would over-expose the owner, and long-deferred payment, which would over-expose the contractor. It is a payment mechanism within the contract, not a substitute for having a written contract.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)