Contract question.

[knoppdude]

I recently talked with a contractor who said that her company will take the deposit amount allowed by the state after a contract is signed, CA in this case, and then if necessary, have a payment schedule that allows for payment to start before work begins. Does anyone else do this? She said that this was necessary in many cases to cover material costs upfront. It seems like a good idea to me, I must have missed the information on that when studying for the license. I have searched the state civil code, and it does not prohibit this.

 

[Dennis Alwon]

You will get both sides of the argument here. Personally I would never pay up front to a contractor, unless I really knew them, for work not done. Nor have I ever charged anyone up front.

I only do resi work so that is not really a big issue.

 

[lowryder88h]

Contract

Contract

On sizeable commercial or industrial jobs, we use a schedule of payment form. The first on the list is called mobilization which is a percentage of the entire contract. ie. Mobilization $$$$
Temps $$$$
Underground $$$$

All the above are percentages of the entire job up to 100%

 

[Sierrasparky]

Is this a new home or remodel?
If this is in Ca you cannot let payment get ahead of work. You cannot charge ahead for special orders. Lets say you are special ordering Panels. wire, fixtures. You cannot take a dime for those other than the original contract deposit. You can charge once deliverd to the site.

It gets pretty hairy for other trades like a window company. The window company cannot charge a deposit greater than 1K the windows could cost 50k and you canot charge a dime till deliverd. It sounds ok on paper but it can get very risky to the window guy. Now if you are a sub you working for a GC you can charge what you want.

 

[cadpoint]

That exact subject has be discussed here, using advanced search one should be able to pick that pertaining matter of California up...

You might try various terms of that subject matter. California legal, CA contracts, etc.

I thought it had exact dollor limits and contractural arrgements, limits, etc. for all parties involved, or not!

 

[satcom]

I recently talked with a contractor who said that her company will take the deposit amount allowed by the state after a contract is signed, CA in this case, and then if necessary, have a payment schedule that allows for payment to start before work begins. Does anyone else do this? She said that this was necessary in many cases to cover material costs upfront. It seems like a good idea to me, I must have missed the information on that when studying for the license. I have searched the state civil code, and it does not prohibit this.

The laws on what is permitted will differ from state to state, on residential work, we always require a deposit, and payments are clearly defined in the contract, without a signed contract and terms, we would invite payment problems, the handshake world can be a disaster for someone in business, with overhead and operating expenses to meet.