Legal Question in Construction Law in California

By law a contractor is generally only entitled to payment for completed work based on the progress of the job. Typically, there will be milestones in the contract indicating how much is due and when (e.g. $10,000.00 upon completion of rough framing) or progress payments due based on a percentage completed (e.g. $1,000.00 down, 25% upon 50% completion, etc.). This includes for materials, particularly if they are not "custom order" materials. I would be extremely wary of a contractor that is requiring full payment before the work is complete. In fact, I would insist that there be a clause in the contract entitling you to withhold 10% of all progress payments until the job is substantially complete and, even then, make that final payment (retention payment) due 30 days after such substantial completion.

A contractor may not request payment for work that has not yet been performed. An owner can choose to pay in full ahead of time, but the contractor cannot require or request such advance payment. Payments are generally required to be equal in amount to the scope of work completed.