Before You Sign a Contractor's Contract
A contractor's contract protects both of you - but only if it includes the right terms. This 25-point checklist covers everything California homeowners should verify before signing. Items are ranked by severity: critical (required by law), important (protects your money), and recommended (best practice).
Required by California Law
Contractor's full legal name and business address
California B&P Code 7159 requires the contractor's name and address on every home improvement contract. A PO Box alone is a yellow flag.
CSLB license number and classification
The license number must appear on the contract. Verify it's active using our License Checker. The classification should match your project (Class B for general remodeling).
Deposit is $1,000 or 10% of contract, whichever is less
California B&P Code 7159.5 sets this limit. Any deposit above this amount is illegal. Use our Deposit Calculator to verify.
Total contract price
The total price must be stated clearly. If the contract says 'estimated' or 'approximate,' ask for a fixed price or a clearly defined 'not to exceed' amount.
3-day right to cancel notice (if applicable)
If the contractor solicited you at your home (they came to you), the contract must include a Notice of Cancellation form per California Civil Code 1689.5.
Start date and estimated completion date
B&P Code 7159 requires approximate start and completion dates. 'TBD' is not acceptable. If they can't commit to dates, they're not organized enough for your project.
Important - Protects Your Money
Detailed scope of work
Every room, every task, every trade should be listed. 'Kitchen remodel' is not a scope. 'Demo existing cabinets, install 14 LF of Shaker-style maple cabinets in white, install Cambria quartz countertops...' is a scope.
Specific material specifications
Brand, model, grade, color, and finish for every material. 'Tile: TBD' means you'll pay whatever they decide. 'Tile: Daltile Keystones 3x6 in Arctic White' is what you need.
Payment schedule tied to milestones
Payments should trigger at verified completion points: demo complete, rough inspection passed, cabinets installed, substantial completion, final walkthrough. Never pay ahead of work completed.
Change order process defined
The contract should specify: what constitutes a change order, how it's priced, written approval required before work starts, and how it affects the timeline. No verbal change orders.
Warranty on workmanship
Industry standard: 1-2 years minimum. Some quality contractors offer 5-10 years. 90 days is below standard. Get the warranty terms in writing - what's covered, what's excluded, how to make a claim.
Lien waiver requirement
The contract should state that the contractor will provide conditional lien waivers with each payment request and unconditional waivers after payment clears. This protects you from mechanic's liens.
Insurance requirements stated
The contract should require the contractor to maintain general liability and workers comp insurance throughout the project. Ask for a certificate of insurance before work starts.
Permit responsibility assigned to contractor
The contract should state that the contractor will obtain all required permits in their name and license number. If the contract says 'owner to obtain permits,' push back.
Cleanup and debris removal included
Daily cleanup and final debris removal should be in the scope. If not, you'll be paying for a dumpster and cleanup crew separately.
Dispute resolution clause
Mediation before arbitration or litigation. This saves both parties time and money. Watch for mandatory binding arbitration clauses that waive your right to sue.
Recommended - Best Practice
Subcontractor disclosure
The contract should list which trades will be subcontracted and ideally name the subcontractors. You have a right to know who's working in your home.
Work hours defined
Typical: Monday-Friday, 7 AM - 4 PM. Some cities have noise ordinances. Having this in writing prevents 6 AM Saturday surprises.
Site access and security plan
How will workers access your property? Who has keys? Where will materials be stored? What's the lockup procedure at end of day?
Protection of existing finishes
Floor protection, dust barriers, protection of landscaping, and coverage of furniture and fixtures should be specified.
Inspection schedule outlined
The contract should note which inspections are required and that the contractor will schedule them. You should be notified of each inspection.
Final walkthrough and punch list process
The contract should describe the final walkthrough process, how the punch list is created, the deadline for completing punch list items, and that final payment is held until completion.
Document retention
The contractor should provide copies of all permits, inspection records, warranties, and lien waivers in a final project package at completion.
No acceleration clause
Some contracts include clauses that accelerate the entire remaining balance if you miss one payment. This is one-sided and should be removed.
Termination clause is balanced
Both parties should have the right to terminate with written notice. The clause should define how work-to-date is valued and paid. Watch for clauses that penalize you for terminating but not the contractor.
Common questions
What must a California construction contract include by law?
Under B&P Code 7159, a California home improvement contract must include: contractor's name, address, license number, and classification; total contract price; payment schedule; approximate start and completion dates; scope of work; 3-day right to cancel notice (if applicable); and the contractor's CSLB license number.
Can I negotiate a contractor's contract?
Absolutely. The contract a contractor gives you is their starting point, not a final document. You can and should negotiate terms - especially payment schedule, warranty, change order process, and dispute resolution. A contractor who refuses to negotiate any terms is a red flag.
What if my contractor won't put something in writing?
If a contractor makes a verbal promise but refuses to include it in the contract, assume it won't happen. The contract is the only enforceable agreement between you. 'We'll take care of it' means nothing if it's not in writing.
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