C27 License Business Practices and Contract Law 2 — Questions and Answers
Question 1: What is the purpose of a Preliminary Notice (Notice to Owner) in California construction law?
- To inform the owner of project schedule delays
- To preserve lien rights for subcontractors and material suppliers who lack a direct contract with the owner (Correct answer)
- To notify the local building department of permit requirements
- To provide the owner with a formal warranty for completed work
Correct answer: To preserve lien rights for subcontractors and material suppliers who lack a direct contract with the owner
A Preliminary Notice preserves the right of subcontractors and material suppliers to file a mechanic's lien if they are not paid, since they have no direct contract with the property owner.
Question 2: How many days does a subcontractor have to file a mechanic's lien in California after the property owner records a Notice of Completion?
- 30 days (Correct answer)
- 60 days
- 90 days
- 120 days
Correct answer: 30 days
California Civil Code requires subcontractors and material suppliers to file a mechanic's lien within 30 days after the owner records a Notice of Completion.
Question 3: What is 'indemnification' in the context of a landscaping contractor's contract?
- A warranty guaranteeing plant survival for a specified period
- One party's contractual agreement to protect another party from specified losses or legal liability (Correct answer)
- A payment schedule structured around project milestones
- A list of services explicitly excluded from the contract scope
Correct answer: One party's contractual agreement to protect another party from specified losses or legal liability
Indemnification is a contractual obligation where one party agrees to cover losses, claims, or legal costs incurred by the other party under specified circumstances.
Question 4: Which agency licenses and has disciplinary authority over C-27 landscaping contractors in California?
- California Department of Consumer Affairs directly
- Contractors State License Board (CSLB) (Correct answer)
- California Department of Food and Agriculture
- State Water Resources Control Board
Correct answer: Contractors State License Board (CSLB)
The Contractors State License Board (CSLB) is the California agency responsible for licensing, regulating, and disciplining all contractors, including C-27 landscaping contractors.
Question 5: What must appear in all advertising by a California licensed contractor?
- Only a business phone number
- The contractor's CSLB license number (Correct answer)
- A business license number issued by the city
- The contractor's insurance certificate number
Correct answer: The contractor's CSLB license number
California law requires licensed contractors to display their CSLB license number in all forms of advertising, including websites, business cards, vehicles, and signs.
Question 6: What is the purpose of a change order in a landscaping contract?
- To formally terminate a contract before project completion
- To document and authorize agreed-upon changes to the original scope, price, or timeline (Correct answer)
- To change the payment method from check to credit card
- To transfer the contract obligations to a different contractor
Correct answer: To document and authorize agreed-upon changes to the original scope, price, or timeline
A change order is a written document signed by both parties that modifies the original contract to reflect mutually agreed changes in work scope, cost, or schedule.
C27 License Business Practices and Contract Law 2
What is the purpose of a Preliminary Notice (Notice to Owner) in California construction law?