Contractor licence exam practice set

Eight law-and-business questions. Every one turns on a principle rather than a state-specific deadline or dollar figure — those you learn from your own board’s handbook, not from a national practice set.

0 correct of 0 answered · 8 in the set

1. § 1 · Licensing law

   You hold a general building licence. A homeowner asks you to contract for a stand-alone re-roof, with no other trade involved. What is the licensing position?

   • The general licence covers it, because roofing is a building trade
   • It is specialty work; a general building licence is defined around projects involving two or more unrelated trades
   • It depends on the value of the job
   • You may take it if you subcontract the roofing to a licensed roofer
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2. § 2 · Liens

   A subcontractor wants to preserve lien rights on a private project. What is the first step in almost every state that requires one?

   • File the lien as soon as the first invoice goes unpaid
   • Serve a preliminary notice early in the work, before any default
   • Send a demand letter to the owner
   • Record a notice of completion
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3. § 3 · Employment

   You engage a crew as independent contractors. A state auditor reclassifies them as employees. What follows first?

   • Nothing, provided they signed independent contractor agreements
   • Payroll tax and workers' compensation obligations attach retrospectively
   • The reclassification only applies going forward
   • Your general liability policy covers the shortfall
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4. § 4 · Contracts

   A residential customer signs your contract and then cancels within the statutory cooling-off period. What is the effect?

   • The cancellation is invalid once work has been ordered
   • The customer may cancel; a contract lacking the required cancellation notice usually extends the period rather than removing it
   • You may retain the deposit as liquidated damages
   • Cancellation rights only apply to door-to-door sales
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5. § 5 · Records

   Your workers' compensation audit finds you paid a subcontractor with no certificate of insurance on file. What is the usual consequence?

   • A fine from the state
   • Nothing, because the sub is a separate business
   • The amount paid is treated as your payroll and premium is charged on it at the applicable class rate
   • The policy is cancelled
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6. § 6 · Licensing law

   Your licence expired three weeks ago and you signed a contract last week. What is the position on that contract?

   • It is valid; the lapse is an administrative matter
   • It is valid provided you renew before completing the work
   • In a board state, work contracted while unlicensed can reach your ability to enforce the contract and be paid
   • The customer may cancel but you keep your right to payment
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7. § 7 · Contracts

   A general contractor's subcontract requires your policy to be 'primary and non-contributory'. What does that mean?

   • Your policy has the highest limits on the project
   • Your policy responds first and does not share the loss with the GC's policy
   • The GC is named on your policy
   • Your insurer waives its right to recover from the GC
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8. § 8 · Employment

   Your payroll records do not split hours by class code. How will the workers' compensation carrier rate the payroll?

   • Evenly across the class codes on the policy
   • At an average of the rates on the policy
   • At the highest applicable class rate, across all of it
   • It will estimate the split from your job descriptions
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