The five core clauses
A construction contract should always include parties and license number, scope of work, total price and payment schedule, start and substantial completion dates, and signatures with dates. Missing any of these creates either a legal defect or grounds for a CSLB complaint, especially on home-improvement projects.
Scope of work
Write scope in plain language with measurable deliverables. Reference plan sheets by number and date. List exclusions explicitly so the homeowner cannot later claim that an item was included. The exam tests this concept under the rule: if it is not in writing, it is not in the contract.
Payment schedule
Tie progress payments to objective milestones such as rough framing complete, drywall complete, or final inspection passed. Avoid front-loading. California limits the initial down payment on home-improvement contracts to the lesser of $1,000 or 10% of the price, and progress payments cannot exceed the value of work performed plus materials delivered to the site.
Required notices
Home-improvement contracts must include the three-day right of cancellation notice, the mechanics lien warning, a notice about the Construction Industry Licensing Fund, and information on commercial general liability coverage. Service and repair contracts have their own slimmer notice set when the work is under $750 and started immediately.
Mini-quiz
Attempt 1 · 4 questions
Check your understanding. Passing is 70% — but you can keep going to the next lesson either way.
Question 1
Based on "The five core clauses", which statement is correct?
Question 2
Based on "Payment schedule", which statement is correct?
Question 3
Based on "Payment schedule", which statement is correct?
Question 4
Based on "The five core clauses", which statement is correct?