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(c51) Law and Business Practice Test > Test 5 > Flashcards

Test 5 Flashcards

1
Q

On public works, the total retention withheld may not exceed _______ of the contract price.

A. 5%

B. 10%

C. 15%

D. 25%

A

A. 5%

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2
Q

A licensed general contractor enters into a contract with an unlicensed subcontractor. Who is in violation of the law if the work performed requires a contractor’s license?

A. the general contractor

B. both the general contractor and the subcontractor

C. only the subcontractor if the general was not informed that he or she was unlicensed

D. neither the general contractor nor the subcontractor

A

B. both the general contractor and the subcontractor

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3
Q

A subcontractor signs an Unconditional Waiver and Release upon final payment. This means that the:

A. subcontractor can request additional payment only from the owner.

B. owner may not ask the subcontractor to correct any defects in materials or workmanship.

C. subcontractor may receive additional payment only from the prime contractor.

D. subcontractor has waived any lien, stop payment notice, or payment bond rights.

A

D. subcontractor has waived any lien, stop payment notice, or payment bond rights.

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4
Q

If the plans and specifications for a job are vague or lack details, contractors should.

A. reject the job.

B. take the job and try their best to interpret the plans and specifications.

C. consult an independent architect or engineer.

D. review the plans and specifications with the owner.

A

D. review the plans and specifications with the owner.

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5
Q

If your subcontractor orders materials that do not arrive when due, which of the following would not be considered a valid excuse?

A. Delay by supplier because of high seasonal demand.

B. Truck breaks down.

C. Architect’s neglect.

D. Bad weather.

A

C. Architect’s neglect

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6
Q

You would go to a District Court:

A. for a case involving federal law.

B. when constitutional issues are involved.

C. for an interstate dispute.

D. all of the above.

A

D. all of the above.

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7
Q

If an employee violates a safety rule and causes injury to another employee, who is legally responsible?

A. The employee who violated the safety rule.

B. The employee who violated the safety rule and the employer.

C. The employer.

D. None of the above.

A

C. The employer.

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8
Q

On a large job, which of the following would be the best scheduling method?

A. bar chart scheduling

B. critical path method (CPI)

C. calendar scheduling

D. punch list

A

B. critical path method (CPI)

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9
Q

Truth in Lending Act rescission rights apply when:

A. any loan is signed for any home improvement work.

B. the dollar amount of the contract exceeds $20,000.

C. a home improvement salesperson procured the contract.

D. a non-purchase lien or security interest is taken in the consumer’s principal dwelling.

A

D. a non-purchase lien or security interest is taken in the consumer’s principal dwelling.

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10
Q

Which of the following statements about advertising is correct?

A. All advertisements must include the contractor’s name, address, and telephone number.

B. The address of the CSLB must be on all advertising.

C. A contractor must have a license number to advertise.

D. A contractor’s license number must be on all forms of advertising.

A

D. A contractor’s license number must be on all forms of advertising.

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11
Q

What is the maximum penalty for contracting with an inactive, suspended or expired license?

A. revocation of license

B. one-year license suspension

C. fine and license suspension for up to one year

D. suspension of license for five days or more

A

A. revocation of license

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12
Q

When preparing a cost estimate, which of the following could not be determined without visiting the site?

A. location of the electrical source

B. measurements of the walls and ceiling

C. what materials are needed

D. which subcontractors to use for the job

A

A. location of the electrical source

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13
Q

A licensed contractor wants to do construction projects with an unlicensed individual Of the following, which is a legal alternative?

A. They may be partners if the licensed contractor signs all of the contracts.

B. They may form a corporation and obtain a corporate license.

C. They may obtain a joint venture license.

D. The licensed contractor may subcontract work to the unlicensed individual.

A

B. They may form a corporation and obtain a corporate license.

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14
Q

Which building code should a contractor follow?

A. the most stringent code

B. national code

C. state code

D. local code

A

D. local code

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15
Q

What will happen if a contractor who is awarded the bid on a public works project pays less than the prevailing wage?

A. CSLB will permanently revoke the contractor’s license.

B. CSLB will require arbitration.

C. The contractor will be required to lower the bid within 24 hours.

D. The contractor will be required to pay back-wages to the employees.

A

D. The contractor will be required to pay back-wages to the employees.

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16
Q

The purpose of a specification sheet attached to a set of plans is to:

A. show alternative plan views.

B. provide details that are not on the plans.

C. list work assignments.

D. list specific dates of completion.

A

B. provide details that are not on the plans.

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17
Q

Who is ultimately responsible for seeing that safety equipment is actually put to use on the jobsite?

A. foreperson

B. lead worker

C. contractor

D. a specially designated employee

A

C. contractor

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18
Q

A contract can be canceled when there is consent through fraud or duress by:

A. the other party.

B. the homeowner only.

C. the contractor only.

D. a government agency.

A

A. the other party.

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19
Q

Of the following, who is required to be registered as a home improvement salesperson?

A. Salesperson working at a fixed location in a shopping mall.

B. Salesperson who is soliciting business by calling potential customers on the telephone.

C. Salesperson working at the contractor’s office or showroom.

D. Salesperson who is an officer or general partner of a licensed construction business.

A

B. Salesperson who is soliciting business by calling potential customers on the telephone.

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20
Q

Which act establishes the rights of workers to organize into unions and negotiate contracts?

A. Civil Rights Act of 1964

B. Civil Rights Act of 1972

C. Civil Rights Act of 1984

D. Wagner Act of 1935

A

D. Wagner Act of 1935

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21
Q

For which of the following projects would you need a building permit?

A. Projects valued over $1000.

B. When a permit is required by the local building department.

C. Only for a public works project.

D. A building permit is required for all projects.

A

B. When a permit is required by the local building department.

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22
Q

A homeowner enters into a $10,000 home improvement contract with a contractor that includes a $1,000 retention. The homeowner has already made progress payments totaling $9,000, and gives the contractor a final check for $1,000 that was paid by the bank. Which of the following statements about releases is correct?

A. An unconditional release for $9,000 paid and a conditional release for the $1,000 check.

B. A conditional release for $9,000 paid and a conditional release on receipt of $1,000 check.

C. A conditional release for $9,000 paid and an unconditional release prior to receipt of $1,000
check.

D. A unconditional release for the $9,000 paid and an unconditional release for the final payment of $1,000.

A

D. A unconditional release for the $9,000 paid and an unconditional release for the final payment of $1,000.

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23
Q

Which of the following are the most effective when used together on a private works project?

A. stop payment notice and mechanics lien

B. notice of cessation and mechanics lien

C. preliminary notice and stop payment notice

D. notice of non-responsibility and mechanics lien

A

A. stop payment notice and mechanics lien

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24
Q

What sort of notes are you looking for when you get a set of as-built plans?

A. abbreviations

B. changes

C. subdivisions

D. engineering

A

B. changes

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25
Q

How must a client submit a claim for service or repair of a defect on fit and finish items after a remodel?

A. by certified mail

B. by overnight mail

C. by personal delivery

D. any of the above

A

D. any of the above

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26
Q

A Notice of Completion must be recorded within:

A. 15 days after work is completed.

B. 20 days after work has ceased.

C. 30 days after work is completed.

D. 60 days after work has ceased.

A

A. 15 days after work is completed

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27
Q

When can a material supplier perfect a mechanics lien?

A. After the prime contractor accepts the material supplier’s bid.

B. After the goods have been installed in the structure.

C. After the goods have been delivered to the job site.

D. A material supplier is not entitled to a lien.

A

B. After the goods have been installed in the structure.

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28
Q

How many days does a claimant have to record a Lis Pendens after filing a mechanics lien foreclosure lawsuit?

A. 10 days

B. 15 days

C. 20 days

D. 60 days

A

C. 20 days

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29
Q

When bidding on work, which of the following would you not include in the
price of your bid?

A. overhead

B. workers’ compensation insurance premium

C. profit

D. all of the above

A

B. workers’ compensation insurance premium

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30
Q

An owner should request waivers of lien rights for work on residential property after paying the full contract amount:

A. only if a lender is involved.

B. to activate the home warranty.

C. so the prime contractor will not file a lien.

D. so the prime contractor, subcontractors, and other claimants will not file liens.

A

D. so the prime contractor, subcontractors, and other claimants will not file liens.

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31
Q

If a worker’s wages are garnished and the labor contract provides less protection than the State’s guidelines, what does the law require?

A. The worker must follow the terms of the labor contract.

B. It depends on whether the employer has more than 20 employees.

C. The entire labor contract is void because it offers less protection than State guidelines.

D. The section of the contract providing less protection is void.

A

D. The section of the contract providing less protection is void.

32
Q

If it is discovered that the construction materials in an area contain more than 0.1% asbestos:

A. the crew should try not to disturb the area but keep working.

B. the contractor should contact DOSH immediately.

C. the workers should stop and remove the materials wearing masks and gloves.

D. the crew should wet down the area with water and continue working.

A

B. the contractor should contact DOSH immediately.

33
Q

Which of the following provisions may not be included in a home improvement contract?

A. Owner must pay for materials after they are delivered.

B. Owner must pay for materials before they are delivered.

C. The contractor may require a downpayment.

D. Owner may make progress payments.

A

B. Owner must pay for materials before they are delivered.

34
Q

A contractor sues an owner for refusing to make final payment after the job was completed. The owner is demanding changes. Of the following, which is the best way for the contractor to avoid a lawsuit?

A. The contractor could have asked the workers to testify.

B. The contractor could have walked the job with the owner and had the owner sign a job completion form.

C. The contractor could have just walked the job with the owner.

D. All of the above.

A

B. The contractor could have walked the job with the owner and had the owner sign a job completion form.

35
Q

An employer accrues $2,400 in federal withholding, Social Security, and Medicare taxes during a quarter. Which of the following statements about payment of the tax liability is correct?

A. The taxes may be reported and paid quarterly based on a calendar year.

B. The taxes must be deposited monthly.

C. The taxes must be reported and paid quarterly based on a fiscal year.

D. The taxes must be deposited semiweekly.

A

A. The taxes may be reported and paid quarterly based on a calendar year.

36
Q

Which of the following statements about a registered home improvement m salesperson (HIS) is incorrect?

A. An HIS may represent multiple employers.

B. Employers must notify the CSLB in writing before hiring an HIS and when employment ends.

C. An HIS registration expires four years from the last day of the month in which it was issued.

D. An HIS must be at least 18 years old, and there are no education, residency, or experience requirements.

A

C. An HIS registration expires four years from the last day of the month in which it was issued.

37
Q

If an employee suffers an injury on the job that requires only first aid, an insured contractor.

A. must file a complete report of the injury with the workers’compensation insurer.

B. is not required to file a report.

C. must file complete reports of the injury with DSLR and the workers compensation insurer.

D. must report the injury to DOSH by telephone.

A

B. is not required to file a report.

38
Q

According to State law, what should an employer do if an employee is using defective machinery?

A. Correct the safety violation immediately.

B. First report the safety violation to Cal/OSHA.

C. First report the problem to the prime contractor or awarding authority.

D. Ask for a consultation with a safety engineer.

A

A. Correct the safety violation immediately.

39
Q

If a subcontractor wants to substitute material on a job, who must approve the substitution?

A. building inspector

B. prime contractor

C. owner

D. architect

A

C. owner

40
Q

Which two types of loans is a contractor most likely to engage in?

A. construction or permanent

B. bank or savings & loan (“S&L”)

C. government or private

D. fixed or variable

A

A. construction or permanent

41
Q

There is a near-miss safety situation on a job. What steps should the employer take?

A. Report the near-miss to DOSH.

B. Report the near-miss to the workers’ compensation insurance carrier.

C. The unsafe situation must be investigated, and the investigation must include a written report.

D. The unsafe situation must be investigated, but a written report is not required.

A

C. The unsafe situation must be investigated, and the investigation must include a written report.

42
Q

What is the net profit if you have $300,000 in sales, $95,000 in labor, $35,000 in miscellaneous expenses, $55,000 in materials, $25,000 in depreciation, and a $35,000 loan to the owner?

A. $40,000

B. $90,000

C. $100,000

D. $150,000

A

B. $90,000

43
Q

Following the completion of a home improvement project of a major phase of construction and upon payment, who is responsible for signing a labor lien release?

A. homeowner

B. contractor

C. each worker

D. subcontractor

A

C. each worker

44
Q

Where is truck insurance listed on an income statement?

A. depreciation

B. liabilities

C. operating expenses

D. owner expenses

A

C. operating expenses

45
Q

On a private works project, the owner failed to make a payment by the due date specified in the contract and is not disputing the work performed. Which of the following is a correct statement?

A. The prime contractor may serve the owner with a stop work order stating that work will stop if payment is not made within five days from the due date specified in the contract.

B. The prime contractor may serve the owner with a stop work order stating that work will stop if payment is not made within ten days from the date of service of the order.

C. The prime contractor must stop working on the date of service of a stop work order.

D. The prime contractor must complete the project even if the owner stops making payments.

A

B. The prime contractor may serve the owner with a stop work order stating that work will stop if payment is not made within ten days from the date of service of the order.

46
Q

When should ear protection be worn?

A. 50 dB

B. 90 dB

C. 100 dB

D. over 140 dB

A

B. 90 dB

47
Q

Which of the following components of a bid would be considered non-productive?

A. equipment purchased for job

B. surface preparation for painting

C. equipment rental

D. travel time

A

D. travel time

48
Q

If the “ARBITRATION OF DISPUTES” clause is not included and initialed by both parties in a home improvement contract, arbitration may not be enforced against any person other than the:

A. licensee.

B. homeowner.

C. subcontractors.

D. material suppliers.

A

A. licensee

49
Q

A homeowner has not been paying the contractor, and all work has stopped for 60 days. What is the contractor’s next step?

A. Wait for the homeowner to record a Notice of Cessation or Completion.

B. Send the homeowner a Notice of Mechanics Lien form with an unfiled copy of the lien claim.

C. Continue working if the project is not complete.

D. File a lawsuit to foreclose on the lien.

A

B. Send the homeowner a Notice of Mechanics Lien form with an unfiled copy of the lien claim

50
Q

When does it make the most sense for a contractor to finance a job?

A. When the contractor will not get the job otherwise.

B. When the owner will go to a competitor otherwise.

C. When it is an emergency situation, and the owner cannot get the money soon enough.

D. When the owner has previous bankruptcies and cannot get credit.

A

C. When it is an emergency situation, and the owner cannot get the money soon enough.

51
Q

When is eye protection required?

A. When using a pneumatic hammer.

B. When nailing overhead.

C. When supervisor says it is.

D. When the employer thinks there is a risk of eye injuries.

A

D. When the employer thinks there is a risk of eye injuries.

52
Q

A new contractor who has not established a credit account with a supplier can expect to pay for delivered materials:

A. 30 to 60 days after delivery.

B. C.O.D.

C. before delivery.

D. after the materials are installed.

A

C. before delivery.

53
Q

A general contractor is hiring an electrician to install receptacles. The general contractor has never worked with this particular electrician before. What should the general contractor do?

A. Hire the electrician right away based on his assurance that he is able to do good work.

B. Watch the electrician install a receptacle.

C. Have the building inspector watch the electrician install a receptacle.

D. Have the ohmmeter turned off.

A

B. Watch the electrician install a receptacle.

54
Q

A contractor discovers the presence of hazardous material during construction and immediately notifies the homeowner and stops work. After the hazardous materials are properly abated the:

A. lender should be notified.

B. building inspector should be notified.

C. contractor should be notified by the homeowner in writing.

D. Environmental Protection Agency should be notified by the contractor.

A

C. contractor should be notified by the homeowner in writing.

55
Q

The Registrar may waive the examination requirement for a contractor’s license if:

A. the applicant is the qualifier for a license in the same trade classification.

B. the applicant has a college degree in business, construction management, or engineering.

C. the applicant has passed the law and business and trade examinations for the same classification within the past 10 years.

D. All of the above.

A

A. the applicant is the qualifier for a license in the same trade classification.

56
Q

When should a contractor’s licensing information be given to a homeowner for a home improvement project?

A. once the work has started

B. at the end of the project

C. when requested by the homeowner

D. before the contract is signed

A

D. before the contract is signed

57
Q

Who should review a home improvement contract with an owner before signing it?

A. lender

B. contractor

C. plan checker

D. city inspector

A

B. contractor

58
Q

The contractor’s disciplinary notice must be in all capital letters and in which of the following types?

A. 8-point roman italic type-red print or 8-point roman boldface type-black print

B. 8-point roman italic type-black print

C. 6-point roman boldface type-red print

D. 10-point roman boldface type-black print or 8-point roman boldface type-red print

A

D. 10-point roman boldface type-black print or 8-point roman boldface type-red print

59
Q

To be binding, change orders to a home improvement contract must contain which of the following?

A. date of original contract

B. signatures of both parties

C. contractor’s surety company

D. signature of the homeowner only

A

B. signatures of both parties

60
Q

The plans and specifications for a home improvement project usually describe which of the following?

A. layout sizes

B. liquidated damages

C. consent to arbitrate

D. neighborhood regulations

A

A. layout sizes

61
Q

When there is a third party lender, a contractor may enforce the home improvement contract after three business days from the:

A. salesperson turning in a signed contract.

B. contractor and buyer signing the contract.

C. buyer submitting the loan package to the lender.

D. date the loan and the contract are completed and accepted by the buyer.

A

D. date the loan and the contract are completed and accepted by the buyer.

62
Q

If a contractor includes a provision for private arbitration in a printed contract, it must be set out in at least:

A. 8-point roman boldface type or in contrasting red print in at least 8-point boldface type.

B. 8-point roman boldface type in black print.

C. 10-point italic boldface type in red print.

D. 10-point roman boldface type or in contrasting red print in at least 8-point boldface type.

A

D. 10-point roman boldface type or in contrasting red print in at least 8-point boldface type.

63
Q

A contractor is required to report a construction-related civil court judgment to the CSLB:

A. no later than 10 days from the date of the judgment.

B. within 30 days of the judgment date.

C. within 90 days of the judgment date.

D. within one year after entry of the judgment.

A

C. within 90 days of the judgment date.

64
Q

According to the federal Truth in Lending Act, when there is a third-party lender the home improvement contract is unenforceable against the buyer if the:

A. buyer rescinds the loan within 3 business days.

B. funding is provided by a government loan or grant.

C. home improvement contract is sold by a salesperson.

D. owner decides that a competing contractor will finish the remaining work for less than the amount stated in the contract.

A

A. buyer rescinds the loan within 3 business days.

65
Q

A contractor must pay a dump truck carrier for all transportation charges:

A. immediately.

B. by the 20th day following the last day of the month in which the transportation was performed.

C. within 30 days following the last day of the month in which the transportation was performed.

D. within 10 days after the transportation was performed.

A

B. by the 20th day following the last day of the month in which the transportation was performed.

66
Q

A completion date for a home improvement contract is enforceable only when it is written:

A. regardless of labor availability.

B. regardless of material availability.

C. and is reasonable to all parties to the contract.

D. without regard for conditions that might prevail.

A

C. and is reasonable to all parties to the contract.

67
Q

Prior to signing a home improvement contract, the homeowner must be informed of the:

A. contractor’s references.

B. number of subcontractors on the job.

C. contractor’s name, address, and license number.

D. amount of money the contractor has allowed for overhead.

A

C. contractor’s name, address, and license number.

68
Q

A contractor who is doing asbestos-related work that involves 100 square feet or more must register with:

A. DOSH.

B. EPA.

C. Fed/OSHA

D. Registrar of Contractors.

A

A. DOSH.

69
Q

Is Form 1099-MISC required for a corporation that provided $600 in services as an independent contractor during the calendar year?

A. Yes. Form 1099-MISC is required because the corporation is an independent contractor that was paid $500 or more.

B. No. Form 1099-MISC is not required unless an independent contractor is paid over $1,000
in a calendar year.

C. No. Form 1099-MISC is not required for corporations with certain exceptions.

D. Yes. Form 1099-MISC is required for all individuals, partnerships, and corporations that provided services as an independent contractor during the calendar year.

A

C. No. Form 1099-MISC is not required for corporations with certain exceptions

70
Q

A contractor who discovers an error after submitting a bid on a public works project should:

A. do any work not covered in the bid and bill on a time-and-materials basis.

B. request that the public entity execute a change order after the bid is accepted.

C. give the public entity written notice that the bid is withdrawn within ten working days after opening of the bids.

D. give the public entity written notice of the mistake within five working days after opening of the bids.

A

D. give the public entity written notice of the mistake within five working days after opening of the bids.

71
Q

What information must be included in a stop notice?

A. the kind of labor, services, equipment, or materials furnished or agreed to be furnished

B. the construction loan terms, interest rate, and deadline for project completion

C. the type of zoning, setback, and lot coverage limitations on the permit

D. the type of asbestos, toxic fumes, or hazardous materials found

A

A. the kind of labor, services, equipment, or materials furnished or agreed to be furnished

72
Q

An employee may be terminated for missing work due to illness after using how many hours of sick time?

A. 8 hours

B. 16 hours

C. 24 hours

D. 48 hours

A

C. 24 hours

73
Q

Warning signs at the location of asbestos work must be readable up to ____________ away.

A. 10 feet

B. 20 feet

C. 100 feet

D. 1,000 feet

A

B. 20 feet

74
Q

Contractors working on public works projects must renew their registrations with the Department of Industrial Relations (DIR) by:

A. January 1

B. March 31

C. July 1

D. before their contractor’s license expires

A

C. July 1

75
Q

A contractor is not required to register with the FIR as a public works contractor if the contract:

A. is for repairs only and does not exceed $25,000

B. does not exceed $50,000 for new construction

C. does not exceed $35,000 for alterations

D. is for maintenance only and does not exceed $20,000

A

A. is for repairs only and does not exceed $25,000

(c51) Law and Business Practice Test (5 decks)

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