A repair shop provides a written estimate of $850 for transmission work. The actual repair costs $1,100. What is required under B&P Code 7159.5?
Correct Answer
B) Shop must obtain customer authorization before exceeding the estimate by more than $100 or 10%
B&P Code 7159.5 requires customer authorization before charges can exceed the written estimate by more than $100 or 10%, whichever is less.
Why This Is the Correct Answer
B&P Code 7159.5 requires that before charges may exceed a written estimate by more than $100 or 10% (whichever is less), the contractor or repair facility must obtain explicit customer authorization. In this scenario the overrun is $250 — far beyond the $85 (10% of $850) or $100 threshold — so prior customer approval was legally required before proceeding.
Why the Other Options Are Wrong
Option A: Customer must pay the full $1,100 since they signed the estimate
Signing the estimate is not a blank check. California law imposes a cap on how much work can proceed above the estimate without renewed authorization. An initial signature does not waive statutory consumer protections.
Option C: Shop can only charge $850 as originally estimated
Limiting the charge strictly to $850 is also incorrect. The law allows the actual cost to exceed the estimate as long as the required authorization was obtained. It does not freeze the price at the estimate; it controls the process for getting approval to exceed it.
Option D: Shop can charge up to 20% more than the estimate without authorization
A 20% allowance without authorization does not exist in B&P 7159.5. The actual threshold is $100 or 10%, whichever is less — not 20%. This distractor inflates the permissible overage to mislead.
Memory Technique
Remember '100 or 10, whichever wins the race to the bottom.' The smaller of $100 or 10% sets the ceiling for how much you can go over without calling the customer. In most jobs under $1,000, that means $100 wins (since 10% is less than $100). Always call before you overshoot.
More California Questions
A homeowner signs a $15,000 home improvement contract on Monday at 2 PM at the contractor's office. Under California law, what is the latest time the homeowner can cancel the contract without penalty?
A swimming pool contract for $28,000 is signed on Wednesday at the customer's home. The contract includes proper cancellation notices. If the customer wants to cancel, they must do so by when?
Under California's prompt payment law, if a contractor submits a proper payment request to a property owner, payment is due within how many days?
A general contractor hires a subcontractor for $22,000. The general contractor receives payment from the owner but fails to pay the subcontractor within how many days, subjecting themselves to penalty interest?
Under California Civil Code Section 8180, when must a subcontractor serve a preliminary notice on a private work project?
Which of the following contracts is NOT subject to the 3-day right to cancel under California law?
A subcontractor completes roofing work on Tuesday, March 15th. The general contractor is paid by the owner on Friday, March 25th. Under California prompt payment laws, what is the latest date the general contractor must pay the subcontractor?
A contractor receives a progress payment of $18,000 from a property owner on Monday. The contractor owes subcontractors $12,000 of this amount. By what day must the contractor pay the subcontractors?
A swimming pool contractor enters into a $45,000 contract to install an in-ground pool. The contract includes a $5,000 down payment. What is the maximum down payment the contractor can legally collect under California law?
A contractor completes $15,000 worth of electrical work on a commercial building. The property owner disputes $3,000 of the charges. Under California prompt payment law, what amount must the owner pay within the required timeframe to avoid penalties?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Contract Administration
60 questions · 70% to pass
Project Management
60 questions · 70% to pass
Related Study Resources
Previous Question
A homeowner signs a $12,000 roofing contract at their residence on Friday at 3:00 PM. They decide to cancel on the following Monday at 10:00 AM. Is this cancellation valid?
Next Question
A homeowner exercises their 3-day right to cancel a $15,000 kitchen remodeling contract. The contractor had already ordered $2,500 in custom cabinets that cannot be returned. Who is responsible for this cost?