If a contract provides for a retention of 5% of a $135,000 total job price, how much may the owner withhold?

If a contract provides for a retention of 5% of a $135,000 total job price, how much may the owner withhold?

• A. $6,750
• B. $6,000
• C. $6,900
• D. $7,500

Answer: (A)

Retention is the portion of the contract price held back by the owner as security that the work will be completed properly. When the contract specifies 5% retention, you apply that percentage to the total job price to find the amount that can be withheld. For a $135,000 job, 5% is 0.05 × 135,000 = 6,750. So the owner may withhold 6,750 under this clause. (Retention is typically released later, after completion and meeting any required conditions, but the amount currently withheld is determined by the percentage applied to the total price.)

Retention is the portion of the contract price held back by the owner as security that the work will be completed properly. When the contract specifies 5% retention, you apply that percentage to the total job price to find the amount that can be withheld. For a $135,000 job, 5% is 0.05 × 135,000 = 6,750. So the owner may withhold 6,750 under this clause. (Retention is typically released later, after completion and meeting any required conditions, but the amount currently withheld is determined by the percentage applied to the total price.)