CONTRACTORS LICENSE LAW TEST PAPER
2026 FULL SOLUTION SET
◉ Do sales tax costs need to be included in the bid estimate?
Answer: Yes
◉ If the subs bid is too low, should you let him know? Answer: Yes, it
is ethical and good practice to call the sub and inform him when the
bid is too high or low.
◉ Should you build against code if the customer insists? Answer: No.
It is illegal to build against code.
◉ Should you bid against other companies or against the job?
Answer: Always bid against the job. Doing otherwise will cause you
troubles in paying subs, materials, and equipment needed.
◉ Should you take your time and double check everything before
leaving a quote or just get it done quickly? Answer: Take your time
and be critical, ensure you understand all aspects of the plan, walk
the job and double check the bid estimate.
◉ An agreement with specific terms between two or more people
for performance and compensation. Answer: Contract
,◉ A contract is not enforceable unless it has ___ signatures? Answer:
2. The customer and the contractor.
◉ What is the standard contract used by customers and contractors?
Answer: Home Improvement Contract. It establishes and agreement
between the customer and the contractor for the work being done.
◉ What is the required down payment for a contract? Answer: 10%
or $1000. Whichever is less.
◉ Time given to the customer to cancel the contract? Answer:
midnight of the 3rd business day.
◉ Time given to the contractor to return all money given by the
customer back to him/her. Answer: 10 days, beginning on the day he
or she cancels the contract.
◉ days given to the customer to make all materials left on the
property available for pick up. Answer: 20 days
◉ The contractor has this many days from the declared start date, to
start the job before breaching the contract. Answer: 20 days
, ◉ Contracts should always be in writing, but they must be in writing
if the job costs more than ___. Answer: $500
◉ A lien placed upon the property that received construction. It is
filed by the contractor and is used if the contractor does not receive
payment for their work and properly filed a Preliminary Notice.
Answer: Mechanic's Lien
◉ How is a Stop Payment Notice similar to a Mechanic's Lien?
Answer: the lien is placed on the funds and not the property. It is still
used to get payment for work the contractor did.
◉ Can you record a Mechanic's Lien and a Stop Payment Notice on
private work? Answer: Yes
◉ Can you record a Mechanic's Lien and a Stop Payment on public
work? Answer: No. A Mechanic's Lien is limited to private work.
◉ What must be filed to keep the right to a Mechanic's Lien? How
many days do you have to file it? Answer: A Preliminary Notice Form
must be filed within 20 days of signing the contract. Subcontractors,
suppliers and anyone else who is going to participate in the job must
also file a Preliminary Notice if they want to keep their right.
2026 FULL SOLUTION SET
◉ Do sales tax costs need to be included in the bid estimate?
Answer: Yes
◉ If the subs bid is too low, should you let him know? Answer: Yes, it
is ethical and good practice to call the sub and inform him when the
bid is too high or low.
◉ Should you build against code if the customer insists? Answer: No.
It is illegal to build against code.
◉ Should you bid against other companies or against the job?
Answer: Always bid against the job. Doing otherwise will cause you
troubles in paying subs, materials, and equipment needed.
◉ Should you take your time and double check everything before
leaving a quote or just get it done quickly? Answer: Take your time
and be critical, ensure you understand all aspects of the plan, walk
the job and double check the bid estimate.
◉ An agreement with specific terms between two or more people
for performance and compensation. Answer: Contract
,◉ A contract is not enforceable unless it has ___ signatures? Answer:
2. The customer and the contractor.
◉ What is the standard contract used by customers and contractors?
Answer: Home Improvement Contract. It establishes and agreement
between the customer and the contractor for the work being done.
◉ What is the required down payment for a contract? Answer: 10%
or $1000. Whichever is less.
◉ Time given to the customer to cancel the contract? Answer:
midnight of the 3rd business day.
◉ Time given to the contractor to return all money given by the
customer back to him/her. Answer: 10 days, beginning on the day he
or she cancels the contract.
◉ days given to the customer to make all materials left on the
property available for pick up. Answer: 20 days
◉ The contractor has this many days from the declared start date, to
start the job before breaching the contract. Answer: 20 days
, ◉ Contracts should always be in writing, but they must be in writing
if the job costs more than ___. Answer: $500
◉ A lien placed upon the property that received construction. It is
filed by the contractor and is used if the contractor does not receive
payment for their work and properly filed a Preliminary Notice.
Answer: Mechanic's Lien
◉ How is a Stop Payment Notice similar to a Mechanic's Lien?
Answer: the lien is placed on the funds and not the property. It is still
used to get payment for work the contractor did.
◉ Can you record a Mechanic's Lien and a Stop Payment Notice on
private work? Answer: Yes
◉ Can you record a Mechanic's Lien and a Stop Payment on public
work? Answer: No. A Mechanic's Lien is limited to private work.
◉ What must be filed to keep the right to a Mechanic's Lien? How
many days do you have to file it? Answer: A Preliminary Notice Form
must be filed within 20 days of signing the contract. Subcontractors,
suppliers and anyone else who is going to participate in the job must
also file a Preliminary Notice if they want to keep their right.
