A homeowner signs a $9,600 home improvement contract. What is the largest down payment allowed before work starts?
Correct Answer
A) $960.
The down payment limit is the lesser of $1,000 or 10 percent. Ten percent of $9,600 is $960, so the maximum is $960.
Why This Is the Correct Answer
The down payment limit is the lesser of $1,000 or 10 percent. Ten percent of $9,600 is $960, so the maximum is $960.
Why the Other Options Are Wrong
Option B: $1,000 cap amount.
$1,000 cap amount. is above the supported result for down payment calculation; it likely adds scope or money the rule does not allow.
Option C: $1,920 progress amount.
$1,920 progress amount. is above the supported result for down payment calculation; it likely adds scope or money the rule does not allow.
Option D: $480 courtesy amount.
$480 courtesy amount. is below the supported result for down payment calculation; it likely omits part of the approved scope, cap, credit, or holdback.
Memory Technique
Down Payment cue Checking Residential: ceiling and percentage shake hands; the lower hand controls.
Reference Hint
Study anchor (closed-book): memorize Down payment calculation from CSLB 2026 Law Book; CSLB Home Improvement Contracts / B&P Code Section 7159 home improvement contract requirements; know the rule or calculation trigger without relying on exam-room lookup.
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