TN BUSINESS AND LAW CORE EXAM SET 2025/2026
QUESTIONS WITH SOLUTIONS RATED A+
✔✔Advantages of a LLC - ✔✔limited disclosure of owners, limited documentation, no
advance IRS filings, no public disclosure of finances, limited liability for managers and
members, ability to delegate management to non members
✔✔Joint Venture - ✔✔generally formed on a project basis in order to integrate positive
attributes and resources of to or more companies
✔✔Purpose of Licensing - ✔✔protects the health, safety, and welfare of the public
✔✔Tennessee Board of Licensing Contractors - ✔✔regulates contracting activities
through examination, licensure, and disciplinary
✔✔TN Contractor License Requirements - ✔✔must have contractor license for
construction projects of $25,000 or more
✔✔Licensing Process - ✔✔testing, financial statement, reference letter, corporations
and LLC, application, signature and notarize, submit application and $250 fee, board
review, issuance of license
✔✔Risk Management Benefits - ✔✔lower business and liability insurance premiums,
reduce chances of being sued, improve chances of prevailing in a lawsuit
✔✔Insurance - ✔✔supplement your risk management program to protect your business
against unforeseen events
✔✔Bond - ✔✔a risk transfer mechanism between a surety bonding company, the
contractor, and the project owner. The agreement binds the contractor to comply with
the terms and conditions of a contract, If the contractor cannot perform the contract, the
surely bonding company assumes the contracto'r's responsibilities and ensures that the
project is completed.
✔✔Types of Bonds - ✔✔performance, payment, maintenance, completion, fidelity, lien
✔✔Time Management - ✔✔gives you competitive edge and helps you anticipate
problems before they occur
✔✔Time Management Tips - ✔✔prioritize tasks daily, delegate effectively when
possible, use checklists and calendars, do not procrastinate
✔✔Logos, Stationary, and Business Cards - ✔✔these simple marketing tools can help
establish your company's identity
,✔✔Promotional Materials - ✔✔can extend your marketing program by using things such
as brochures, job site signs, websites, social media
✔✔Public Reltaions - ✔✔inexpensive marketing like networking, in local eye, hold open
house
✔✔Effective Selling Skills - ✔✔carefully listening to potential customer needs
✔✔Estimator must ask what type of questions? - ✔✔company resources and type of
work, site considerations, location and cost effectiveness, risk assessment, profitability
of project
✔✔Bid Documents - ✔✔a package put together containing all documents according to
the required specifications
✔✔Documents in Bid Package - ✔✔invitation to bid, bid instructions, bid forms, bid
schedule, bidder's experience, financial responsibility, and supplements
✔✔Addendum - ✔✔changes made to bid documents after they are issued but before
they are due
✔✔Bid Shopping - ✔✔an unethical situation where the general contractor approaches
subcontractors other than those who have submitted bids to seek a lower offer than
what was quoted in the original bids
✔✔Bid Peddling - ✔✔a unethical situation where the subcontractor approaches the
feneral contractor after the project is awarded with the intent of lowering the original
price submitted on bid day
✔✔Bid Rigging - ✔✔a form of collusion where contractors coordinate their bids to fix the
award outcome of a project
✔✔Estimate Planning - ✔✔the sum of the costs to complete the project and added
overhead and profit margin
✔✔Project Documents - ✔✔construction or architectural drawings, specifications, the
contract, bonds
✔✔Estimating Framework - ✔✔lists the process for completing the job by defining the
phases of the project and listing each task and materials needed for each phase
✔✔Determining Estimated Costs - ✔✔quantity take off method is one of the more
accurate estimating methods
, ✔✔Quantity Take Off Method - ✔✔individually estimate units of materials and labor for
each task listed
✔✔Contract - ✔✔legally binding agreement between two or more parties with the main
purpose of preventing disputes between parties entering into the agreement
✔✔Legally Binding Contract Contains - ✔✔offer and acceptance, consideration,
competent parties, and legal purpose
✔✔Contract Provisions - ✔✔clause or condition in a contract that requires or prevents
one or both parties to perform a particular requirement by a specific period of time
✔✔Supplemental Conditions - ✔✔modify the general conditions of the contract
✔✔Breach of Contract - ✔✔occurs when one of the parties involved fails to perform in
accordance with any of the terms and conditions of the contract
✔✔Boilerplate Provisions - ✔✔contain standard language designed to protect you in the
event of a lawsuit
✔✔Material Breach - ✔✔a serious violation of a contract that may void the contract and
will most likely end up in litigation
✔✔Immaterial Breach - ✔✔less serious violation of a contract that does not result in
termination
✔✔Provisions to Limit Risk - ✔✔provisions limit the liability of he contracting parties by
addressing allocation of risk
✔✔What are Recitals? - ✔✔language at the beginning of the contract that provides
background to the contract (who is entering it and why)
✔✔Lump Sum Contract - ✔✔a contract where the contractor agrees to complete the
project for a predetermined specified price. the contractor essentially assumes all of the
risk under this contract agreement because the contractor is responsible for additional
costs associated with unforeseen circumstances
✔✔Unit Price Contract - ✔✔a type of contract where a price per unit is calculated for
each item and the contractor is paid according to the actual quantities used
✔✔Cost Plus Constract - ✔✔a type of contract where the contractor is reimbursed for
the actual cost of labor and materials and is paid a markup fee for overhead and profit
QUESTIONS WITH SOLUTIONS RATED A+
✔✔Advantages of a LLC - ✔✔limited disclosure of owners, limited documentation, no
advance IRS filings, no public disclosure of finances, limited liability for managers and
members, ability to delegate management to non members
✔✔Joint Venture - ✔✔generally formed on a project basis in order to integrate positive
attributes and resources of to or more companies
✔✔Purpose of Licensing - ✔✔protects the health, safety, and welfare of the public
✔✔Tennessee Board of Licensing Contractors - ✔✔regulates contracting activities
through examination, licensure, and disciplinary
✔✔TN Contractor License Requirements - ✔✔must have contractor license for
construction projects of $25,000 or more
✔✔Licensing Process - ✔✔testing, financial statement, reference letter, corporations
and LLC, application, signature and notarize, submit application and $250 fee, board
review, issuance of license
✔✔Risk Management Benefits - ✔✔lower business and liability insurance premiums,
reduce chances of being sued, improve chances of prevailing in a lawsuit
✔✔Insurance - ✔✔supplement your risk management program to protect your business
against unforeseen events
✔✔Bond - ✔✔a risk transfer mechanism between a surety bonding company, the
contractor, and the project owner. The agreement binds the contractor to comply with
the terms and conditions of a contract, If the contractor cannot perform the contract, the
surely bonding company assumes the contracto'r's responsibilities and ensures that the
project is completed.
✔✔Types of Bonds - ✔✔performance, payment, maintenance, completion, fidelity, lien
✔✔Time Management - ✔✔gives you competitive edge and helps you anticipate
problems before they occur
✔✔Time Management Tips - ✔✔prioritize tasks daily, delegate effectively when
possible, use checklists and calendars, do not procrastinate
✔✔Logos, Stationary, and Business Cards - ✔✔these simple marketing tools can help
establish your company's identity
,✔✔Promotional Materials - ✔✔can extend your marketing program by using things such
as brochures, job site signs, websites, social media
✔✔Public Reltaions - ✔✔inexpensive marketing like networking, in local eye, hold open
house
✔✔Effective Selling Skills - ✔✔carefully listening to potential customer needs
✔✔Estimator must ask what type of questions? - ✔✔company resources and type of
work, site considerations, location and cost effectiveness, risk assessment, profitability
of project
✔✔Bid Documents - ✔✔a package put together containing all documents according to
the required specifications
✔✔Documents in Bid Package - ✔✔invitation to bid, bid instructions, bid forms, bid
schedule, bidder's experience, financial responsibility, and supplements
✔✔Addendum - ✔✔changes made to bid documents after they are issued but before
they are due
✔✔Bid Shopping - ✔✔an unethical situation where the general contractor approaches
subcontractors other than those who have submitted bids to seek a lower offer than
what was quoted in the original bids
✔✔Bid Peddling - ✔✔a unethical situation where the subcontractor approaches the
feneral contractor after the project is awarded with the intent of lowering the original
price submitted on bid day
✔✔Bid Rigging - ✔✔a form of collusion where contractors coordinate their bids to fix the
award outcome of a project
✔✔Estimate Planning - ✔✔the sum of the costs to complete the project and added
overhead and profit margin
✔✔Project Documents - ✔✔construction or architectural drawings, specifications, the
contract, bonds
✔✔Estimating Framework - ✔✔lists the process for completing the job by defining the
phases of the project and listing each task and materials needed for each phase
✔✔Determining Estimated Costs - ✔✔quantity take off method is one of the more
accurate estimating methods
, ✔✔Quantity Take Off Method - ✔✔individually estimate units of materials and labor for
each task listed
✔✔Contract - ✔✔legally binding agreement between two or more parties with the main
purpose of preventing disputes between parties entering into the agreement
✔✔Legally Binding Contract Contains - ✔✔offer and acceptance, consideration,
competent parties, and legal purpose
✔✔Contract Provisions - ✔✔clause or condition in a contract that requires or prevents
one or both parties to perform a particular requirement by a specific period of time
✔✔Supplemental Conditions - ✔✔modify the general conditions of the contract
✔✔Breach of Contract - ✔✔occurs when one of the parties involved fails to perform in
accordance with any of the terms and conditions of the contract
✔✔Boilerplate Provisions - ✔✔contain standard language designed to protect you in the
event of a lawsuit
✔✔Material Breach - ✔✔a serious violation of a contract that may void the contract and
will most likely end up in litigation
✔✔Immaterial Breach - ✔✔less serious violation of a contract that does not result in
termination
✔✔Provisions to Limit Risk - ✔✔provisions limit the liability of he contracting parties by
addressing allocation of risk
✔✔What are Recitals? - ✔✔language at the beginning of the contract that provides
background to the contract (who is entering it and why)
✔✔Lump Sum Contract - ✔✔a contract where the contractor agrees to complete the
project for a predetermined specified price. the contractor essentially assumes all of the
risk under this contract agreement because the contractor is responsible for additional
costs associated with unforeseen circumstances
✔✔Unit Price Contract - ✔✔a type of contract where a price per unit is calculated for
each item and the contractor is paid according to the actual quantities used
✔✔Cost Plus Constract - ✔✔a type of contract where the contractor is reimbursed for
the actual cost of labor and materials and is paid a markup fee for overhead and profit
