CSLB - Law and Business Exam Questions And Answers | 2025 Updated Solutions | 100% Correct Answers

CSLB - Law and Business Exam Questions And Answers | 2025 Updated Solutions | 100% Correct Answers Responsible Managing Officer (RMO) - ANSWER -Officer of Corp Journeyman - ANSWER -A person who has completed an apprecnticeship program or is an experienced worker, not a trainee, and is fully qualified to perform the trade without supervision. Foreman/Supervisor - ANSWER -A person who has the knowledge/skill of a journeyman and directly supervises physical construction What are penalties for contracting w/out a license - ANSWER -- Misdemeanor offense - 1st offense may receive citation from registrar, potential sentence of up to 6 months in jail and/or $500 fine, which is accompanied by civil penalty of no less than $200 and no more than $15,000. May lessen or waive if contractor obtains license within prescribed period of time. - Felony charges for contracting w/out a license in emergency projects. - 2nd offense found guilty of criminal offense which is punishable by civil penalty of 20% contract price or $4,500, whichever is greater, and county jail min 90 days. Penalty for advertising for work outside of your license - ANSWER -fine of $700-$1000 Penalty for hiring unlicensed sub or allowing use of license - ANSWER -Citation from registrar and civil penalty up to $15,000 Penalty for deliberate fraudulent use of contractor's license - ANSWER -Up to $10,000 and/or one year jail Bond must be filed with _ within _ days of effective date of bond. - ANSWER -CSLB ; 90 Contractor's Bond amount - ANSWER -$15,000 Performance Bond - ANSWER -guarantees job will be completed according to building plans and specs. If work is unacceptable or project is abandoned, bonding company can hire another contractor to complete the work or settle for damages. Payment Bond - ANSWER -Guarantee to the owner that no liens for materials or labor will be filed against the property. Contract Bond - ANSWER -Guarantees both job completion and payment of all labor and materials. Bid Shopping - ANSWER -When prime contractor discloses sub's bid to other subs to get them to lower their price. Bid Peddling - ANSWER -When a sub whose bid wasn't chosen lowers bid in attempt to induce contractor to pick them instead. The Listing Law - ANSWER -Applies to state and local public works projects. Requires contractor to include in their bid name, place of business, and license # of each sub whose bid is .5% or more of total bid or $10,000 or more, whichever is greater, and the portion of work performed by each sub. If contractor violates, public entity may cancel contract or assess penalty of not more than 10% of amount of subcontract involved. May also be subjected to discipline by CSLB. If material change is made by public entity to its invitation to bid w/in 72 hours of bid closing, what has to happen? - ANSWER -Must extend deadline by no less than 72 hours. Reasons public entity can give consent for contractor to substitute a sub. - ANSWER - Failure to execute contract Insolvency Failure to perform subcontract Failure to furnish bonds Clerical error Unlicensed Failure to perform work Failure to pay prevailing wages Not qualified Public emergency or necessity (only after written finding) If contractor requests substitution of sub on public job, public entity is required to___? - ANSWER -Give written notice to sub of request and reason for it by certified mail. Sub has 5 working days to submit appeal. Then a hearing will be held. Public entity must give written notice to sub at least 5 working days before hearing. If contractor requests substitution of sub on public job due to clerical error, what must he/she do? - ANSWER -Give written notice to public entity, listed sub, and intended sub, within 2 working days after bid opening. Listed sub has 6 working days from bid opening to submit to public entity written objections. Contractor, listed sub, and intended sub then have 8 working days from bid opening to submit affidavits to public entity. Then a hearing is held. For a contract to be formed: - ANSWER -Offer Acceptance Consideration Legality Contractors License Law - ANSWER -Must give owner a notice (on property with 4 or fewer units) informing them of contractor's license requirements and give info on how to check with board to determine status of license. Notice must be in capital letters in 10pt Roman bold font or in contrasting red in at least 8pt Roman bold font. If license has be suspended or revoked 2 or more times w/in 8 year period, any disciplinary license suspension or revocation must be disclosed. Same font requirements. Contract Notice must be included in at least 10pt letting owner know of requirements to become licensed by the board and address if further questions. Swimming pool and home improvement contracts must include a Mechanic's Lien Warning. Informs owner of his/her and contractor's rights and responsibilities with respect to Mechanic's Lien Warning. Must include general liability disclosure. Heading must be 14pt type with questions in at least 12pt, with comments in italics of at least 11pt. 20-day Preliminary Notice - ANSWER -Not a lien. Preserves right of subs/materials provider to record a lien on your property if not paid. Can be sent up to 20 days after the sub starts work or supplier provides materials. Not used by prime contractor as already obvious they are working on owner's property. Requirements for written contract - ANSWER -- Must be signed by all parties involved. - Estimated start and finish of work. - Name, address, license number, description of license classification of contractor. - Name and registration number of home improvement sales person if applicable. - Description of materials to be used, work to be done, equipment to be installed, and contract price. - Statement of what constitutes substantial commencement of work to be performed. - Whether you charge down payment. Must be $1000 or 10% of contract amount, whichever is less. - In addition to down payment, if other payments made prior to completion of work, must provide schedule of payments to be made in dollars and cents. Contractor cannot accept payments that exceed the value of work or materials delivered up to that point. - Notice to Owner that describes Mechanic's Lien Law and how it applies to owner/contractor.