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

SB 800 requires homeowners to provide written notice to the builder and give them a statutory opportunity to inspect and repair before filing a lawsuit for construction defects.

Question 2

What is 'liquidated damages' in a construction contract?

Accepted Answer

A pre-agreed daily penalty for late project completion

Answer

Liquidated damages are a pre-agreed, fixed amount per day charged to a contractor for each day a project extends beyond the contractual completion date.

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

A 'time is of the essence' clause makes the completion date a material term of the contract, so that late completion may constitute a material breach.

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

California Public Contract Code §20104.50 requires public agencies to pay undisputed invoices within 30 days of receipt.

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

An indemnification clause obligates one party (usually the contractor) to defend, indemnify, and hold harmless another party from losses arising from specified events such as the contractor's own negligence.

CSLB - Contractors State License Board Practice Test

CSLB - Contractors State License Board Practice Test

CSLB Contract Law and Dispute Resolution 2