now invite your neighbors in to see the professional work that contractor did for you. then find out how in the world they were ever licensed in the first place.
i never heard of a deposit of more than 1/3 down. then 1/3 in the middle of the job and the last 1/3 at the end when the customer is satisfied that the details have been finished up. my husband is an architect and that's the way it's always done here.
by needing to make a middle payment it gives you that start-up time to see what's happening and cut out if the job isn't moving along as it should. it also gives the company a chance to dump you if you're a pain in the butt. the job can be terminated right there if anyone's not happy. it also gives the company impetus to get going to get paid.
you only lose 1/3 and they only lose time, which represents money. that first 1/3 of $$$ was supposed to pre-pay for the materials needed for the job. i don't know who owns that stuff in that case.