California Construction Contract Template

Updated on August 3, 2026

California regulates home improvement contracts in detail through Business and Professions Code §7159: a written contract is required once labor and materials exceed $500, the down payment is capped, specific content is mandatory, and the homeowner has a legal right to cancel. Two 2026 amendments (Senate Bill 517 and Assembly Bill 1327) added new requirements that took effect January 1, 2026 — a subcontractor-disclosure rule and an email cancellation option.

The contract below is the form: answer the subcontractor question above it and the required disclosure is added for you, type straight into the highlighted blanks, and both parties sign on the signature lines. Download a clean Word or PDF file with no sign-up and no watermark.

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Will subcontractors perform more than 50% of the estimated project cost?

Home Improvement Contract

This Home Improvement Contract is made on between of , CSLB license number (the "Contractor"), and of (the "Homeowner").

1. Project

Description of work:
Approximate start date:
Approximate completion date:

2. Price and Payment

Contract price:: $
Down payment:: $
Progress payment schedule:

3. Mechanics Lien Warning

NOTICE TO OWNER: Under California law, contractors, subcontractors, laborers, and suppliers of materials or equipment who are not paid for their work or supplies have a right to record a mechanics lien against the Homeowner's property. This means that after a court hearing, the Homeowner's property could be sold by a court officer and the proceeds used to satisfy the debt, even if the Homeowner has paid the Contractor in full. The Homeowner may wish to protect against this by requiring the Contractor to provide lien releases from anyone who supplied labor or materials, or by using joint checks.

4. Notice of Cancellation

The Homeowner may cancel this Contract without any penalty within 3 business days of signing it (5 business days for a senior citizen, or 7 business days for an emergency repair contract following a declared state of emergency), by delivering written notice to at or by email to .

5. General

This Contract represents the complete agreement between the Contractor and the Homeowner regarding the project described above and is governed by California law.

The Contractor

Date:

The Homeowner

Date:

The core §7159 requirements

Any home improvement project where labor and materials exceed $500 requires a written contract. The down payment cannot exceed $1,000 or 10% of the contract price, whichever is less. The contract must include the contractor's name, business address, and license number, a "Home Improvement" heading in 10-point boldface type, the price, a description of the work, approximate start and completion dates, and a progress payment schedule tied to specific work. It must also include a mechanics lien warning explaining that unpaid subcontractors and suppliers can lien the property even if the homeowner has paid the contractor in full. Homeowners have the right to cancel: 3 business days for a standard contract, 5 business days for senior citizens, or 7 business days for an emergency repair contract following a declared emergency.

New for 2026: subcontractor disclosure (SB 517)

As of January 1, 2026, if subcontractors will perform more than 50% of the estimated project cost, the contract must name those subcontractors and provide their contact information. Using subcontractors doesn't reduce the general contractor's responsibility for completing the project, and it doesn't excuse subcontractors or salespersons from discipline for violating home improvement contract laws.

New for 2026: cancellation by email (AB 1327)

As of January 1, 2026, homeowners can cancel a home improvement contract by email, not just by mail. The Notice of Cancellation form must now state the contractor's name, address, and email address, with a statement telling the homeowner they can send the cancellation notice to whichever of those the contract lists.

The clauses, explained

Home Improvement heading and license number: Required by §7159: a prominent "Home Improvement" heading and the contractor's CSLB license number.
Price and down payment: The contract price, with the down payment capped at $1,000 or 10% of the price, whichever is less.
Subcontractor disclosure: Only needed if subcontractors will perform more than half the estimated project cost — names and contact details are required for those subcontractors under SB 517.
Mechanics lien warning: A mandatory notice explaining that unpaid subcontractors or suppliers can lien the property even after the homeowner pays the contractor in full.
Notice of cancellation: States the homeowner's right to cancel within the applicable period, and now includes the contractor's email address as a valid way to send the cancellation under AB 1327.

Requirements checklist

Written contract above $500
A home improvement contract must be in writing once labor and materials exceed $500.
Cal. Bus. & Prof. Code §7159
Down payment cap
The down payment cannot exceed $1,000 or 10% of the contract price, whichever is less.
Cal. Bus. & Prof. Code §7159
Subcontractor disclosure (2026)
If subcontractors will perform more than 50% of the estimated project cost, the contract must name them and provide contact information.
SB 517 (2025-2026)
Cancellation by email (2026)
Homeowners can cancel by email, and the cancellation notice must list the contractor's email address as a valid recipient.
AB 1327 (2025-2026)

How to use this template

Fill in the contractor and homeowner details. Type the contractor's name, address and CSLB license number, and the homeowner's details, into the highlighted blanks.
Set the price and down payment. Fill in the contract price, keeping the down payment within the $1,000 or 10% cap.
Disclose subcontractors if they'll do most of the work. If subcontractors will perform more than half the estimated project cost, say so in the selector above the contract — the disclosure clause is added for you — then name them and give their contact details.
Sign, download and add your required notices. Both parties sign on the signature lines, then download the contract as a Word or PDF file and make sure the version you hand over carries the mechanics lien warning and cancellation notice in the required type size.

Frequently asked questions

When does a California home improvement contract need to be in writing?

Once labor and materials exceed $500. Below that, a written contract isn't legally required, though it's still good practice.

How much can a contractor ask for as a down payment?

No more than $1,000 or 10% of the contract price, whichever is less.

What changed in California construction contracts for 2026?

Two new rules took effect January 1, 2026: contracts must name subcontractors who will perform more than half the estimated project cost (SB 517), and homeowners can now cancel by email, with the contractor's email address required on the cancellation notice (AB 1327).

How long do I have to cancel a home improvement contract?

3 business days for a standard contract, 5 business days if you're a senior citizen, or 7 business days for an emergency repair contract following a declared emergency.

Does using subcontractors reduce the general contractor's responsibility?

No — California law is explicit that using subcontractors doesn't excuse the general contractor from responsibility for completing the project.

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Disclaimer

This template and guide are provided for general information only and do not constitute legal advice. California home improvement contract law changes over time. Confirm current requirements with the Contractors State License Board (CSLB) before relying on this document.