CONTRACTORS LICENSE

1. Which of the following is not exempt from the requirements of the Contractors License Law?

a. a government agency

b. a material supplier who does not install the materials

c. a person working on his/her own property when it is not for the purpose of resale

d. a firm that installs, maintains, or monitors fire alarm systems

2. A contractor's license is not required for a project in which the total price for all labor and materials is less than:

a. $200

b. $300

c. $500

d. $1,000

3. Which of the following individuals will be required to pass the qualifying examination in order to obtain a contractor's license?

a. a person who has been listed as a partner on an active license for the past four years and has been actively engaged in that business's construction operations

b. a person who was the Responsible Managing Employee for another license three years ago

c. a person who passed the qualifying examination two years ago, but did not ever receive a license

d. a person who currently is the qualifier on a license who is applying for a new license as a Responsible Managing Employee

4. Which of the following statements is true with regard to a Responsible Managing Employee?

a. An RME may have his/her own active individual license while he/she qualifies for another active license.

b. An RME may qualify for up to there separate licenses.

c. An RME must own at least 10% of each business for which he/she serves as the qualifying individual.

d. An RME must have a separate bond issued to accompany the licensee's bond.

5. A group of four persons obtains a contractor's license as a partnership. After five years one of these partners, who did not serve as the qualifying individual for the license, disassociates from the partnership. In this situation, which of the following statements is not correct?

a. The remaining partners may apply for a continuation of the license within 90 days in order to complete any existing contracts.

b. The remaining partners may continue to conduct business using the same license since the qualifying individual is still involved with the business.

c. The remaining partners may file a new application to obtain a new partnership license.

d. The partner who disassociated from the license may obtain his/her own individual license without passing the examination.

6. An individual may qualify for as many as three separate licenses provided that he/she owns at least ---- of the equity of each business for which he/she serves as the qualifying individual.

a. 10%

b. 20%

c. 33%

d. 50%

7. If a license is not renewed within ---- following its expiration date, the license will be considered void and cannot be reinstated in any way.

a. 90 days

b. two years

c. three years

d. five years

8. What must a license do if the qualifying individual disassociates from the business?

a. surrender the license immediately

b. surrender the license within one year following the disassociation

c. take and pass the qualifying examination within 90 days

d. notify the Registrar and replace the qualifier within 90 days

9. Which of the following is required by law to be included in all advertising placed by a contractor?

a. address and telephone number

b. contractor's license number

c. name of the qualifying individual

d. all of the above

10. Which of the following statements is not true regarding the contractor's bond?

a. A contractor cannot legally refer to any required bond in his/her advertising.

b. A bond must remain in full force and effect in order to maintain an active license.

c. Any claims against such a bond must be filed within two years following the expiration date of the license period for which the bond was provided.

d. A license corporation is required to obtain two separate bonds for the corporation and its qualifying individual.

CHAPTER #2
Question #1

1. The Contract Notice must be included in:

a. all prime contracts only

b. all subcontracts only

c. all prime contracts and subcontracts

d. all contracts which involve a construction lender

Chapter Two
Question #2

2. A licensed contractor enters into a verbal agreement with a customer for home improvement work. The total price for this project is $450.00. After reviewing this agreement, the contractor decides that he/she does not want to do the work at this price. Which of the following statements is true in this situation?

a. The contractor is allowed to cancel the contract within three business days.

b. The contractor is allowed to cancel the contract because a verbal home improvement contract is not legal and binding.

c. The contractor is not allowed to cancel the contract, but he/she is allowed to change its price.

d. The contractor is not allowed to cancel or change this contract without the consent of the customer.

Chapter Two
Question #3

3. In a non-emergency situation, a contractor must give a customer at least ---- to cancel a home solicitation contract.

a. 48 hours

b. three business days

c. five business days

d. one week

Chapter Two
Question #4

4. Which of the following is not required in a home improvement contract in which the total price exceeds %500.00?

a. a description of the work to be done, the materials to be installed, and the total cost of all labor and materials to be provided.

b.a notice stating that the contractor must begin work within 10 days following the scheduled start date or be in violation of the law.

c. a statement that the owner has the right to require the contractor to post a performance and payment bond.

d. the approximate beginning and completion dates of the project.

Chapter Two
Question #5

Which of the following is the least effective way to guard against problems when negotiating a construction contract?

a. Do not anticipate problems, but instead write up a change order later for any necessary adjustments to the contract.

b. Communicate frequently with the owner to determine what exactly is to be done and to insure that the owner understands the contract.

c. Document all contracts and change orders in writing, and have all parties sign these agreements.

d. Recheck the terms of the contract with owner before it is signed.

Chapter Two
Question #6

Which of the following is not recommended when executing a change order?

a. Document the change in writing and have it signed by the owner.

b. Document the price of the change as well as the amended total price of the contract.

c. Bill the customer for the price of the change immediately upon completion of the contract.

d. Make the owner aware of any extra delays or problems which will be brought about by the change.

Chapter Two
Question #7

What is usually the least expensive method of dispute resolution?

a. small claims court

b. lawsuit

c. arbitration

d. settlement

Chapter Two
Question #8

Which of the following statements about the filing of a mechanic's lien is not correct?

a. A mechanic's lien can only be filed against private property, and cannot be filed on a public works project.

b. A mechanic's lien serves to attach the owner's construction funds.

c. Normally, a mechanic's lien cannot be filed more than 90 days following completion of the contract.,

d. A lawsuit to perfect a mechanic's lien must be filed within 90 days following the filing of the lien.

Chapter Two
Question #9

Which of the following is not required to give a Preliminary Notice?

a. a prime contractor on a public works project.

b. a prime contractor on a private job that is not funded by a construction loan.

c. a subcontractor whose contract price is less than $1,000.00.

d. A stop notice requires the construction lender or awarding authority to withhold the disputed amount from the construction funds.

Chapter Two
Question #10

Which of the following statements is not true regarding a stop notice?

a. A stop notice serves as a lien on the funds of a construction project.

b. A stop notice must be filed with the county recorder's office in order to be valid.

c. A stop notice is to be given to the construction lender or awarding authority.

d. A stop notice requires the construction lender or awarding authority to withhold the disputed amount from the construction funds.