NASCLA BUSINESS LAW LATEST 2026 TEST PAPER
QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔The two basic laws of construction estimating are - ✔✔low estimates decrease
profits and high estimates decrease volume.
✔✔What MUST be included in an estimate for a job? - ✔✔Materials, labor, equipment,
and overhead costs.
✔✔A contractor should do all of the following when estimating a project EXCEPT -
✔✔assume ideal conditions.
✔✔Which of the following estimating methods is typically used by the architect rather
than the contractor? - ✔✔Conceptual estimate.
✔✔Equipment needs for a project are BEST estimated by - ✔✔: calculating the number
of hours or days it is needed.
✔✔All of the following are considered general conditions that could affect costs directly
associated with a specific project EXCEPT - ✔✔profit margin.
✔✔Costs that relate to construction activity but are NOT easily identifiable for a specific
project are considered - ✔✔project overhead.
✔✔A reason for using a lower than usual profit markup for a specific project could be to
- ✔✔cover company overhead costs.
✔✔An owner hires a construction manager for a project. Which of the following is TRUE
with regard to subcontractors? - ✔✔The subcontractors are prime contractors.
✔✔A contract refers to an insurance agreement that the contractor is REQUIRED to
have. This is considered - ✔✔part of the contract.
✔✔A contractor plans to use materials or methods other than those standard in the
industry. The contractor should - ✔✔: specifically state this in the agreement.
✔✔A contractor is about to sign an agreement with a representative of a corporation.
The contractor should - ✔✔verify that the representative has the authority to bind the
corporation.
✔✔An agreement that calls for a contractor to be paid actual costs for labor and
materials plus a fixed fee for the contractor's overhead and profit is called a - ✔✔cost
plus contract.
, ✔✔What may be covered by an allowance in a contract? - ✔✔Light fixture costs.
✔✔A bid that does NOT specifiy how long it remains open or in effect is considered to
be open for - ✔✔a reasonable amount of time.
✔✔The prime contractor is one who - ✔✔is responsible for the overall construction of
the project.
✔✔The three PRIMARY elements of a contract are - ✔✔offer, acceptance, and
consideration.
✔✔Generally, who is responsible for ensuring that a project meets all zoning
requirements? - ✔✔Project owner.
✔✔The PRIMARY difference between a project manager and a project superintendent
is that the project manager - ✔✔does not directly supervise day-to-day field activities.
✔✔All of the following are advantages of good scheduling EXCEPT - ✔✔reduced
training costs.
✔✔What can be determined by summing the project activities into an overall schedule?
- ✔✔The total resource demand for a project at any given time.
✔✔The BEST business practice for special-ordered materials is to - ✔✔put the order
requirements in writing.
✔✔Which of the following is considered ethical behavior? - ✔✔Failing to disclose one
subcontractor's bid to another.
✔✔An ADVANTAGE of a Critical Path Method (CPM) schedule is it - ✔✔identifies
activities that must be completed before other activities can occur.
✔✔An important factor in ensuring that a schedule is followed is to - ✔✔make sure the
superintendent agrees with it.
✔✔What protects a contractor from risk? - ✔✔Insurance.
✔✔What does a comprehensive general liability insurance policy protect a company
against? - ✔✔An accident at the job site that damages the neighbor's house.
✔✔What type of insurance is needed for a partnership to insure that the business does
NOT go out of business if one partner dies? - ✔✔Key man.
QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔The two basic laws of construction estimating are - ✔✔low estimates decrease
profits and high estimates decrease volume.
✔✔What MUST be included in an estimate for a job? - ✔✔Materials, labor, equipment,
and overhead costs.
✔✔A contractor should do all of the following when estimating a project EXCEPT -
✔✔assume ideal conditions.
✔✔Which of the following estimating methods is typically used by the architect rather
than the contractor? - ✔✔Conceptual estimate.
✔✔Equipment needs for a project are BEST estimated by - ✔✔: calculating the number
of hours or days it is needed.
✔✔All of the following are considered general conditions that could affect costs directly
associated with a specific project EXCEPT - ✔✔profit margin.
✔✔Costs that relate to construction activity but are NOT easily identifiable for a specific
project are considered - ✔✔project overhead.
✔✔A reason for using a lower than usual profit markup for a specific project could be to
- ✔✔cover company overhead costs.
✔✔An owner hires a construction manager for a project. Which of the following is TRUE
with regard to subcontractors? - ✔✔The subcontractors are prime contractors.
✔✔A contract refers to an insurance agreement that the contractor is REQUIRED to
have. This is considered - ✔✔part of the contract.
✔✔A contractor plans to use materials or methods other than those standard in the
industry. The contractor should - ✔✔: specifically state this in the agreement.
✔✔A contractor is about to sign an agreement with a representative of a corporation.
The contractor should - ✔✔verify that the representative has the authority to bind the
corporation.
✔✔An agreement that calls for a contractor to be paid actual costs for labor and
materials plus a fixed fee for the contractor's overhead and profit is called a - ✔✔cost
plus contract.
, ✔✔What may be covered by an allowance in a contract? - ✔✔Light fixture costs.
✔✔A bid that does NOT specifiy how long it remains open or in effect is considered to
be open for - ✔✔a reasonable amount of time.
✔✔The prime contractor is one who - ✔✔is responsible for the overall construction of
the project.
✔✔The three PRIMARY elements of a contract are - ✔✔offer, acceptance, and
consideration.
✔✔Generally, who is responsible for ensuring that a project meets all zoning
requirements? - ✔✔Project owner.
✔✔The PRIMARY difference between a project manager and a project superintendent
is that the project manager - ✔✔does not directly supervise day-to-day field activities.
✔✔All of the following are advantages of good scheduling EXCEPT - ✔✔reduced
training costs.
✔✔What can be determined by summing the project activities into an overall schedule?
- ✔✔The total resource demand for a project at any given time.
✔✔The BEST business practice for special-ordered materials is to - ✔✔put the order
requirements in writing.
✔✔Which of the following is considered ethical behavior? - ✔✔Failing to disclose one
subcontractor's bid to another.
✔✔An ADVANTAGE of a Critical Path Method (CPM) schedule is it - ✔✔identifies
activities that must be completed before other activities can occur.
✔✔An important factor in ensuring that a schedule is followed is to - ✔✔make sure the
superintendent agrees with it.
✔✔What protects a contractor from risk? - ✔✔Insurance.
✔✔What does a comprehensive general liability insurance policy protect a company
against? - ✔✔An accident at the job site that damages the neighbor's house.
✔✔What type of insurance is needed for a partnership to insure that the business does
NOT go out of business if one partner dies? - ✔✔Key man.
