CSLB Contract Law and Dispute Resolution 2

Question 1

Under the California Right to Repair Act (SB 800), a homeowner with a construction defect must first:

Accepted Answer

Notify the contractor and allow an opportunity to repair

Answer

File a lawsuit immediately

Answer

Contact CSLB to file a complaint

Answer

Hire an independent inspector

Question 2

What is 'liquidated damages' in a construction contract?

Accepted Answer

A pre-agreed daily penalty for late project completion

Answer

The contractor's profit margin on a project

Answer

Damages paid when a project exceeds budget

Answer

Insurance proceeds from a site accident

Question 3

A 'time is of the essence' clause in a construction contract means:

Accepted Answer

Completing the work on time is a material contractual obligation

Answer

The contractor must work overtime to finish early

Answer

The project must begin within 30 days of signing

Answer

Only applies to federal projects

Question 4

California's prompt payment penalty for public works projects requires the public agency to pay the prime contractor within how many days of receiving a valid invoice?

Accepted Answer

30 days

Answer

20 days

Answer

45 days

Answer

60 days

Question 5

An 'indemnification clause' in a construction contract typically requires:

Accepted Answer

One party to defend and hold harmless another party from specified claims

Answer

The contractor to guarantee the lowest price

Answer

The owner to pay for all permits

Answer

The contractor to post additional bonding

Question 6

In California, a contractor's claim for extra compensation on a public works project is typically barred if the contractor fails to provide:

Accepted Answer

Timely written notice of the claim as required by the contract

Answer

A performance bond increase

Answer

An updated insurance certificate

Answer

A revised project schedule