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CSLB LAW & BUSINESS SET 1 EXAM WITH QUESTIONS AND ANSWERS
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CSLB LAW & BUSINESS SET 1 EXAM WITH QUESTIONS AND ANSWERS
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CSLB LAW & BUSINESS SET 1 EXAM WITH QUESTIONS AND ANSWERS_____, although usually the largest single item in a bid, can be fairly accurately determined. - -MATERIAL
-A balance sheet shows: - -assets and liabilities at a certain point in time
-A Cal/OSHA permit is required for trenches that are _____ or more in depth. - -5 FEET OR DEEPER
-A consumer may cancel a home solicitation contract at any time prior to midnight of the _____ after
the date of the transaction. - -3RD BUSINESS DAY
-A contract can be canceled when there is consent through fraud or duress by: - -THE OTHER PARTY
-A contract for the construction of a single-family dwelling must be signed by: - -the owner and
contractor
-A contract for the construction of a single-family dwelling must be signed by: - -the owner and
contractor
-A contractor and a homeowner sign a home solicitation contract. If the owner lawfully cancels the
contract, how long does the contractor have to pick up unused materials that were delivered to the
owner's property? - -C. If you receive a notice of cancellation, the materials should be picked up as soon
as possible. After 20 days the materials become the property of the owner. You must return the down
payment within ten-days.
-A contractor bids on a home improvement project and earns the bid. Later, he decides not to take the
job. Which bond would protect the home owner? - -BID BOND
-A contractor buys a construction firm from a person who is retiring. There is an existing collective
bargaining agreement with a successor clause that is good for three years. As the new owner, is the
contractor bound by the collective bargaining agreement? - -Yes. A successor clause in a collective
bargaining agreement is binding on a successor for up to three years.
D. Collective bargaining agreements often include clauses extending their terms to successors (e.g., a
person who buys the business after the collective bargaining agreement is signed by the original owner).
However, the Labor Code limits successor clauses to three years.
-A contractor entered into a home improvement contract for more than $500 with Mrs. Swenson to
remodel her kitchen and bathroom. The contract calls for a down payment before work is to begin.
According to the Business and Professions Code, how much may the contractor accept from Mrs.
Swenson as down payment for the work? - -The down payment is limited to $1000 or 10% of the total
price, whichever is less.
-A contractor finds a 6" discrepancy on a set of plans. The contractor should? - -contact the architect or
the building designer
D. The contractor should first contact the person who prepared the plans. The architect or building
designer would be the person who created the plans.
,-A contractor has had a problem with employees stealing tools and equipment from job sites. When
conducting job interviews, may the contractor ask prospective employees about their arrest records?
Click here to select answer A.
It is legal to ask prospective employees about arrests not leading to convictions.
Click here to select answer B.
It is not legal to ask prospective employees about arrests not leading to convictions.
Click here to select answer C.
It is legal for a private employer to ask about arrests not leading to convictions, but it would not be legal
for city or county agencies to ask about such arrests.
Click here to select answer D.
It is legal for a private employer to ask about arrests leading to convictions, but it would not be legal for
a federal, state, or local public agency to do so. - -It is not legal to ask prospective employees about
arrests not leading to convictions.
B. California law generally prohibits asking a job applicant or an employee about an arrest that did not
lead to a conviction or about a pretrial or post-trial diversion program. This law is found in Labor Code
Section 432.7.
-A contractor hires a subcontractor to demolish a concrete wall. Who is responsible for supplying safety
goggles? - -SUBCONTRACTOR
-A contractor is looking for an insurance policy to cover a high degree of exposure to risk. Of the
following, which policy would be best for this purpose?
Click here to select answer A.
property
Click here to select answer B.
general liability
Click here to select answer C.
builder's risk
Click here to select answer D.
umbrella - -D. Commercial umbrella insurance provides an extra layer of liability protection by covering
costs that go beyond your other liability coverage limits. In other words, commercial umbrella insurance
complements your other liability coverage by taking over when your other liability coverage limits have
been reached.
,-A contractor is offering a job that will last at least six months but could continue longer. What should
the contractor tell people when interviewing for the job? - -The job is temporary.
A. The Employer's Legal Handbook states: "During the hiring process, don't give assurances that you may
not be able to honor and that may give the applicant a false sense of security."
-A contractor keeps change orders on file: - -by law
-A contractor meets Mr. Jones at his home to discuss remodeling. The contractor and Mr. Jones sign a
contract that includes a three-day cancellation form. After the contractor leaves, Mr. Jones decides not
to have the work done. Instead of using the cancellation form, Mr. Jones sends the contractor a letter by
first-class mail stating that he is canceling the contract. Is Mr. Jones' cancellation effective?
Click here to select answer A.
No. Mr. Jones did not return the contract with the letter.
Click here to select answer B.
No. Mr. Jones did not sign and return the cancellation form.
Click here to select answer C.
Yes. Mr. Jones' letter does cancel the contract because it indicates his intention not to be bound by the
contract.
Click here to select answer D.
No. However, the letter would have canceled the contract had it been sent by certified or registered
mail. - -Yes. Mr. Jones' letter does cancel the contract because it indicates his intention not to be bound
by the contract.
-A contractor sued the owner for refusing to make final payment after the job was completed. The
owner was demanding changes. Of the following, which is the BEST way for the contractor to avoid a
lawsuit? - -The contractor should have walked the job with the owner and had the owner sign a job
completion form.
B. Asking workers to testify would not prevent a lawsuit. The CSLB recommends: "Frequent punch lists
are a good idea. A walk-through near the end of the job to determine the items that are left to be
completed is recommended. "It is a good idea for the contractor to obtain the owner's signature on the
final punch list (job completion form).
-A contractor usually will not be held liable for a supplier going on strike, but if your supplier did go on
strike what should you do? - -Contact the owner immediately.
-A contractor's California personal income tax return should be sent to which office? - -Franchise Tax
Board
A. A contractor's personal income tax return, Form 540, is sent directly to the Franchise Tax Board.
, -A customer wants to accept a bid but does not have enough money. A wise contract decision would be
to: - -stick close to your bid even if it means losing the job
-A general contractor has obtained bids from several subcontractors for a private project. He notices
that one bid is substantially lower than the rest. Is it ethical and a good business practice for this
contractor to inform the subcontractor that the bid is substantially lower than the bids of the other
subcontractors? - -Yes. If the contractor has reason to believe that the subcontractor has made an error
in preparing his bid, the contractor should notify the subcontractor of the apparent error, but the
contractor may not disclose the amounts of the other bids.
-A health and safety order must be:
handed out by supervisors at their quarterly meetings
handed out with monthly pay checks
posted in a conspicuous place at the job site
posted in an administrative office that is available to employees - -posted in a conspicuous place at the
job site
-A health and safety order must be: - -posted in a conspicuous place at the job site
-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?
An unconditional release for $9,000 paid and a conditional release for the $1,000 check.
A conditional release for $9,000 paid and a conditional release on receipt of $1,000 check.
A conditional release for $9,000 paid and an unconditional release prior to receipt of $1,000 check.
A unconditional release for the $9,000 paid and an unconditional release for the final payment of
$1,000. - -A unconditional release for the $9,000 paid and an unconditional release for the final payment
of $1,000.
D. An Unconditional Waiver and Release form for a progress of a final 1 payment should only be used if
checks have been paid by the bank, as is the case with this question. A Conditional Release form should
be used if a check has been received but not cleared by the bank. Be sure to use the statutory forms
listed on the CSLB's website.
-A licensed contractor contracts with a building owner to do a $900 improvement. When applying for a
building permit, the contractor checks the owner-builder box on the declaration form. Which of the
following statements is correct?
The contractor may check the box to avoid insurance charges.
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