Let's say a given commercial tenant improvement project will cost
about $75,000 total and will take about 60 days to complete including
the final inspection.  Are their laws in California that general
contractors are supposed to follow when it comes to invoicing the
customer? In other words, are they supposed to bill invoices according
to the overall progress? Or, are they allowed to invoice in any way
they see fit even if it includes proactive reimbursement for expenses
not yet incurred? I'm trying to clarify the question by posing
examples of other questions that your answer could potentially
address--although my examples are quite extreme and I don't expect
direct answers to those questions. The way I see it, on the one hand
you have general contractors who don't want to act as a bank of sorts
by financing everything until the project is complete. On the other
hand, you have customers that don't want to pay "in full" before the
work is complete because to do otherwise removes almost all incentive
they have to do the job accurately and in a timely manner. Are their
laws that govern this relationship in terms of when and for how much
they can invoice?

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Request for Question Clarification by pafalafa-ga on 27 Sep 2006 16:03 PDT

There's usually a contract (that's why they call them contractors!)
between the contractor and customer that spells out -- among other
things -- payment schedules at particular project milestones.

Is that not the case in the example at hand?

pafalafa-ga

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Clarification of Question by brian22-ga on 03 Oct 2006 16:23 PDT

That's a great pun about contractors! However, my interest in this
topic does not stem from a consumer viewpoint but here's an example
that should fit well with your comment. As you point out, a contract
between a contractor and a customer should specify payment terms.
Let's assume, for example, the contract specified "10% of the total
estimated amount is required in the form of a deposit at the time this
agreement is signed". Although both parties can certainly agree to
this and sign it as a term in the contract, it would be null and void
because it violates California law which states that no more than
$1,000 may be required for a deposit. Also, you and I could enter into
an agreement of indentured servitude and it would be a contract.
However, since indentured servitude is illegal in California, that
term of the contract never existed. In short, I'm not looking for
"best practices" or "how to use good judgment when negotiating payment
terms" or "how to figure out what you agreed to in your contract".
Rather, I'm looking for any laws that act as boundaries, guidelines,
or limitations as to what those contract terms can or can not specify.