Business Practices and Contract Law Flashcards
6 cards from real C27 LICENSE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Business Practices and Contract Law flashcards as text
Under California law, what is the maximum deposit a contractor may collect from a homeowner at the start of a home improvement project?
Answer: 10% of the contract price or $1,000, whichever is less
California Business and Professions Code Section 7159.5 limits contractor deposits to 10% of the contract price or $1,000, whichever is less, to protect consumers.
Which document must a California contractor provide to a homeowner before starting a home improvement project?
Answer: A written contract that includes a three-day right to cancel notice
California law requires contractors to provide a written contract including a Notice of the Three-Day Right to Cancel before beginning any home improvement work.
What is the 'right to cure' provision in California contractor law?
Answer: The contractor's right to fix alleged defective work before the homeowner can pursue legal action
The right to cure allows a contractor to repair or remedy alleged construction defects before the homeowner can pursue a lawsuit or arbitration.
When must a California contractor include a Mechanics Lien Warning in a home improvement contract?
Answer: For all home improvement contracts regardless of the contract amount
California law requires a Mechanics Lien Warning in every home improvement contract to inform homeowners that their property may be subject to liens if subcontractors or suppliers are not paid.
What must a C-27 contractor do if a project requires work outside the scope of the landscaping license?
Answer: Hire a licensed contractor holding the appropriate classification for that work
Contractors must subcontract work outside their licensed classification to a contractor holding the appropriate license — performing out-of-scope work is a license violation.
What is the minimum information required in a California contractor's written home improvement contract?
Answer: Contractor's license number, description of work, start and completion dates, and payment schedule
California law specifies that written contracts must include the contractor's license number, scope of work, project timeline, payment schedule, and multiple required disclosures.