CSLB CONTRACTOR'S LAW & BUSINESS Exam
2025–2026 Accurate Real Exam Questions and
Verified Correct Answers JUST RELEASED
What is the most likely reason to lose a bid?
A. 10% added to profit.
B. Vague specifications
C. Prices from subs were not exact.
D. Costs of materials were not obtained. - answer>>>Vague specifications.
Which of the following procedures BEST ensures error-free bids?
A. Working with an attorney
B. Having another person draft the bid
C. Discussing details of the bid with the supplier
D. Rechecking the bid before submitting it to the client - answer>>>Rechecking the bid
before submitting it to the client.
A contractor, on his own initiative, changed the design of a building and carried out the
change. The owner rejected the change and stated that the building has lost market
value. If the owner takes the contractor to court and obtains a favorable judgment, the
owner is: - answer>>>Due the cost of repairs or the loss of market value.
When a subcontractor does work on a public works contract, the public agency considers
the subcontractor to be: - answer>>>A subcontractor of the prime contractor.
For which of the following would you not obtain a short term loan?
,A. Wages
B. Bid Bond
C. Job materials
D. Office rent - answer>>>Office rent.
Construction or alteration of any building, highway, excavation, or other structure in the
State of California requires a contractor's license if the total cost of one or more contracts
on the project is: - answer>>>$500 or more in labor and materials.
A contractor meets Mr. Jones at his home to discuss remodeling. The contractor and Mr.
Jones sign a contract that includes a three-day cancellation form. After the contractor
leaves, Mr. Jones decides not to have the work done. Instead of using the cancellation
form, Mr. Jones sends the contractor a letter by first-class mail stating that he is canceling
the contract. Is Mr. Jones' cancellation effective? - answer>>>Yes. Mr. Jones' letter does
cancel the contract because it indicates his intention not to be bound by the contract.
As part of the safety training process, contractors's supervisors are required to conduct
"toolbox" or "tailgate" safety meetings. How often must these meetings be held. -
answer>>>At least once every ten working days.
Which of the following statements about home improvement laws is ("most correct")
A. A subcontractor may give a salesperson a bonus.
B. A general contractor may give a salesperson a bonus.
C. A subcontractor may not give the general contractor a bonus.
D. The homeowner may give the salesperson a bonus. - answer>>>The homeowner may
give the sales person a bonus.
,As required by the Immigration Reform and Control Act, all employees hired on or after
November 7, 1986 must complete what form to verify their employment eligibility
status? - answer>>>I-9
A contractor entered into a home improvement contract for more than $500 with Mrs.
Swenson to remodel her kitchen and bathroom. The contract calls for a down payment
before work is to begin. According to the Business and Professions Code, how much may
the contractor accept from Mrs. Swenson as down payment for the work? -
answer>>>The down payment is limited to $1,000 or 10% of the total price, which ever is
less.
Some counties have an additional sales tax added to the base rate. Which of the
following is a correct statement regarding this additional tax?
A. This additional tax does not apply to contractors.
B. You do not have to pay this additional tax if your home office is in another county.
C. You may pay the additional tax charged in your county if the rate is lower than the
county where the materials were purchased.
D. You must pay the additional tax in the county where the materials were purchased. -
answer>>>You must pay the additional tax in the county where the materials were
purchased.
A notice of completion must be recorded within: - answer>>>A notice of completion must
be recorded within 10 days after work is completed.
Insured employers must report every work-related illness or injury to their workers'
compensation carrier within _____ of the incident.
, A. 24 hours
B. 2 days
C. 5 days
D. 10 days - answer>>>Any work related illness or injury must be reported to the workers
compensation insurance company within 5 days.
Which of the following may NOT be deducted from an employee's paycheck?
A. SDI
B. FICA
C. Medicare Tax
D. Workers' compensation insurance premiums - answer>>>Workers compensation
insurance premiums
Who pays FICA? - answer>>>For FICA, it is 50% the employer and 50% the employee.
If, during excavation, you unearth human remains or burial artifacts at a construction
site, what should you do? - answer>>>Stop work immediately at that site and any there
nearby area that may have remains.
Who would be held responsible if a contractor completes a project according to plans and
later discovers that there is a building code violation? - answer>>>Both the contractor
and the architect would be liable.
A(n) _____ summarizes revenues, cost of sales, and operating expenses over a period of
time.
A. Profit plan
B. Balance sheet
2025–2026 Accurate Real Exam Questions and
Verified Correct Answers JUST RELEASED
What is the most likely reason to lose a bid?
A. 10% added to profit.
B. Vague specifications
C. Prices from subs were not exact.
D. Costs of materials were not obtained. - answer>>>Vague specifications.
Which of the following procedures BEST ensures error-free bids?
A. Working with an attorney
B. Having another person draft the bid
C. Discussing details of the bid with the supplier
D. Rechecking the bid before submitting it to the client - answer>>>Rechecking the bid
before submitting it to the client.
A contractor, on his own initiative, changed the design of a building and carried out the
change. The owner rejected the change and stated that the building has lost market
value. If the owner takes the contractor to court and obtains a favorable judgment, the
owner is: - answer>>>Due the cost of repairs or the loss of market value.
When a subcontractor does work on a public works contract, the public agency considers
the subcontractor to be: - answer>>>A subcontractor of the prime contractor.
For which of the following would you not obtain a short term loan?
,A. Wages
B. Bid Bond
C. Job materials
D. Office rent - answer>>>Office rent.
Construction or alteration of any building, highway, excavation, or other structure in the
State of California requires a contractor's license if the total cost of one or more contracts
on the project is: - answer>>>$500 or more in labor and materials.
A contractor meets Mr. Jones at his home to discuss remodeling. The contractor and Mr.
Jones sign a contract that includes a three-day cancellation form. After the contractor
leaves, Mr. Jones decides not to have the work done. Instead of using the cancellation
form, Mr. Jones sends the contractor a letter by first-class mail stating that he is canceling
the contract. Is Mr. Jones' cancellation effective? - answer>>>Yes. Mr. Jones' letter does
cancel the contract because it indicates his intention not to be bound by the contract.
As part of the safety training process, contractors's supervisors are required to conduct
"toolbox" or "tailgate" safety meetings. How often must these meetings be held. -
answer>>>At least once every ten working days.
Which of the following statements about home improvement laws is ("most correct")
A. A subcontractor may give a salesperson a bonus.
B. A general contractor may give a salesperson a bonus.
C. A subcontractor may not give the general contractor a bonus.
D. The homeowner may give the salesperson a bonus. - answer>>>The homeowner may
give the sales person a bonus.
,As required by the Immigration Reform and Control Act, all employees hired on or after
November 7, 1986 must complete what form to verify their employment eligibility
status? - answer>>>I-9
A contractor entered into a home improvement contract for more than $500 with Mrs.
Swenson to remodel her kitchen and bathroom. The contract calls for a down payment
before work is to begin. According to the Business and Professions Code, how much may
the contractor accept from Mrs. Swenson as down payment for the work? -
answer>>>The down payment is limited to $1,000 or 10% of the total price, which ever is
less.
Some counties have an additional sales tax added to the base rate. Which of the
following is a correct statement regarding this additional tax?
A. This additional tax does not apply to contractors.
B. You do not have to pay this additional tax if your home office is in another county.
C. You may pay the additional tax charged in your county if the rate is lower than the
county where the materials were purchased.
D. You must pay the additional tax in the county where the materials were purchased. -
answer>>>You must pay the additional tax in the county where the materials were
purchased.
A notice of completion must be recorded within: - answer>>>A notice of completion must
be recorded within 10 days after work is completed.
Insured employers must report every work-related illness or injury to their workers'
compensation carrier within _____ of the incident.
, A. 24 hours
B. 2 days
C. 5 days
D. 10 days - answer>>>Any work related illness or injury must be reported to the workers
compensation insurance company within 5 days.
Which of the following may NOT be deducted from an employee's paycheck?
A. SDI
B. FICA
C. Medicare Tax
D. Workers' compensation insurance premiums - answer>>>Workers compensation
insurance premiums
Who pays FICA? - answer>>>For FICA, it is 50% the employer and 50% the employee.
If, during excavation, you unearth human remains or burial artifacts at a construction
site, what should you do? - answer>>>Stop work immediately at that site and any there
nearby area that may have remains.
Who would be held responsible if a contractor completes a project according to plans and
later discovers that there is a building code violation? - answer>>>Both the contractor
and the architect would be liable.
A(n) _____ summarizes revenues, cost of sales, and operating expenses over a period of
time.
A. Profit plan
B. Balance sheet
