A service and repair contract for HVAC maintenance totals $850. The work is performed at a commercial building. Which requirement applies under B&P Code 7159.5?
Correct Answer
B) Written contract required without cancellation notice
Since the contract exceeds $500, a written contract is required under B&P 7159.5. However, the 3-day cancellation right typically applies to residential, not commercial work.
Why This Is the Correct Answer
B&P Code 7159.5 governs service and repair contracts. For work exceeding $500, a written contract is required. However, the 3-day right to cancel (with the required cancellation notice) applies to residential transactions, not commercial ones. Since this is a commercial building, the written contract requirement applies but the 3-day cancellation notice does not.
Why the Other Options Are Wrong
Option A: No written contract required
No written contract is required is incorrect. Once a service or repair contract exceeds $500, a written contract is mandatory under B&P 7159.5. The $850 contract here clearly exceeds that threshold.
Option C: Written contract required with 3-day cancellation notice
Written contract with 3-day cancellation notice would be required for residential home improvement contracts over $500. The 3-day cancellation right is a consumer protection measure tied to residential transactions — commercial clients do not receive this statutory protection.
Option D: Verbal contract acceptable with written estimate
A verbal contract with a written estimate is not an acceptable substitute when the contract value exceeds $500. B&P 7159.5 requires an actual written contract, not just an estimate. The distinction between an estimate and a binding written contract is legally significant.
Memory Technique
Key distinction: '$500 threshold = written contract required for EVERYONE (residential and commercial). 3-day cancellation notice = RESIDENTIAL ONLY.' Commercial clients are sophisticated parties who do not get the same consumer protections as homeowners.
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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?