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joe > Legal > Flashcards

Legal Flashcards

1
Q

When should you let your attorney see a construction contract?
A. Before you let the client see the contract
B. After the contract is prepared but before you sign it
C. After the building permit is obtained
D. After the contract is signed by you and the client

A

B. After the contract is prepared but before you sign it

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2
Q

Which is the most correct statement as to what must be included in every home improvement contract?
A. Notice of right to cancel
B. Contractor’s license number
C. Truth-in-lending notice
D. Name of the project

A

B. Contractor’s license number

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3
Q

Which is NOT a requirement on a home improvement contract?
A. A notice, in at least 10 point print, in close proximity to the signature, and a statement that the owner has a right to require a performance and payment bond

B. The name and home addresses of all the personnel listed on the license

C. An approximate date when work will begin and be substantially completed

D. A description of the work to be done and materials and equipment to be used or installed

A

B. The name and home addresses of all the personnel listed on the license

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4
Q

When a home improvement contract is signed, the contractor must substantially begin work within ____ days of the date specified in the contract?

A. 5
B. 10
C. 15
D. 20

A

D. 20

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5
Q

Which is true concerning home improvement sales persons?
A. They must register with the Registrar’s office and may work for only one contractor at a time
B. Anyone who sells home improvement contracts for a licensed contractor outside the contractor’s normal place of business is required to be registered with the Attorney General’s office
C. They must be at least 18 years of age. There are no residency or educational requirements
D. They may begin to negotiate home improvement contracts as soon as they have filled out the appropriate application and paid the required fees

A

C. They must be at least 18 years of age. There are no residency or educational requirements

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6
Q

Judy, a contractor, employs Sam as her registered home improvement salesperson.
Sam meets with Mr. and Mrs. Jones and negotiates home improvement work that totals $350.
When Sam returns to his boss and tells him of the verbal contract, his employer says she will not work for the contracted price. The Contractors’ License Law states:

A. The contractor is required by law to abide by the verbal agreement since verbal home improvement contracts under $500 are binding

B. The contractor is not bound by a verbal agreement

C. The contractor may cancel a home improvement contract that she did not negotiate

D. The contractor is not bound by the contract since all home improvement contracts must be in writing

A

A. The contractor is required by law to abide by the verbal agreement since verbal home improvement contracts under $500 are binding

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7
Q

Which type of contract can be cancelled by a consumer?
A. Sub contract
B. Home solicitation contract which involves fencing, burglar alarm, carpentry and texture coating
C. Prime construction contract
D. Home improvement contract involving free standing bookcases, rugs and window air conditioner

A

B. Home solicitation contract which involves fencing, burglar alarm, carpentry and texture coating

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8
Q
  1. A consumer may cancel a home solicitation contract at any time prior to midnight of the_business day after the date of the transaction.
    a. 1 st
    b. 2nd
    c. 3rd
    d. 5th
A

c. 3rd

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9
Q

If an owner cancels a home solicitation contract on March 20, by what date must the contractor return the down payment?
a April 23
b. March 30
c. April 1
d. April 20

A

b. March 30

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10
Q

A notice canceling a home solicitation contract becomes effective:

a. When the written notice is deposited in the mail
b.When signed by the owner
c. The day the owner cancels by telephone
d. When the contractor receives it

A

a. When the written notice is deposited in the mail

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11
Q

An “emergency” job has been contracted for between the owner and a contractor. The materials have been purchased. If the owner decides to cancel, who is responsible for the materials?
a.The owner
b. The contractor
c. The supplier
d. No one

A

a. The owner

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12
Q

Which of the following is NOT true concerning a joint- control addendum to a contract?
a. It prevents the contractor from being paid more than the value of the work

b. reateguands the consumer’s property from liens by requring contractors to
supply lien releases

c. It analyzes the contract, plans, breakdown of costs and prepares an account from which funds will be disbursed

d. It is controlled by the Contractors State License Board

A

d. It is controlled by the Contractors State License Board

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13
Q

Who must sign a joint-control addendum to a home improvement contract?
a. Contractors only
b. Owner and contractor
c. Owner, contractor and Notary Public
d. Owner, contractor and joint control officer

A

d. Owner, contractor and joint control officer

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14
Q

When a joint-control addendum is used, which of the following does NOT have to be included in a home improvement contract?
a. Owner’s
signature
b. Schedule of payments
c. Notice to Owner
d. License number of the contractor

A

b. Schedule of payments

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15
Q

Which of the following is true concerning surety bonds?
a. They are required in order to obtain a contractor’s license number
b. They are valued at $7,500 for all contractors
c. They are required in case you accidentally damage the customer’s property
d. All of the above

A

a. They are required in order to obtain a contractor’s license number

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16
Q

Of the following, who will NOT stand to benefit from a contractor’s bond?
a. Any client damaged as a result of regulation violations by the contractor
b. Any person damaged due to fraud on the part of the contractor
c. Any subcontractor damaged due to an accident
d. Any employee damaged by the contractor’s failure to pay wages

A

c. Any subcontractor damaged due to an accident

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17
Q

Which of the following is NOT eligible to receive benefits from a contractor’s license bond?
a. A customer who was defrauded by the contractor
b. A subcontractor involved in an accident on a job site
c. An employee who was not paid wages that weredue
d. A homeowner with a valid claim that the contractor abandoned the job

A

b. A subcontractor involved in an accident on a job site

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18
Q

Which bond guarantees that a contractor’s work will be free of defects in materials and workmanship for a specific period of time?
a Performance bond
b. Licensure bond
c. Satisfaction bond
d. Maintenance bond

A

d. Maintenance bond

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19
Q

Match the correct bond with what it does?
a. Performance bonds guarantee the project is completed according to
plans and specs
b. Payment bonds guarantee payment of all labor and material
c. Contract bonds guarantee both job completion and payment of all labor and material
d. All of the above are true

A

d. All of the above are true

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20
Q

For most contractors, the required bond needed to obtain a contractor’s
license is:
A.$2500
B. $5,000
C.$7,500
D.$12,500

A

D.$12,500

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21
Q

What could the Contractor License Board NOT accept as an alternative to filing a license bond?
a Cash deposit
b.Certificate of deposit
c. U.S. Government bearer-bond
d. Blue-chip stocks

A

d. Blue-chip stocks

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22
Q

Bonds are often required on larger jobs. A bond company will
charge approximately.
% of its fee based on the contract price.

a. 1-2
b. 10
c. 15
d. 20

A

a. 1-2

23
Q

Where would a contractor obtain a surety bond?
a Bank
b. Credit Union
c. Insurance Agent
d. Contractors State License Board

A

c. Insurance Agent

24
Q

When should a contractor renew the contractor’s license number?
a The day it expires
b. 10 days before it expires
c. 30 days before it expires
d. Within 30 days after it expires

A

c. 30 days before it expires

25
Q

What is the best way to ensure that your license bond remains in effect after its
expiration date (in other words, what is the best way to avoid a period of suspension)?

a. Renew the bond 7 days after expiration
b. Make sure the new bond date is the same as the cancelled bond date
c. Make sure the new bond date is after the cancelled bond date
d. Buy a second bond that overlaps coverage

A

b. Make sure the new bond date is the same as the cancelled bond date

26
Q

Which of the following needs a contractor’s license?
a. Moving a mobile home
b. Owner-builder
c. Registered architect and/or engineer
d. Installation of finished products that do not become a permanent fixture to the property

A

a. Moving a mobile home

27
Q

Which of the following individuals will be required to obtain a contractor’s license?
a. A mill worker who constructs cabinets
b. A civil service repairman
c. An individual who installs, repairs or monitors a fire alarm system
d. A pool supply company

A

c. An individual who installs, repairs or monitors a fire alarm system

28
Q

General building contractors with a “B” classification cannot do:
a. Remodeling which includes carpentry, drywall, and asbestos removal
b. The entire construction project from start to finish including landscaping
c. Remodeling a house
d. Framing

A

a. Remodeling which includes carpentry, drywall, and asbestos removal

29
Q

A client wants the house painted and carpet installed. What license(s) is/are required for this work?
a. painting, flooring and general building
b. painting, flooring
c. general building
d. painting

A

b. painting, flooring

30
Q

How many times can you take the contractor’s license exam before your original application is voided? (Assuming you conform to scheduling)
a. As many times as necessary in one year
b. Three times
c. Five times
d. An unlimited number oftimes

A

b. Three times

31
Q

When must a contractor show proof of licensure?
a. When the contractor sends advertisements in the mail
b. In each county or city when pulling permits
c. Only when asked by an inspector or other government official
d. When you go to a customer’s house

A

b. In each county or city when pulling permits

32
Q

If a contractor forgets to renew his or her license on time, the expired license may be renewed anytime within____ years after its expiration without reapplying for a license and fulfilling the exam
or waiver requirements again.

a.1 year
b. 2 years
c. 3 years
d. 5 years

A

d. 5 years

33
Q

Which is NOT a requirement to renew your license?
a Be sure your bond is current and on file with the Contractors State License
Board
b. Return the renewal notice with the appropriate fees
c. Notify the Registrar’s office of the name of your worker’s compensation insurance company if you have employees
d. Repeat the open-book asbestos exam

A

d. Repeat the open-book asbestos exam

34
Q

Harry and Linda have done business as a licensed partnership. If Linda is a general partner, but not qualified, what must she do to get an individual license?

a.If Linda was listed as a partner on the license and was actively engaged in the business for at least five of the past seven years, she may apply for a waiver of the exam

b. If Linda applies for an individual license, the partnership license must be inactivated

c. Linda is not entitled to apply for an individual license

d.General partners may automatically receive an individual license if they are listed on the partnership license

A

a.If Linda was listed as a partner on the license and was actively engaged in the business for at least five of the past seven years, she may apply for a waiver of the exam

35
Q

The qualifying RME for a construction firm must work atleast:
a. 32 hours per week or 80% of the work week
b. 30 hours per week or 70% of the work week
c. 24 hours per week or 65% of the work week
d. 12 hours per week or 51% of the work week

A

a. 32 hours per week or 80% of the work week

36
Q

How many companies can an RME qualify at one time?
a. Only one
b. Two
c. Three
d. As many as he is able

A

a. Only one

37
Q

Jim wishes to qualify for more than one active license at a time. According to the Contractors’ License Law, he mustown at least of the equity for each business where he serves as the qualifying individual.
a. 5%
b. 20%
c. 50%
d. 100%

A

b. 20%

38
Q

Bob Smith is the RME of XYZ Construction Co., where he works all week. His own construction business, under a different name and license number, builds decks on weekends. Is this an acceptable practice for Bob?
a. Yes, Bob may qualify as many licenses as he desires
b. Yes, as long as he works more than 32 hours as an RME
c. No, Bob must take another qualifying exam for the second license
d. No, Bob may qualify only XYZ Co.’s license in this case

A

d. No, Bob may qualify only XYZ Co.’s license in this case

39
Q

Where must a contractor include the “Notice to Owner?”
a. In all home improvement contracts
b. In all home improvement contracts over $500
c. In all contracts for government projects d. In home solicitation contracts only

A

b. In all home improvement contracts over $500

40
Q

The Notice to Owner is given to inform theowner:
a. When work will begin and end
b.That you are going to improve the property
c. Know the property can be liened
d. Know that a lien has been filed

A

c. Know the property can be liened

41
Q

Who is least affected by the Notice to Owner?

a. The owner
b. The lender
c. The sub-contractors
d. The employees of the prime

A

b. The lender

42
Q

To who is the Preliminary Notice not sent?
a. The owner
b. The lender
c. The contractor
d. The sub-contractors

A

d. The sub-contractors

43
Q

Which of the following statements is NOT true regarding the Preliminary Notice?
a. All sub-contractors must use the Notice on all jobs
b. A copy of the Notice is sent to the owner, prime and the lender
c. The Notice must include the dollar amount of the sub-contractor’s portion of the job
d.The Notice need only be used on jobs in excess of $1000

A

d.The Notice need only be used on jobs in excess of $1000

44
Q

Which of the following is required in order to file a mechanics’ lien?
a. Name of the owner and the amount of the claim
b. The kind of labor furnished and the person who furnished the
c. A description of the site sufficient for identification
d. All of the above

A

d. All of the above

45
Q

Who cannot file a mechanics’ lien?
a. An unlicensed contractor who has done a job for $500
b.A general contractor with wage earners
c. Subcontractors and material suppliers
d. All contractors may file a lien

A

a. An unlicensed contractor who has done a job for $500

46
Q

Which is true of a mechanics’ lien?
a. It is filed at the county clerk’s office in the county where the
contractor lives
b. It can be filed by any contractor at any time
c. It is a claim that can be made against private or public land to force payment
d. None of the above

A

d. None of the above

47
Q

When does Sam, a licensed contractor who has a contract with a customer to build a home, have lien rights?
a. Only if the rights were explained upfront
b. Only if the rights are printed on the contract
c. Only when he has finished the job
d. Sam automatically has lien rights

A

d. Sam automatically has lien rights

48
Q

Which is true concerning a stop notice?
a. It is a lien on funds that obligates the person holding construction funds to withhold sufficient funds to satisfy the amount in the stopnotice

b. Is used on public and private jobs

c. Must be delivered to the owner personally or left at the owner’s residence with some person in charge or delivered to the architect

d. All of the above

A

d. All of the above

49
Q

If a subcontractor were to serve the owner with a stop notice, the most likely reason would be to:
a.Inform the owner that the sub has not been paid by the prime
b. inform the owner that the property will be liened
c. Notify the owner that a lien will be filed
d. Notify the owner that the sub has completed his or her part of the job

A

a.Inform the owner that the sub has not been paid by the prime

50
Q

A Stop Notice is the only single means to force payment on a public-works job. You may not lien public property, so in the event a contractor needs to serve a Stop Notice on a public-works job, he should serve it to the:
a. Lender
b. Prime contractor
c. Awarding authority
d. Division of Payments

A

c. Awarding authority

51
Q

If a Stop Notice is given on a private home construction job, it is given to the lender with a bond in the amount of:
a 1-1/4 times the amount of the actual claim
b.10% of the amount of the claim
c. $7500
d. 1-1/2 times the amount of the actual claim

A

a 1-1/4 times the amount of the actual claim

52
Q

Mr. Garcia learns that a lien has been placed on his property.
He believes that the lien is invalid and unfairly clouding the title of his home. How can he release the property from the lien?
a. A waiver-release bond can be issued if Mr. Garcia
pays the premium
b. He can purchase a bond in the amount of one and a half times the amount of the lien
c. There is nothing he can do
d. His only recourse is to go to court

A

b. He can purchase a bond in the amount of one and a half times the amount of the lien

53
Q

If a contractor commits a serious violation of the contractor’s laws, the Registrar can:

a. Require the contractor to make restitution to the owner
b. Require the contractor to correct the project
c. Fine the contractor up to $2000
d. All of the above

A

d. All of the above

54
Q

All of the following are causes for disciplinary action EXCEPT:
a. Allowing your license to be used by an unlicensed contractor

b. Entering into a contract with a contractor who is not licensed

c. During bankruptcy, settling obligations, incurred as a contractor, for less than the full amount owed

d. Willful, deliberate failure to pay suppliers when they are due

A

c. During bankruptcy, settling obligations, incurred as a contractor, for less than the full amount owed

joe (6 decks)

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