According to B&P Code 7159.5, service and repair contracts must include specific provisions. Which statement is correct regarding these contracts?
Correct Answer
D) The contract must specify that no work exceeding $750 will be performed without prior written authorization
B&P Code 7159.5(a)(4) requires service and repair contracts to include a statement that no work exceeding $750 in cost will be performed without the prior written authorization of the person contracting for the work.
Why This Is the Correct Answer
Business and Professions Code Section 7159.5(a)(4) specifically mandates that service and repair contracts must include a clear statement that no work exceeding $750 in cost will be performed without obtaining prior written authorization from the person contracting for the work. This provision protects consumers from unexpected charges and ensures transparency in service work pricing. The $750 threshold is a critical consumer protection measure that contractors must strictly observe.
Why the Other Options Are Wrong
Option A: The contractor may begin work immediately without waiting periods
B&P Code 7159.5 requires service and repair contracts to be in writing and include specific provisions. Oral agreements are not acceptable for service work under $1,000 or any amount. The written contract requirement ensures proper documentation and consumer protection.
Option B: Service contracts under $500 are exempt from all disclosure requirements
Service and repair contracts under B&P Code 7159.5 include specific provisions about timing and authorization. Contractors cannot begin work immediately without following proper procedures, including obtaining written authorization for work exceeding $750 and complying with other contractual requirements.
Memory Technique
Remember '750 Written' - any service work over $750 requires Written authorization before proceeding.
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