Contract Law and Dispute Resolution Flashcards

Under California law, a written home improvement contract is required for projects exceeding what dollar amount?

Answer: $750

California Business and Professions Code §7159 requires a written contract for home improvement projects where the total price exceeds $750.

What is the maximum down payment a contractor may legally collect from a homeowner at the start of a home improvement project in California?

Answer: 10% of the contract price or $1,000, whichever is less

California law caps initial down payments at 10% of the contract price or $1,000, whichever is less, to protect consumers from contractor fraud.

A California mechanic's lien must be filed within how many days after project completion for a direct contractor?

Answer: 90 days

Under California Civil Code §8412, a direct (prime) contractor must record a mechanic's lien within 90 days after the work of improvement is completed.

Before recording a mechanic's lien, a subcontractor or supplier must first serve a:

Answer: Preliminary Notice (20-day notice)

California Civil Code requires subcontractors and material suppliers to serve a Preliminary Notice (formerly called a 20-day notice) before they can record a valid mechanic's lien.

Which clause in a construction contract allows the owner to direct the contractor to perform additional work beyond the original scope?

Answer: Changes clause

The Changes clause (or change order clause) gives the owner the right to order changes in the work and requires the contractor to proceed while price and time adjustments are negotiated.

In California, a homeowner has the right to cancel a home improvement contract (3-day right of rescission) if:

Answer: The contract was signed at the owner's home

California consumers have a 3-business-day right of rescission for home improvement contracts solicited and signed at their home, under the Home Solicitation Sales Act.