A $9,950 window replacement contract is signed at the owner's home in Oakland. What is the maximum down payment under the CA home improvement rule?
Correct Answer
A) $995, because 10 percent is less than $1,000.
The down payment is limited to the lesser of $1,000 or 10 percent. Ten percent of $9,950 is $995.
Why This Is the Correct Answer
The down payment is limited to the lesser of $1,000 or 10 percent. Ten percent of $9,950 is $995.
Why the Other Options Are Wrong
Option B: $1,000, because every home improvement contract may take that amount.
$1,000, because every home improvement contract may take that amount. is above the supported result for project contracts; it likely adds scope or money the rule does not allow.
Option C: $1,990, because window materials are custom ordered.
$1,990, because window materials are custom ordered. is above the supported result for project contracts; it likely adds scope or money the rule does not allow.
Option D: $500, because contracts under $10,000 use a fixed limit.
$500, because contracts under $10,000 use a fixed limit. is below the supported result for project contracts; it likely omits part of the approved scope, cap, credit, or holdback.
Memory Technique
Project Contracts cue Checking Residential: ceiling and percentage shake hands; the lower hand controls.
Reference Hint
Study anchor (closed-book): memorize Project contracts from CSLB 2026 Law Book; CSLB Home Improvement Contracts / Business and Professions Code Section 7159; know the rule or calculation trigger without relying on exam-room lookup.
More Law & Business Questions
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