CALIFORNIA CONTRACTORS LICENSE LAW AND
BUSINESS FINAL EXAM 2026 QUESTIONS AND
SOLUTIONS SCORED A+
✔✔What must be filed to keep the right to a Mechanic's Lien? How many days do you
have to file it? - ✔✔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.
✔✔Who files the Notice of Completion? How long does that person have? - ✔✔The
owner. 15 days to file it.
✔✔How many days does the contractor have to file a Mechanic's Lien? - ✔✔If the
owner does not file a Notice of Completion within 15 days, contractor has 90 days. If the
owner files within the proper time, Contractor has 60 days.
✔✔Small claims courts can only handle cases that are less than what amount? - ✔✔An
individual or small business owned by an individual can file up to 2 cases a year under
$7500. Businesses and Corporations can file up to 2 cases a year under $5000
✔✔Can you appeal a decision mad in small claims court? - ✔✔Yes.
✔✔Can you appeal a decision made in an arbitration hearing? - ✔✔No.
✔✔In addition to Mechanic's Lien and a Stop Payment Notice you may also file a ___
___ for Breach of Contract. - ✔✔Civil Suit
✔✔Whats the name of the form that notifies people there is a pending lawsuit on their
property. - ✔✔Lis Pendens
✔✔If you file a lien, but then get paid, what should you do. - ✔✔File a lien release form.
✔✔If changes are made to the job and the original job is not complete yet, what form
should be filed? - ✔✔A Contract Change Order
✔✔Who has to ensure that the subcontractors are licensed and insured? - ✔✔Direct
Contractor
✔✔How many bathrooms must be provided for every 20 employees? - ✔✔One
✔✔Are workers required to bring their own water to work? - ✔✔No. The work site is
responsible for providing clean and accessible drinking water to employees.
, ✔✔Does there need to be an emergency kit on site? - ✔✔Yes
✔✔Should the contractor review the plan and specifications with his subs. Is it
necessary to write every little detail down for them? - ✔✔Yes, and Yes, as detailed as
possible.
✔✔Can a contractor receive payment for work that has not been completed? - ✔✔No.
Progress payments cannot exceed the value of the work performed at any given time.
✔✔When must you pay the subs? - ✔✔within 7 days of receiving progress payment.
✔✔What is the term given to a worker in training? - ✔✔Apprentice
✔✔What is the term given to a worker who is able to perform trade work unsupervised?
- ✔✔Journeyman
✔✔Who is responsible for training employees? - ✔✔Foreman, Supervisor
✔✔What is a foreman required to do for safety reasons, every ten days? - ✔✔Conduct
a safety meeting
✔✔Covers your property, tools and office against fire, storm, theft etc... It does not
cover your employees tools. - ✔✔Property Insurance
✔✔Covers your vehicles, trucks, equipment or trailers while you or your employees are
driving them. - ✔✔Vehicle Insurance
✔✔Covers against vandalism and theft of your property at the job site. - ✔✔Builder's
Risk Insurance
✔✔Covers the loss of a person who performs a crucial role in your company by
compensating the business. - ✔✔Key Person Insurance
✔✔It covers interruptions such as lawsuits, absence of owner, severe weather... -
✔✔Business Interruption Insurance
✔✔Covers the death of a person by compensating the survivors, or family members. -
✔✔Life Insurance
✔✔This policy goes above and beyond standard insurances and is therefore more
expensive. Most smaller companies do not have this for that reason. - ✔✔Umbrella
Policy
BUSINESS FINAL EXAM 2026 QUESTIONS AND
SOLUTIONS SCORED A+
✔✔What must be filed to keep the right to a Mechanic's Lien? How many days do you
have to file it? - ✔✔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.
✔✔Who files the Notice of Completion? How long does that person have? - ✔✔The
owner. 15 days to file it.
✔✔How many days does the contractor have to file a Mechanic's Lien? - ✔✔If the
owner does not file a Notice of Completion within 15 days, contractor has 90 days. If the
owner files within the proper time, Contractor has 60 days.
✔✔Small claims courts can only handle cases that are less than what amount? - ✔✔An
individual or small business owned by an individual can file up to 2 cases a year under
$7500. Businesses and Corporations can file up to 2 cases a year under $5000
✔✔Can you appeal a decision mad in small claims court? - ✔✔Yes.
✔✔Can you appeal a decision made in an arbitration hearing? - ✔✔No.
✔✔In addition to Mechanic's Lien and a Stop Payment Notice you may also file a ___
___ for Breach of Contract. - ✔✔Civil Suit
✔✔Whats the name of the form that notifies people there is a pending lawsuit on their
property. - ✔✔Lis Pendens
✔✔If you file a lien, but then get paid, what should you do. - ✔✔File a lien release form.
✔✔If changes are made to the job and the original job is not complete yet, what form
should be filed? - ✔✔A Contract Change Order
✔✔Who has to ensure that the subcontractors are licensed and insured? - ✔✔Direct
Contractor
✔✔How many bathrooms must be provided for every 20 employees? - ✔✔One
✔✔Are workers required to bring their own water to work? - ✔✔No. The work site is
responsible for providing clean and accessible drinking water to employees.
, ✔✔Does there need to be an emergency kit on site? - ✔✔Yes
✔✔Should the contractor review the plan and specifications with his subs. Is it
necessary to write every little detail down for them? - ✔✔Yes, and Yes, as detailed as
possible.
✔✔Can a contractor receive payment for work that has not been completed? - ✔✔No.
Progress payments cannot exceed the value of the work performed at any given time.
✔✔When must you pay the subs? - ✔✔within 7 days of receiving progress payment.
✔✔What is the term given to a worker in training? - ✔✔Apprentice
✔✔What is the term given to a worker who is able to perform trade work unsupervised?
- ✔✔Journeyman
✔✔Who is responsible for training employees? - ✔✔Foreman, Supervisor
✔✔What is a foreman required to do for safety reasons, every ten days? - ✔✔Conduct
a safety meeting
✔✔Covers your property, tools and office against fire, storm, theft etc... It does not
cover your employees tools. - ✔✔Property Insurance
✔✔Covers your vehicles, trucks, equipment or trailers while you or your employees are
driving them. - ✔✔Vehicle Insurance
✔✔Covers against vandalism and theft of your property at the job site. - ✔✔Builder's
Risk Insurance
✔✔Covers the loss of a person who performs a crucial role in your company by
compensating the business. - ✔✔Key Person Insurance
✔✔It covers interruptions such as lawsuits, absence of owner, severe weather... -
✔✔Business Interruption Insurance
✔✔Covers the death of a person by compensating the survivors, or family members. -
✔✔Life Insurance
✔✔This policy goes above and beyond standard insurances and is therefore more
expensive. Most smaller companies do not have this for that reason. - ✔✔Umbrella
Policy
