1
CSLB BUSINESS AND LAW EXAM 2025 |
ACTUAL QUESTIONS AND CORRECT
VERIFIED ANSWERS | LATEST VERSION
| ALREADY GRADED A+
Multiple-Choice Questions
1. What is the minimum amount for a home improvement contract to be considered
legally binding in writing under California law?
A. $300
B. $500
C. $750
D. $1,000
Correct Answer: B
Rationale: According to the California Contractors State License Board (CSLB), all
home improvement contracts exceeding $500 must be in writing to be legally binding,
ensuring consumer protection and clarity of terms.
2. Which agency must a contractor remit state disability insurance taxes withheld
from employees’ wages?
A. Employment Development Department (EDD)
B. Franchise Tax Board (FTB)
C. Department of Industrial Relations (DIR)
D. Board of Equalization (BOE)
Correct Answer: A
Rationale: The EDD is responsible for collecting state disability insurance taxes
withheld from employee wages, as outlined in California’s labor regulations.
3. What is the maximum simple slope for an excavation up to 20 feet deep in Type-B
soil for safety purposes?
A. 1:1 (45°)
B. 1.5:1 (34°)
C. 0.5:1 (63°)
D. 2:1 (27°)
Correct Answer: A
Rationale: For Type-B soil, OSHA and California safety standards require a maximum
slope of 1:1 (45°) for excavations up to 20 feet to prevent collapse.
4. Within how many days must a contractor substantially begin work on a home
improvement contract after the date specified in the contract?
A. 10
B. 15
C. 20
D. 30
Correct Answer: C
, 2
Rationale: California Business and Professions Code requires contractors to begin work
within 20 days of the agreed start date in a home improvement contract, unless otherwise
specified.
5. Which document must be included in a home improvement contract to inform the
owner of their right to require a performance and payment bond?
A. Notice of Right to Cancel
B. Mechanics Lien Warning
C. Notice to Owner
D. Truth-in-Lending Notice
Correct Answer: C
Rationale: The “Notice to Owner” is required in home improvement contracts to inform
owners of their right to request a performance and payment bond, protecting against non-
payment or incomplete work.
6. What is the minimum font size for the notice of the owner’s right to cancel in a
home improvement contract?
A. 8-point
B. 10-point
C. 12-point
D. 14-point
Correct Answer: B
Rationale: California law mandates that the notice of the right to cancel in home
improvement contracts be in at least 10-point font, ensuring readability for consumers.
7. How often must contractors conduct “toolbox” or “tailgate” safety meetings as part
of their safety training process?
A. Weekly
B. Biweekly
C. Every 10 working days
D. Monthly
Correct Answer: C
Rationale: California OSHA regulations require contractors to hold safety meetings at
least every 10 working days to ensure ongoing safety awareness.
8. Which of the following is NOT required in a home improvement contract?
A. Contractor’s license number
B. Approximate start and completion dates
C. Names and addresses of all personnel listed on the license
D. Description of work and materials
Correct Answer: C
Rationale: Only the contractor’s name, address, and license number are required, not the
names and addresses of all personnel listed on the license.
9. What is the cost of the 2025 CSLB Law and Business Exam if a candidate is taking
only one exam?
A. $51.43
B. $75.00
C. $102.86
D. $150.00
Correct Answer: A
, 3
Rationale: Starting January 2025, the CSLB exam fee structure sets the cost at $51.43
for a single exam, paid directly to PSI Exams.
10. Which act establishes the rights of workers to organize into unions and negotiate
contracts?
A. Fair Labor Standards Act
B. National Labor Relations Act
C. Occupational Safety and Health Act
D. Davis-Bacon Act
Correct Answer: B
Rationale: The National Labor Relations Act protects workers’ rights to unionize and
engage in collective bargaining.
11. What is the deadline for a consumer to cancel a home solicitation contract?
A. Midnight of the 3rd business day
B. Midnight of the 5th business day
C. Midnight of the 7th business day
D. Midnight of the 10th business day
Correct Answer: A
Rationale: California law allows consumers to cancel home solicitation contracts by
midnight of the third business day after signing.
12. Which type of contract can a consumer cancel under California law?
A. Subcontract
B. Prime construction contract
C. Home solicitation contract for permanent fixtures
D. Home improvement contract for free-standing furniture
Correct Answer: C
Rationale: Home solicitation contracts involving permanent fixtures (e.g., fencing,
alarms) are cancellable within three business days, unlike contracts for non-fixtures.
13. What form must employees hired on or after November 7, 1986, complete to verify
employment eligibility under the Immigration Reform and Control Act?
A. W-2
B. I-9
C. W-4
D. SS-4
Correct Answer: B
Rationale: The I-9 form is required to verify an employee’s identity and eligibility to
work in the U.S.
14. What is the penalty for a contractor failing to notify the CSLB of a new
corporation’s license number within the required timeframe?
A. $500 fine
B. License suspension
C. $1,000 fine
D. No penalty
Correct Answer: B
Rationale: Failure to notify the CSLB of a new corporation’s license number can result
in license suspension, as it violates licensing regulations.
CSLB BUSINESS AND LAW EXAM 2025 |
ACTUAL QUESTIONS AND CORRECT
VERIFIED ANSWERS | LATEST VERSION
| ALREADY GRADED A+
Multiple-Choice Questions
1. What is the minimum amount for a home improvement contract to be considered
legally binding in writing under California law?
A. $300
B. $500
C. $750
D. $1,000
Correct Answer: B
Rationale: According to the California Contractors State License Board (CSLB), all
home improvement contracts exceeding $500 must be in writing to be legally binding,
ensuring consumer protection and clarity of terms.
2. Which agency must a contractor remit state disability insurance taxes withheld
from employees’ wages?
A. Employment Development Department (EDD)
B. Franchise Tax Board (FTB)
C. Department of Industrial Relations (DIR)
D. Board of Equalization (BOE)
Correct Answer: A
Rationale: The EDD is responsible for collecting state disability insurance taxes
withheld from employee wages, as outlined in California’s labor regulations.
3. What is the maximum simple slope for an excavation up to 20 feet deep in Type-B
soil for safety purposes?
A. 1:1 (45°)
B. 1.5:1 (34°)
C. 0.5:1 (63°)
D. 2:1 (27°)
Correct Answer: A
Rationale: For Type-B soil, OSHA and California safety standards require a maximum
slope of 1:1 (45°) for excavations up to 20 feet to prevent collapse.
4. Within how many days must a contractor substantially begin work on a home
improvement contract after the date specified in the contract?
A. 10
B. 15
C. 20
D. 30
Correct Answer: C
, 2
Rationale: California Business and Professions Code requires contractors to begin work
within 20 days of the agreed start date in a home improvement contract, unless otherwise
specified.
5. Which document must be included in a home improvement contract to inform the
owner of their right to require a performance and payment bond?
A. Notice of Right to Cancel
B. Mechanics Lien Warning
C. Notice to Owner
D. Truth-in-Lending Notice
Correct Answer: C
Rationale: The “Notice to Owner” is required in home improvement contracts to inform
owners of their right to request a performance and payment bond, protecting against non-
payment or incomplete work.
6. What is the minimum font size for the notice of the owner’s right to cancel in a
home improvement contract?
A. 8-point
B. 10-point
C. 12-point
D. 14-point
Correct Answer: B
Rationale: California law mandates that the notice of the right to cancel in home
improvement contracts be in at least 10-point font, ensuring readability for consumers.
7. How often must contractors conduct “toolbox” or “tailgate” safety meetings as part
of their safety training process?
A. Weekly
B. Biweekly
C. Every 10 working days
D. Monthly
Correct Answer: C
Rationale: California OSHA regulations require contractors to hold safety meetings at
least every 10 working days to ensure ongoing safety awareness.
8. Which of the following is NOT required in a home improvement contract?
A. Contractor’s license number
B. Approximate start and completion dates
C. Names and addresses of all personnel listed on the license
D. Description of work and materials
Correct Answer: C
Rationale: Only the contractor’s name, address, and license number are required, not the
names and addresses of all personnel listed on the license.
9. What is the cost of the 2025 CSLB Law and Business Exam if a candidate is taking
only one exam?
A. $51.43
B. $75.00
C. $102.86
D. $150.00
Correct Answer: A
, 3
Rationale: Starting January 2025, the CSLB exam fee structure sets the cost at $51.43
for a single exam, paid directly to PSI Exams.
10. Which act establishes the rights of workers to organize into unions and negotiate
contracts?
A. Fair Labor Standards Act
B. National Labor Relations Act
C. Occupational Safety and Health Act
D. Davis-Bacon Act
Correct Answer: B
Rationale: The National Labor Relations Act protects workers’ rights to unionize and
engage in collective bargaining.
11. What is the deadline for a consumer to cancel a home solicitation contract?
A. Midnight of the 3rd business day
B. Midnight of the 5th business day
C. Midnight of the 7th business day
D. Midnight of the 10th business day
Correct Answer: A
Rationale: California law allows consumers to cancel home solicitation contracts by
midnight of the third business day after signing.
12. Which type of contract can a consumer cancel under California law?
A. Subcontract
B. Prime construction contract
C. Home solicitation contract for permanent fixtures
D. Home improvement contract for free-standing furniture
Correct Answer: C
Rationale: Home solicitation contracts involving permanent fixtures (e.g., fencing,
alarms) are cancellable within three business days, unlike contracts for non-fixtures.
13. What form must employees hired on or after November 7, 1986, complete to verify
employment eligibility under the Immigration Reform and Control Act?
A. W-2
B. I-9
C. W-4
D. SS-4
Correct Answer: B
Rationale: The I-9 form is required to verify an employee’s identity and eligibility to
work in the U.S.
14. What is the penalty for a contractor failing to notify the CSLB of a new
corporation’s license number within the required timeframe?
A. $500 fine
B. License suspension
C. $1,000 fine
D. No penalty
Correct Answer: B
Rationale: Failure to notify the CSLB of a new corporation’s license number can result
in license suspension, as it violates licensing regulations.
