CSLB - Law and Business Exam
Home Solicitation Contract/Offer - ✔️✔️Any contract/offer subject to approval for sale,
lease, or rental of goods or services or both made OUTSIDE of the contractor's normal
place of business in the amount of $25 or more.
Buyer may cancel home solicitation contract w/in how many days? - ✔️✔️3 (any time
prior to midnight of 3rd business day)
Notice of Cancellation - ✔️✔️Must be included in Home Solicitation Contract with
statement that is super long, but includes the fact that they can cancel w/in 3 business
days and that the contractor then has 10 days to return any amount paid. Contractor
has 20 days to pick up any materials delivered after which point owner can keep it.
When does Notice of Cancellation's 3-day window not apply? - ✔️✔️Emergency repair
work situations in which owner provides written and dates statements both waiving their
right to cancel w/in 3 days AND describing the emergency situation.
In state of emergency declared by gov't, how many days does customer have to cancel
contract? - ✔️✔️7
In state of emergency declared by gov't, how much can contractor increase prices
without it being considered price gouging? What is the penalty for price gouging? -
✔️✔️10% (for a period of 180 days following declaration).
Misdemeanor punishable by county jail time NTE 1 year, or a fine of not more than $10k
or both.
Service and Repair Contract - ✔️✔️Must include all 4 following criteria: $750 or less;
buyer initiated contract; Contractor doesn't sell buyer goods/services beyond those
necessary to take care of the particular problem; no payment due until work is
completed.
Once signed, owner has no right to cancel
Payment Bond - ✔️✔️Guarantee to the owner that no liens for materials or labor will be
filed against the property.
Contract Bond - ✔️✔️Guarantees both job completion and payment of all labor and
materials.
Bid Shopping - ✔️✔️When prime contractor discloses sub's bid to other subs to get
them to lower their price.
, Bid Peddling - ✔️✔️When a sub whose bid wasn't chosen lowers bid in attempt to
induce contractor to pick them instead.
The Listing Law - ✔️✔️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? - ✔️✔️Must extend deadline by no less than 72 hours.
Reasons public entity can give consent for contractor to substitute a sub. - ✔️✔️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___? -
✔️✔️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? - ✔️✔️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: - ✔️✔️Offer
Acceptance
Consideration
Legality
Home Solicitation Contract/Offer - ✔️✔️Any contract/offer subject to approval for sale,
lease, or rental of goods or services or both made OUTSIDE of the contractor's normal
place of business in the amount of $25 or more.
Buyer may cancel home solicitation contract w/in how many days? - ✔️✔️3 (any time
prior to midnight of 3rd business day)
Notice of Cancellation - ✔️✔️Must be included in Home Solicitation Contract with
statement that is super long, but includes the fact that they can cancel w/in 3 business
days and that the contractor then has 10 days to return any amount paid. Contractor
has 20 days to pick up any materials delivered after which point owner can keep it.
When does Notice of Cancellation's 3-day window not apply? - ✔️✔️Emergency repair
work situations in which owner provides written and dates statements both waiving their
right to cancel w/in 3 days AND describing the emergency situation.
In state of emergency declared by gov't, how many days does customer have to cancel
contract? - ✔️✔️7
In state of emergency declared by gov't, how much can contractor increase prices
without it being considered price gouging? What is the penalty for price gouging? -
✔️✔️10% (for a period of 180 days following declaration).
Misdemeanor punishable by county jail time NTE 1 year, or a fine of not more than $10k
or both.
Service and Repair Contract - ✔️✔️Must include all 4 following criteria: $750 or less;
buyer initiated contract; Contractor doesn't sell buyer goods/services beyond those
necessary to take care of the particular problem; no payment due until work is
completed.
Once signed, owner has no right to cancel
Payment Bond - ✔️✔️Guarantee to the owner that no liens for materials or labor will be
filed against the property.
Contract Bond - ✔️✔️Guarantees both job completion and payment of all labor and
materials.
Bid Shopping - ✔️✔️When prime contractor discloses sub's bid to other subs to get
them to lower their price.
, Bid Peddling - ✔️✔️When a sub whose bid wasn't chosen lowers bid in attempt to
induce contractor to pick them instead.
The Listing Law - ✔️✔️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? - ✔️✔️Must extend deadline by no less than 72 hours.
Reasons public entity can give consent for contractor to substitute a sub. - ✔️✔️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___? -
✔️✔️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? - ✔️✔️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: - ✔️✔️Offer
Acceptance
Consideration
Legality
