, Question 1
A Virginia Class A contractor signs a $75,000 contract, then later executes a
separate $60,000 contract. Under the Board for Contractors' single-project
threshold rule, what is the correct classification?
A. Both contracts are lawful because each is under $120,000.
B. The Class A license is required only if a single project exceeds
$120,000.
C. The $60,000 contract alone triggers Class A because cumulative
annual volume exceeds $120,000.
D. The $75,000 contract requires Class B or higher; the $60,000 contract
requires Class C only.
Correct Answer: B - The Class A license is required only if a
single project exceeds $120,000.
RATIONALE
Virginia defines Class A by the ability to bid on or undertake single
projects of $120,000 or more, not by annual aggregate volume. Two
separate contracts each under $120,000 do not create Class A exposure
solely through aggregation. Class B covers single projects from
$10,000 to $120,000, and Class C covers $10,000 or less.
Question 2
A Class A contractor's superintendent is convicted of felony embezzlement
from a prior employer. Which Board action is most consistent with Virginia's
discretionary disciplinary framework?
A. Automatic license revocation without a hearing.
B. Mandatory suspension until the felony is expunged.
C. The Board may consider the conviction as evidence of improper
conduct and impose sanctions after notice and hearing.
D. No action, because the conviction is unrelated to construction activity.
Correct Answer: C - The Board may consider the conviction as
Page 2
,evidence of improper conduct and impose sanctions after notice
and hearing.
RATIONALE
Virginia grants the Board discretionary authority to sanction licensees
for convictions involving moral turpitude or improper conduct that
bears on fitness to contract, but only after notice and an opportunity
for hearing. Sanctions range from reprimand to revocation and are not
automatic. The Board weighs the nature, recency, and relationship of
the offense to the regulated activity.
Question 3
A subcontractor perfects a mechanics' lien on a commercial project. The
general contractor later files bankruptcy. Which statement best describes the
subcontractor's position?
A. The lien is extinguished by the general contractor's bankruptcy
discharge.
B. The lien survives as an in rem claim against the improved property,
subject to priority and avoidance rules.
C. The lien automatically converts to an unsecured claim in the
bankruptcy estate.
D. The lien is void unless the owner also files bankruptcy.
Correct Answer: B - The lien survives as an in rem claim against
the improved property, subject to priority and avoidance rules.
RATIONALE
A perfected mechanics' lien is an in rem interest in the improved real
property and is generally not discharged by the general contractor's
personal bankruptcy. The lienholder must still comply with Virginia
enforcement timelines and may face avoidance if the lien was not
timely perfected. Priority against other encumbrances is determined by
recording and statutory relation-back rules.
Page 3
, Question 4
An owner fails to pay a progress payment within the period required by
Virginia's prompt-payment statute. Which remedy is most directly available to
the contractor?
A. Immediate termination of the contract without notice.
B. Recovery of interest and, in some cases, attorney's fees.
C. Automatic doubling of the unpaid amount as a penalty.
D. Referral to the Board for Contractors for criminal prosecution.
Correct Answer: B - Recovery of interest and, in some cases,
attorney's fees.
RATIONALE
Virginia's prompt-payment provisions allow the contractor to recover
interest on wrongfully withheld amounts and, where the contract or
statute permits, reasonable attorney's fees. The statute does not
authorize self-help termination or punitive doubling. Criminal
prosecution is not a remedy for ordinary payment disputes.
Question 5
A contractor's balance sheet shows current assets of $400,000, current
liabilities of $250,000, and inventory of $120,000. What is the quick ratio, and
how should it be interpreted?
A. 1.12; strong liquidity because it exceeds 1.0.
B. 1.60; the firm can cover short-term obligations with liquid assets.
C. 1.12; acceptable but tighter when inventory is excluded.
D. 0.88; the firm cannot cover current liabilities without selling
inventory.
Correct Answer: A - 1.12; strong liquidity because it exceeds 1.0.
Page 4
A Virginia Class A contractor signs a $75,000 contract, then later executes a
separate $60,000 contract. Under the Board for Contractors' single-project
threshold rule, what is the correct classification?
A. Both contracts are lawful because each is under $120,000.
B. The Class A license is required only if a single project exceeds
$120,000.
C. The $60,000 contract alone triggers Class A because cumulative
annual volume exceeds $120,000.
D. The $75,000 contract requires Class B or higher; the $60,000 contract
requires Class C only.
Correct Answer: B - The Class A license is required only if a
single project exceeds $120,000.
RATIONALE
Virginia defines Class A by the ability to bid on or undertake single
projects of $120,000 or more, not by annual aggregate volume. Two
separate contracts each under $120,000 do not create Class A exposure
solely through aggregation. Class B covers single projects from
$10,000 to $120,000, and Class C covers $10,000 or less.
Question 2
A Class A contractor's superintendent is convicted of felony embezzlement
from a prior employer. Which Board action is most consistent with Virginia's
discretionary disciplinary framework?
A. Automatic license revocation without a hearing.
B. Mandatory suspension until the felony is expunged.
C. The Board may consider the conviction as evidence of improper
conduct and impose sanctions after notice and hearing.
D. No action, because the conviction is unrelated to construction activity.
Correct Answer: C - The Board may consider the conviction as
Page 2
,evidence of improper conduct and impose sanctions after notice
and hearing.
RATIONALE
Virginia grants the Board discretionary authority to sanction licensees
for convictions involving moral turpitude or improper conduct that
bears on fitness to contract, but only after notice and an opportunity
for hearing. Sanctions range from reprimand to revocation and are not
automatic. The Board weighs the nature, recency, and relationship of
the offense to the regulated activity.
Question 3
A subcontractor perfects a mechanics' lien on a commercial project. The
general contractor later files bankruptcy. Which statement best describes the
subcontractor's position?
A. The lien is extinguished by the general contractor's bankruptcy
discharge.
B. The lien survives as an in rem claim against the improved property,
subject to priority and avoidance rules.
C. The lien automatically converts to an unsecured claim in the
bankruptcy estate.
D. The lien is void unless the owner also files bankruptcy.
Correct Answer: B - The lien survives as an in rem claim against
the improved property, subject to priority and avoidance rules.
RATIONALE
A perfected mechanics' lien is an in rem interest in the improved real
property and is generally not discharged by the general contractor's
personal bankruptcy. The lienholder must still comply with Virginia
enforcement timelines and may face avoidance if the lien was not
timely perfected. Priority against other encumbrances is determined by
recording and statutory relation-back rules.
Page 3
, Question 4
An owner fails to pay a progress payment within the period required by
Virginia's prompt-payment statute. Which remedy is most directly available to
the contractor?
A. Immediate termination of the contract without notice.
B. Recovery of interest and, in some cases, attorney's fees.
C. Automatic doubling of the unpaid amount as a penalty.
D. Referral to the Board for Contractors for criminal prosecution.
Correct Answer: B - Recovery of interest and, in some cases,
attorney's fees.
RATIONALE
Virginia's prompt-payment provisions allow the contractor to recover
interest on wrongfully withheld amounts and, where the contract or
statute permits, reasonable attorney's fees. The statute does not
authorize self-help termination or punitive doubling. Criminal
prosecution is not a remedy for ordinary payment disputes.
Question 5
A contractor's balance sheet shows current assets of $400,000, current
liabilities of $250,000, and inventory of $120,000. What is the quick ratio, and
how should it be interpreted?
A. 1.12; strong liquidity because it exceeds 1.0.
B. 1.60; the firm can cover short-term obligations with liquid assets.
C. 1.12; acceptable but tighter when inventory is excluded.
D. 0.88; the firm cannot cover current liabilities without selling
inventory.
Correct Answer: A - 1.12; strong liquidity because it exceeds 1.0.
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