A homeowner signs an $8,900 home improvement contract for a kitchen remodel before work starts. What is the largest lawful down payment?
Correct Answer
A) $890.
The down payment limit is the lesser of $1,000 or 10 percent of the contract price. Ten percent of $8,900 is $890.
Why This Is the Correct Answer
The down payment limit is the lesser of $1,000 or 10 percent of the contract price. Ten percent of $8,900 is $890.
Why the Other Options Are Wrong
Option B: $1,000 cap.
$1,000 cap. is above the supported result for down payment calculation; it likely adds scope or money the rule does not allow.
Option C: $1,780 amount.
$1,780 amount. is above the supported result for down payment calculation; it likely adds scope or money the rule does not allow.
Option D: $500 courtesy.
$500 courtesy. is below the supported result for down payment calculation; it likely omits part of the approved scope, cap, credit, or holdback.
Memory Technique
Checking Residential cap: a grand or a tenth; the smaller gate opens.
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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