Mississippi Contractor Business & Law Exam
2026/2027 | ACTUAL-Style Practice Questions
& Answers, Construction Contracts, Business
Management, Licensing Rules, Insurance, and
Detailed Rationales
Question 1: What is the minimum contract amount that triggers the
requirement for a Certificate of Responsibility for commercial
contractors in Mississippi?
A. $25,000
B. $50,000
C. $75,000
D. $100,000
CORRECT ANSWER: B. $50,000
Rationale: Mississippi law requires that any contractor bidding on or
performing public or private construction projects equal to or exceeding
$50,000 must hold a Certificate of Responsibility from the Mississippi State
Board of Contractors. This threshold applies to both prime contractors and
subcontractors, and it is a fundamental licensing requirement that all
commercial contractors must understand.
Question 2: Which entity is responsible for administering contractor
licensing examinations in Mississippi?
A. Mississippi State Board of Contractors
B. PSI Services LLC
C. Mississippi Department of Revenue
D. NASCLA
CORRECT ANSWER: B. PSI Services LLC
Rationale: The Mississippi State Board of Contractors has contracted with
PSI Services LLC to conduct its examination program. PSI provides
examinations through a network of computer examination centers and
works closely with the state to ensure examinations meet both local and
national standards. All questions regarding examination scheduling and
administration should be directed to PSI.
,Question 3: What is the passing score required for the Mississippi Law
and Business Management examination?
A. 60%
B. 65%
C. 70%
D. 75%
CORRECT ANSWER: C. 70%
Rationale: The Mississippi Business and Law Contractor Exam requires a
passing score of 70%. This exam is an open-book test that assesses
knowledge of licensing, estimating and bidding, lien law, financial
management, tax laws, labor laws, project management, contracts,
business organization, risk management, and environmental and safety
matters.
Question 4: How long does a qualifying party have to complete required
examinations after the departure of the previous qualifying individual?
A. 30 days
B. 60 days
C. 90 days
D. 180 days
CORRECT ANSWER: C. 90 days
Rationale: If a qualifying individual leaves a firm holding a Certificate of
Responsibility, Mississippi law requires the company to notify the Board in
writing immediately. A new qualifying individual must be designated and
must successfully complete the required examinations within 90 days after
the departure of the previous qualifying individual. Failure to do so subjects
the Certificate of Responsibility to suspension or revocation.
Question 5: Under Mississippi law, what is the timeframe for an owner
to pay a contractor under a private construction contract after payment
is due?
A. 15 days
B. 30 days
,C. 45 days
D. 60 days
CORRECT ANSWER: B. 30 days
Rationale: Mississippi Code Section 87-7-3 requires that all partial,
progress, or interim payments owed to contractors on private construction
contracts be paid when due and payable under the terms of the contract. If
payment is not made within 30 calendar days from the day it was due, the
payment bears interest at the rate of 1% per month until fully paid.
Question 6: When a contractor receives payment from an owner, within
how many days must the contractor pay subcontractors and material
suppliers?
A. 7 days
B. 10 days
C. 15 days
D. 30 days
CORRECT ANSWER: C. 15 days
Rationale: Mississippi Code Section 87-7-5 requires that when a contractor
receives payment from an owner under a private construction contract, the
contractor must pay each subcontractor and material supplier in
proportion to the percentage of work completed. If the contractor fails to
make payment without reasonable cause within 15 days after receipt of
payment from the owner, a penalty of one-half of one percent (0.5%) per
day of delinquency applies, up to a maximum of 15% of the outstanding
balance.
Question 7: What is the maximum penalty that can be assessed against
a contractor for failure to timely pay subcontractors under Mississippi
prompt payment law?
A. 5% of outstanding balance
B. 10% of outstanding balance
C. 15% of outstanding balance
D. 20% of outstanding balance
, CORRECT ANSWER: C. 15% of outstanding balance
Rationale: Mississippi Code Section 87-7-5 establishes that the penalty for
a contractor's failure to make timely payment to subcontractors and
material suppliers is one-half of one percent (0.5%) per day of delinquency,
calculated from the expiration of the 15-day period until fully paid. The total
penalty shall not exceed fifteen percent (15%) of the outstanding balance
due.
Question 8: What bond amount is required for commercial contractors
licensed by the Mississippi State Board of Contractors?
A. $25,000
B. $50,000
C. $75,000
D. $100,000
CORRECT ANSWER: D. $100,000
Rationale: Under Mississippi Code Section 31-3-21, commercial
contractors must post a $100,000 surety bond as part of the licensing
requirement. This applies to building contractors, highway contractors,
heavy construction contractors, and specialty commercial contractors.
This bond ensures compliance with Mississippi contracting laws and
payment obligations to subcontractors and suppliers.
Question 9: What type of examination is the Mississippi Law and
Business Management examination?
A. Closed book
B. Open book
C. Oral only
D. Practical demonstration
CORRECT ANSWER: B. Open book
Rationale: All Mississippi contractor examinations administered by PSI are
open-book exams. The Mississippi Business and Law exam allows
candidates to use reference materials during the examination, including
the NASCLA Contractors Guide to Business, Law and Project Management.
2026/2027 | ACTUAL-Style Practice Questions
& Answers, Construction Contracts, Business
Management, Licensing Rules, Insurance, and
Detailed Rationales
Question 1: What is the minimum contract amount that triggers the
requirement for a Certificate of Responsibility for commercial
contractors in Mississippi?
A. $25,000
B. $50,000
C. $75,000
D. $100,000
CORRECT ANSWER: B. $50,000
Rationale: Mississippi law requires that any contractor bidding on or
performing public or private construction projects equal to or exceeding
$50,000 must hold a Certificate of Responsibility from the Mississippi State
Board of Contractors. This threshold applies to both prime contractors and
subcontractors, and it is a fundamental licensing requirement that all
commercial contractors must understand.
Question 2: Which entity is responsible for administering contractor
licensing examinations in Mississippi?
A. Mississippi State Board of Contractors
B. PSI Services LLC
C. Mississippi Department of Revenue
D. NASCLA
CORRECT ANSWER: B. PSI Services LLC
Rationale: The Mississippi State Board of Contractors has contracted with
PSI Services LLC to conduct its examination program. PSI provides
examinations through a network of computer examination centers and
works closely with the state to ensure examinations meet both local and
national standards. All questions regarding examination scheduling and
administration should be directed to PSI.
,Question 3: What is the passing score required for the Mississippi Law
and Business Management examination?
A. 60%
B. 65%
C. 70%
D. 75%
CORRECT ANSWER: C. 70%
Rationale: The Mississippi Business and Law Contractor Exam requires a
passing score of 70%. This exam is an open-book test that assesses
knowledge of licensing, estimating and bidding, lien law, financial
management, tax laws, labor laws, project management, contracts,
business organization, risk management, and environmental and safety
matters.
Question 4: How long does a qualifying party have to complete required
examinations after the departure of the previous qualifying individual?
A. 30 days
B. 60 days
C. 90 days
D. 180 days
CORRECT ANSWER: C. 90 days
Rationale: If a qualifying individual leaves a firm holding a Certificate of
Responsibility, Mississippi law requires the company to notify the Board in
writing immediately. A new qualifying individual must be designated and
must successfully complete the required examinations within 90 days after
the departure of the previous qualifying individual. Failure to do so subjects
the Certificate of Responsibility to suspension or revocation.
Question 5: Under Mississippi law, what is the timeframe for an owner
to pay a contractor under a private construction contract after payment
is due?
A. 15 days
B. 30 days
,C. 45 days
D. 60 days
CORRECT ANSWER: B. 30 days
Rationale: Mississippi Code Section 87-7-3 requires that all partial,
progress, or interim payments owed to contractors on private construction
contracts be paid when due and payable under the terms of the contract. If
payment is not made within 30 calendar days from the day it was due, the
payment bears interest at the rate of 1% per month until fully paid.
Question 6: When a contractor receives payment from an owner, within
how many days must the contractor pay subcontractors and material
suppliers?
A. 7 days
B. 10 days
C. 15 days
D. 30 days
CORRECT ANSWER: C. 15 days
Rationale: Mississippi Code Section 87-7-5 requires that when a contractor
receives payment from an owner under a private construction contract, the
contractor must pay each subcontractor and material supplier in
proportion to the percentage of work completed. If the contractor fails to
make payment without reasonable cause within 15 days after receipt of
payment from the owner, a penalty of one-half of one percent (0.5%) per
day of delinquency applies, up to a maximum of 15% of the outstanding
balance.
Question 7: What is the maximum penalty that can be assessed against
a contractor for failure to timely pay subcontractors under Mississippi
prompt payment law?
A. 5% of outstanding balance
B. 10% of outstanding balance
C. 15% of outstanding balance
D. 20% of outstanding balance
, CORRECT ANSWER: C. 15% of outstanding balance
Rationale: Mississippi Code Section 87-7-5 establishes that the penalty for
a contractor's failure to make timely payment to subcontractors and
material suppliers is one-half of one percent (0.5%) per day of delinquency,
calculated from the expiration of the 15-day period until fully paid. The total
penalty shall not exceed fifteen percent (15%) of the outstanding balance
due.
Question 8: What bond amount is required for commercial contractors
licensed by the Mississippi State Board of Contractors?
A. $25,000
B. $50,000
C. $75,000
D. $100,000
CORRECT ANSWER: D. $100,000
Rationale: Under Mississippi Code Section 31-3-21, commercial
contractors must post a $100,000 surety bond as part of the licensing
requirement. This applies to building contractors, highway contractors,
heavy construction contractors, and specialty commercial contractors.
This bond ensures compliance with Mississippi contracting laws and
payment obligations to subcontractors and suppliers.
Question 9: What type of examination is the Mississippi Law and
Business Management examination?
A. Closed book
B. Open book
C. Oral only
D. Practical demonstration
CORRECT ANSWER: B. Open book
Rationale: All Mississippi contractor examinations administered by PSI are
open-book exams. The Mississippi Business and Law exam allows
candidates to use reference materials during the examination, including
the NASCLA Contractors Guide to Business, Law and Project Management.
