Contract and Lien Laws Flashcards
6 cards from real CSLB practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Contract and Lien Laws flashcards as text
What type of bond protects a project owner if the general contractor fails to complete the project?
Answer: Performance bond
A performance bond guarantees the contractor will complete the project, allowing the surety to step in and complete the work or compensate the owner if the contractor defaults.
On California public works projects, a payment bond protects whom?
Answer: Subcontractors and material suppliers who are not paid
Payment bonds on public works protect unpaid subcontractors and material suppliers since public property cannot be liened.
What is the purpose of a Preliminary Notice sent by a subcontractor on a California private construction project?
Answer: To inform the owner that the sub is working on the project and preserve lien rights
The Preliminary Notice informs the owner and construction lender that the subcontractor is providing work, preserving their right to later file a mechanics' lien.
In California construction contracts, what does an indemnification clause typically require the contractor to do?
Answer: Hold the owner harmless from claims, losses, or damages arising from the contractor's work
Indemnification clauses require the contractor to defend, indemnify, and hold the owner harmless from claims or damages resulting from the contractor's operations.
What is a 'change order' and when is it legally required in California?
Answer: A written authorization for changes to the scope, price, or schedule, required in writing for home improvement contracts
Change orders must be in writing for home improvement contracts under BPC Section 7159, documenting scope changes, price adjustments, and schedule impacts.
Under California construction law, what are 'liquidated damages' in a contract?
Answer: A pre-agreed amount the contractor pays the owner for each day of delay beyond the contract completion date
Liquidated damages are a pre-determined daily penalty amount for project delays, agreed upon at contract signing when actual damages would be difficult to calculate.