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Section 5 of 7

CSLB Project Organization Practice Questions

10 free practice questions on project organization, part of the Contract Requirements and Execution section (about 21% of the exam). Try each one, then open the answer: every choice is explained and the law is quoted.

Questions and answers

  1. Contract Requirements and Execution

    1. A company's license is qualified by a qualifying individual. Under Business and Professions Code section 7068.1, which task is an example of that person's "direct supervision or control"?

    • A. Checking the company's jobs for proper workmanship
    • B. Signing the company's yearly income tax return
    • C. Owning at least 20 percent of the company
    • D. Approving the yearly advertising budget for the company
    Show answer

    Correct answer: A

    • A. Checking the company's jobs for proper workmanship

      Correct answer

      Correct. Section 7068.1 lists checking jobs for proper workmanship as one example of direct supervision or control.

    • B. Signing the company's yearly income tax return

      Signing tax returns is not on the section's list. That list covers supervising construction operations, making technical and administrative decisions, checking workmanship, and supervising on job sites.

    • C. Owning at least 20 percent of the company

      The 20 percent ownership figure in this section relates to qualifying for more than one firm, not to supervision or control.

    • D. Approving the yearly advertising budget for the company

      Approving an advertising budget is not on the list. The decisions that count are technical and administrative decisions made in managing construction activities.

    Explanation

    Section 7068.1 makes the qualifying individual responsible for supervision and control of the company's construction operations. It defines direct supervision or control as supervising construction operations, making technical and administrative decisions, checking jobs for proper workmanship, or supervising on job sites. Signing tax returns and approving an advertising budget are not on that list. The 20 percent ownership figure in this section relates to qualifying for more than one firm, not to supervision.

    Source

  2. Contract Requirements and Execution

    2. On a home improvement job, a subcontractor does poor work. For CSLB discipline, who is responsible for completing the project according to the contract, plans, and specifications?

    • A. Only the subcontractor who did the poor work, not the prime contractor
    • B. The prime (direct) contractor, though the subcontractor can also be disciplined
    • C. Only the home improvement salesperson who sold the job to the owner
    • D. The homeowner, who chose to hire that contractor in the first place
    Show answer

    Correct answer: B

    • A. Only the subcontractor who did the poor work, not the prime contractor

      The prime contractor cannot avoid responsibility by blaming the subcontractor. For administrative discipline, section 7159 makes the prime or direct contractor responsible for completing the project.

    • B. The prime (direct) contractor, though the subcontractor can also be disciplined

      Correct answer

      For administrative discipline, section 7159 makes the prime or direct contractor responsible for completing the project according to the contract, plans, and specifications. CSLB can also discipline a subcontractor who broke the law.

    • C. Only the home improvement salesperson who sold the job to the owner

      Section 7159 puts responsibility for completing the project on the prime or direct contractor, not the salesperson. CSLB may also discipline a salesperson who broke the law, but that does not remove the prime contractor's responsibility.

    • D. The homeowner, who chose to hire that contractor in the first place

      The homeowner is not the one responsible for completing the work. Section 7159 puts that responsibility on the prime or direct contractor.

    Explanation

    Business and Professions Code section 7159 says that for administrative discipline, the prime or direct contractor is responsible for completing the project according to the contract, plans, and specifications. This does not stop CSLB from also disciplining a subcontractor or salesperson who broke the law. So the prime contractor cannot avoid responsibility by blaming the subcontractor. The homeowner is not the one responsible for completing the work.

    Source

  3. Contract Requirements and Execution

    3. Which scheduling item must a home improvement contract include under Business and Professions Code section 7159?

    • A. The exact hour each crew will arrive each day
    • B. A day-by-day work schedule for every subcontractor on the job
    • C. The date of each city inspection on the job
    • D. The approximate date on which the work will be started
    Show answer

    Correct answer: D

    • A. The exact hour each crew will arrive each day

      Section 7159 does not require the contract to list the exact hour each crew will arrive. It requires the approximate date on which work will be started.

    • B. A day-by-day work schedule for every subcontractor on the job

      Section 7159 does not require a day-by-day work schedule for every subcontractor. It requires the approximate start date, a description of what counts as substantial commencement of the work, and the approximate completion date.

    • C. The date of each city inspection on the job

      Section 7159 does not require the contract to list the date of each city inspection. It requires the approximate start date, a description of what counts as substantial commencement of the work, and the approximate completion date.

    • D. The approximate date on which the work will be started

      Correct answer

      Correct. Section 7159 requires a home improvement contract to state the approximate date on which work will be commenced.

    Explanation

    Section 7159 requires the contract to state the approximate start date. It must also describe what counts as substantial commencement (a real start) of the work and give the approximate completion date. The law does not require exact arrival times, a day-by-day schedule, or inspection dates in the contract.

    Sources

  4. Contract Requirements and Execution

    4. A private project's true completion date is March 10. The owner's notice of completion lists March 1 by mistake. The owner records the notice on March 20. Under Civil Code section 8182, is the notice still effective?

    • A. No, because any wrong completion date makes the notice ineffective
    • B. Yes, because the true date was within 15 days of recording
    • C. No, because the owner had to record it within 5 days
    • D. Yes, but only if the direct contractor also signs the notice
    Show answer

    Correct answer: B

    • A. No, because any wrong completion date makes the notice ineffective

      Section 8182 says a wrong completion date does not affect the notice if the true date is 15 days or less before recording. Not every wrong date makes the notice ineffective.

    • B. Yes, because the true date was within 15 days of recording

      Correct answer

      Correct. The true date (March 10) is 10 days before recording (March 20), which is within 15 days, so the wrong date does not affect the notice.

    • C. No, because the owner had to record it within 5 days

      The owner may record within 15 days after completion, not 5 days. Recording on March 20 was within that 15-day window.

    • D. Yes, but only if the direct contractor also signs the notice

      Section 8182 has the owner, not the direct contractor, sign the notice. The notice is effective because the true date is within 15 days of recording.

    Explanation

    Civil Code section 8182 says a wrong date of completion does not affect the notice if the true date of completion is 15 days or less before the date the notice is recorded. The true date (March 10) is 10 days before recording (March 20), so the notice is still effective. The owner also recorded it within the 15 days after completion that the section allows, not 5 days. The section requires the owner, not the direct contractor, to sign the notice.

    Sources

  5. Contract Requirements and Execution

    5. A contractor writes a home improvement contract. Besides the approximate start date, what does Business and Professions Code section 7159 require the contract to say about starting the work?

    • A. What counts as substantial commencement (a real start) of the work
    • B. The exact date and hour the crew will arrive at the site
    • C. The penalty the contractor pays for each day of a late start
    • D. The date the building permit application was filed with the city
    Show answer

    Correct answer: A

    • A. What counts as substantial commencement (a real start) of the work

      Correct answer

      Correct. Section 7159 requires a statement describing what counts as substantial commencement of work, along with the approximate start date.

    • B. The exact date and hour the crew will arrive at the site

      The law asks for an approximate start date, not an exact date and hour of arrival.

    • C. The penalty the contractor pays for each day of a late start

      This part of Section 7159 does not require a daily late-start penalty. It requires a statement of what counts as substantial commencement of work.

    • D. The date the building permit application was filed with the city

      This part of Section 7159 does not require the permit filing date. It requires a statement of what counts as substantial commencement of work.

    Explanation

    Business and Professions Code section 7159 says a home improvement contract must address the start of work. It must include a statement that describes what counts as substantial commencement (a real start) of work under the contract, along with the approximate start date. The law asks for an approximate date, not an exact date and hour. It does not require a daily late-start penalty or the permit filing date in this part of the contract.

    Sources

  6. Contract Requirements and Execution

    6. Two sisters own a lot together as tenants in common (each owns a share). They hired a contractor to build a house on it. Labor stopped 45 days ago and has not restarted. Under Civil Code section 8188, may one sister alone record a notice of cessation as the "owner"?

    • A. No, because every co-owner must sign and verify the notice
    • B. No, because only the direct contractor may record a cessation notice
    • C. Yes, because any one cotenant (co-owner) may act as the owner
    • D. Yes, but only if labor has stopped for at least 60 days
    Show answer

    Correct answer: C

    • A. No, because every co-owner must sign and verify the notice

      Not every co-owner has to sign. When property is held by tenants in common, any one or more of the cotenants may be treated as the owner under section 8188.

    • B. No, because only the direct contractor may record a cessation notice

      Section 8188 lets an owner record a notice of cessation. The direct contractor does not record this notice.

    • C. Yes, because any one cotenant (co-owner) may act as the owner

      Correct answer

      Under section 8188, any one or more cotenants may be treated as the owner. Labor has stopped for 45 days, which is more than the required 30, so one sister may record the notice.

    • D. Yes, but only if labor has stopped for at least 60 days

      Section 8188 requires labor to stop continuously for at least 30 days, not 60. Labor here has stopped for 45 days, which is enough.

    Explanation

    Civil Code section 8188 lets an owner record a notice of cessation after labor has stopped continuously for at least 30 days, and labor here has stopped for 45 days. When property is held by two or more persons as tenants in common, any one or more of the cotenants may be treated as the "owner" under this section. So one sister alone may sign, verify, and record the notice. The direct contractor does not record this notice, and 60 days is not required for a notice of cessation.

    Sources

  7. Contract Requirements and Execution

    7. A customer sues a contractor in small claims court. The contractor appears at the hearing and loses. Under Code of Civil Procedure section 116.710, may the contractor appeal the judgment on the customer's claim?

    • A. No, because only the plaintiff may appeal a small claims judgment
    • B. Yes, but only if the judgment is more than $2,500
    • C. No, because small claims judgments can never be appealed
    • D. Yes, it may appeal to the superior court in that county
    Show answer

    Correct answer: D

    • A. No, because only the plaintiff may appeal a small claims judgment

      This reverses the rule. It is the plaintiff that has no right to appeal its own claim, while the defendant may appeal the judgment on the plaintiff's claim.

    • B. Yes, but only if the judgment is more than $2,500

      The $2,500 figure applies only to an appeal by the defendant's insurer, not to the defendant itself. The contractor may appeal with no dollar condition.

    • C. No, because small claims judgments can never be appealed

      Small claims judgments can be appealed. Section 116.710 lets the defendant appeal the judgment on the plaintiff's claim to the superior court.

    • D. Yes, it may appeal to the superior court in that county

      Correct answer

      Section 116.710 says the defendant, as to the plaintiff's claim, may appeal to the superior court in the county where the case was heard. The contractor was the defendant and appeared, so it may appeal.

    Explanation

    Code of Civil Procedure section 116.710 says the defendant, as to the plaintiff's claim, may appeal the judgment to the superior court in the county where the case was heard. The contractor was the defendant and appeared, so it may appeal. It is the plaintiff, not the defendant, that has no right to appeal its own claim. The $2,500 figure applies only to an appeal by the defendant's insurer, not to the defendant itself.

    Source

  8. Contract Requirements and Execution

    8. A company's qualifier (responsible managing officer) leaves the company. Neither the company nor the qualifier tells the registrar in writing within 90 days. Under Business and Professions Code section 7068.2, what is the result?

    • A. The company pays a late fee and keeps its license active
    • B. Nothing happens if a new qualifier is named within 180 days
    • C. The license is automatically suspended (or the classification removed)
    • D. Only the former qualifier is fined; the license is not affected
    Show answer

    Correct answer: C

    • A. The company pays a late fee and keeps its license active

      Section 7068.2 offers no late fee in place of suspension. Missing the 90-day notice means the license is automatically suspended or the classification removed.

    • B. Nothing happens if a new qualifier is named within 180 days

      The 180-day limit applies only to an approved extension to replace a qualifier, not to the duty to notify the registrar within 90 days.

    • C. The license is automatically suspended (or the classification removed)

      Correct answer

      Correct. If the licensee or the qualifier fails to notify the registrar within 90 days of the disassociation, the license is automatically suspended or the classification removed.

    • D. Only the former qualifier is fined; the license is not affected

      The license is affected: it is automatically suspended or the classification removed. The failure to notify is also grounds for disciplinary action.

    Explanation

    Business and Professions Code section 7068.2 says that if the licensee or the qualifier fails to notify the registrar of the disassociation within 90 days, the license is automatically suspended or the classification is removed. Subdivision (f) also makes this failure grounds for disciplinary action. The section offers no late fee in place of suspension. The 180-day limit applies only to an approved extension to replace a qualifier, not to the duty to give notice.

    Sources

  9. Contract Requirements and Execution

    9. How long must a contractor keep records of its contracts, receipts, and disbursements for a project available for inspection by the registrar?

    • A. At least 1 year after the project is completed
    • B. At least 3 years after the project is completed
    • C. At least 5 years after the project is completed
    • D. At least 7 years after the project is completed
    Show answer

    Correct answer: C

    • A. At least 1 year after the project is completed

      1 year is far too short. Section 7111 requires the records to be available for at least five years after the project is completed.

    • B. At least 3 years after the project is completed

      3 years is too short. Section 7111 requires at least five years after the project is completed.

    • C. At least 5 years after the project is completed

      Correct answer

      Correct. Section 7111 requires a licensee to keep records of its contracts, receipts, and disbursements available to the registrar for at least five years after the project is completed.

    • D. At least 7 years after the project is completed

      7 years is not the rule in section 7111. The minimum the section sets is five years after the project is completed.

    Explanation

    Business and Professions Code section 7111 requires a licensee to make and keep records of all contracts, documents, receipts, and disbursements for its work as a contractor. The records must be available for the registrar to inspect for at least five years after the project is completed. Failing to keep them, or refusing a written request to see them, is a cause for disciplinary action. The 1-year, 3-year, and 7-year periods are not the rule in this section.

    Sources

  10. Contract Requirements and Execution

    10. A contractor's work willfully departs from accepted trade standards for good workmanship. Under Business and Professions Code section 7109, when is this NOT a cause for discipline?

    • A. When the owner did not notice the problem at the time
    • B. When the departure followed plans and specifications from an architect
    • C. When the work cost less than the contract price
    • D. When a subcontractor, not the contractor, did the work
    Show answer

    Correct answer: B

    • A. When the owner did not notice the problem at the time

      Whether the owner noticed the problem does not matter under section 7109. The only exception is a departure that followed plans and specifications prepared by or under the direct supervision of an architect.

    • B. When the departure followed plans and specifications from an architect

      Correct answer

      Section 7109 makes a willful, material departure from accepted trade standards a cause for discipline unless it followed plans and specifications prepared by or under the direct supervision of an architect. That is the one exception.

    • C. When the work cost less than the contract price

      A lower cost is not an exception in section 7109. The only exception is a departure that followed an architect's plans and specifications.

    • D. When a subcontractor, not the contractor, did the work

      Using a subcontractor is not an exception in section 7109. The only exception is a departure that followed plans and specifications prepared by or under the direct supervision of an architect.

    Explanation

    Section 7109 says a willful departure in any material respect from accepted trade standards is a cause for disciplinary action. The one exception is when the departure followed plans and specifications prepared by or under the direct supervision of an architect. Whether the owner noticed does not matter. A lower cost and the use of a subcontractor are not exceptions either.

    Source

Keep studying

Read the Section 5 study notes: Contract Requirements and Execution

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