According to California Civil Code Section 8560, a stop payment notice on a private project that is NOT accompanied by a bond cannot exceed what amount?
Correct Answer
B) $1,200
California Civil Code Section 8560 provides that an unbonded stop payment notice on a private project cannot exceed $1,200. If the claimant wants to stop payment for amounts exceeding $1,200, they must provide a bond equal to 125% of the claimed amount.
Why This Is the Correct Answer
$1,200 is the maximum for an unbonded stop payment notice on a private project under Section 8560. For amounts exceeding $1,200, the claimant must post a bond equal to 125% of the claimed amount to protect the owner and lender from a potentially wrongful notice.
Why the Other Options Are Wrong
Option A: $5,000
$5,000 significantly exceeds the $1,200 cap. An unbonded notice of this size would be invalid under the statute.
Option C: $500
$500 is below the $1,200 cap, so it would technically be permissible as an unbonded notice — but $500 is not the maximum the statute allows. The correct maximum is $1,200.
Option D: $2,500
$2,500 exceeds the $1,200 cap and would require a bond. This figure may be confused with other thresholds in construction law.
Memory Technique
The number $1,200 is the hinge point: below or at $1,200 you can go unbonded; above $1,200 you need a bond for 125% of the claim. Picture a seesaw balanced at $1,200 — one side is 'bonded required,' the other is 'unbonded OK.'
More law-business Questions
Under B&P Code Section 7071.9, a contractor may deposit cash or securities instead of obtaining a surety bond. If a contractor chooses this option, where must the deposit be maintained and what happens to interest earned?
Under California's AB 5 law (Dynamex decision), which factor is NOT part of the ABC test for determining independent contractor status?
According to Business and Professions Code Section 7031, what is required when a licensed contractor supervises work performed by unlicensed employees on a construction project?
Under California Building Standards Code Title 24, which entity has the authority to issue building permits for most residential and commercial construction projects?
According to B&P Code 7159.5, service and repair contracts must include specific provisions. Which statement is correct regarding these contracts?
Which of the following activities is exempt from California contractor licensing requirements under Business and Professions Code Section 7048?
Under Cal/OSHA regulations in Title 8 CCR Section 5192, Safety Data Sheets (SDS) for hazardous chemicals used on construction sites must be readily accessible to employees during which hours?
Under California Business and Professions Code Section 7071.9, in lieu of a surety bond, what alternative security may a contractor provide to satisfy the contractor license bond requirement?
According to Cal/OSHA regulations, which of the following is NOT a required element of a written Injury and Illness Prevention Program (IIPP)?
A homeowner requests that a B-General Building Contractor provide a certificate of insurance naming the homeowner as an additional insured on the contractor's general liability policy. Under California law, what is the contractor's obligation?
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