LOUISIANA BUSINESS AND LAW
EXAM QUESTIONS WITH CORRECT
SOLUTIONS||100% GUARANTEED
PASS||UPDATED 2026/2027
SYLLABUS||ALREADY GRADED
A+||<<RECENT VERSION>>
When the project is nearing completion, a ________________is created during a
walkthrough to determine any details that still need to be addressed in order to
fully complete the project. - ANSWER ✓ punch list
For a small construction company, who would typically be the project manager? -
ANSWER ✓ prime contractor (general contractor)
What are the steps involved the closing out each project? - ANSWER ✓ Onsite
walk-through to develop a punch list
Contractor provides certificate
Owner makes final payment
All of the above
In order for a contract to become a binding document, it must contain four key
elements which are an offer and acceptance, competent parties, legal purpose and:
- ANSWER ✓ Consideration
The term consideration means that both parties to a contract must be exchanging
something of value - ANSWER ✓ true
What is the term used to identify changes made to contract documents before the
execution of the basic owner contractor agreement? - ANSWER ✓ Addenda
,Oral contracts are valid, but are often difficult to enforce. - ANSWER ✓ true
Terms used in a contract that allow the owner to withhold an agreed upon
percentage of the contract funds until the project is 100% complete is called: -
ANSWER ✓ Retainage
Losses paid by the contractor if the project isn't completed in a specified time
frame written into the contract are called: - ANSWER ✓ liquidated damages
Changes made to the contract documents after the signing of the basic owner-
contractor agreement are called: - ANSWER ✓ Modifications
Change orders are an example of contract modifications. - ANSWER ✓ true
When one contractor assumes all design and construction responsibilities this
contract is known as: - ANSWER ✓ Design/Build
The most important thing for both the contractor and the owner to do before
signing a contract is to read and understand the contract. - ANSWER ✓ true
A contractor is submitting a progress payment request on a $357,000 contract. The
contractor has previously been paid $110,000 and the owner has a 10% retainage
agreement. The project is now 50% complete. How much should the contractor
expect to receive after retainage is applied to the net billing? - ANSWER ✓
$61,650
What type of contract provides the owner with the total price for the project in
advance? - ANSWER ✓ Lump sum
The contractor and the owner agree to set aside a sum of money for electrical
fixtures and plumbing fixtures in the contract budget because the actual cost of
these items are unknown. The set aside money is called: - ANSWER ✓ Allowance
If the contract specifications require 5/8" OSB to sheath the roof and the
contractor used 1/2" OSB to save money, the contractor could be sued for breach
of contract. - ANSWER ✓ true
, If changes to the original contract occur, it is important to write a "Change Order"
and have all parties on the contract sign it before the actual changes are made. -
ANSWER ✓ true
The first and most important element in a contract is offer and acceptance. -
ANSWER ✓ true
If a contractor finds a handwritten provision on a drawing, he should ignore it and
proceed as it was originally directed by the original printed instruction. -
ANSWER ✓ false
Retainage is usually paid with the final payment. - ANSWER ✓ true
The contract should provide for a schedule as to when progress payments will be
disbursed and the amount of money that will be available to the contractor at each
payment. - ANSWER ✓ true
A ____________ is when the terms of the contract have been violated to the
extent that the contract can no longer be valid. - ANSWER ✓ material breach
What type of insurance will protect the contractor for losses due to a fire on his
construction project? - ANSWER ✓ All Risk Builders insurance
General liability insurance will protect the contractor against claims brought by
third parties who are not employed by the contractor. - ANSWER ✓ true
Who pays for workers' compensation insurance? - ANSWER ✓ the employer
A guarantee that a contractor will pay certain subcontractors, laborers, and
material suppliers associated with the project would be known as a________ -
ANSWER ✓ payment bond
Any monies paid out by a surety company will need to be paid back. - ANSWER
✓ true
Equipment in transit, on the premises or at the job site, would typically be covered
by: - ANSWER ✓ Equipment floater policy
EXAM QUESTIONS WITH CORRECT
SOLUTIONS||100% GUARANTEED
PASS||UPDATED 2026/2027
SYLLABUS||ALREADY GRADED
A+||<<RECENT VERSION>>
When the project is nearing completion, a ________________is created during a
walkthrough to determine any details that still need to be addressed in order to
fully complete the project. - ANSWER ✓ punch list
For a small construction company, who would typically be the project manager? -
ANSWER ✓ prime contractor (general contractor)
What are the steps involved the closing out each project? - ANSWER ✓ Onsite
walk-through to develop a punch list
Contractor provides certificate
Owner makes final payment
All of the above
In order for a contract to become a binding document, it must contain four key
elements which are an offer and acceptance, competent parties, legal purpose and:
- ANSWER ✓ Consideration
The term consideration means that both parties to a contract must be exchanging
something of value - ANSWER ✓ true
What is the term used to identify changes made to contract documents before the
execution of the basic owner contractor agreement? - ANSWER ✓ Addenda
,Oral contracts are valid, but are often difficult to enforce. - ANSWER ✓ true
Terms used in a contract that allow the owner to withhold an agreed upon
percentage of the contract funds until the project is 100% complete is called: -
ANSWER ✓ Retainage
Losses paid by the contractor if the project isn't completed in a specified time
frame written into the contract are called: - ANSWER ✓ liquidated damages
Changes made to the contract documents after the signing of the basic owner-
contractor agreement are called: - ANSWER ✓ Modifications
Change orders are an example of contract modifications. - ANSWER ✓ true
When one contractor assumes all design and construction responsibilities this
contract is known as: - ANSWER ✓ Design/Build
The most important thing for both the contractor and the owner to do before
signing a contract is to read and understand the contract. - ANSWER ✓ true
A contractor is submitting a progress payment request on a $357,000 contract. The
contractor has previously been paid $110,000 and the owner has a 10% retainage
agreement. The project is now 50% complete. How much should the contractor
expect to receive after retainage is applied to the net billing? - ANSWER ✓
$61,650
What type of contract provides the owner with the total price for the project in
advance? - ANSWER ✓ Lump sum
The contractor and the owner agree to set aside a sum of money for electrical
fixtures and plumbing fixtures in the contract budget because the actual cost of
these items are unknown. The set aside money is called: - ANSWER ✓ Allowance
If the contract specifications require 5/8" OSB to sheath the roof and the
contractor used 1/2" OSB to save money, the contractor could be sued for breach
of contract. - ANSWER ✓ true
, If changes to the original contract occur, it is important to write a "Change Order"
and have all parties on the contract sign it before the actual changes are made. -
ANSWER ✓ true
The first and most important element in a contract is offer and acceptance. -
ANSWER ✓ true
If a contractor finds a handwritten provision on a drawing, he should ignore it and
proceed as it was originally directed by the original printed instruction. -
ANSWER ✓ false
Retainage is usually paid with the final payment. - ANSWER ✓ true
The contract should provide for a schedule as to when progress payments will be
disbursed and the amount of money that will be available to the contractor at each
payment. - ANSWER ✓ true
A ____________ is when the terms of the contract have been violated to the
extent that the contract can no longer be valid. - ANSWER ✓ material breach
What type of insurance will protect the contractor for losses due to a fire on his
construction project? - ANSWER ✓ All Risk Builders insurance
General liability insurance will protect the contractor against claims brought by
third parties who are not employed by the contractor. - ANSWER ✓ true
Who pays for workers' compensation insurance? - ANSWER ✓ the employer
A guarantee that a contractor will pay certain subcontractors, laborers, and
material suppliers associated with the project would be known as a________ -
ANSWER ✓ payment bond
Any monies paid out by a surety company will need to be paid back. - ANSWER
✓ true
Equipment in transit, on the premises or at the job site, would typically be covered
by: - ANSWER ✓ Equipment floater policy
