Licensed Electrical Contractor Business and Law Practices 3

Question 1

A contractor receives a change order that increases the project scope. The contractor should:

Accepted Answer

Execute a written change order signed by both parties before starting the additional work

Answer

Proceed with the work and bill extra at project completion

Answer

Refuse all change orders not in the original contract

Answer

Notify OSHA before proceeding with any scope change

Question 2

Under IRS rules, which factor most strongly indicates a worker is an employee rather than an independent contractor?

Accepted Answer

The business controls how and when the work is performed

Answer

The worker uses their own tools

Answer

The worker invoices the company monthly

Answer

The worker works for multiple clients simultaneously

Question 3

Which lien release form confirms that a contractor has received partial payment and waives lien rights only for the amount paid to date?

Accepted Answer

Unconditional partial lien waiver

Answer

Unconditional final lien waiver

Answer

Conditional partial lien waiver

Answer

Final lien release and indemnity

Question 4

When calculating a project bid, 'overhead' typically includes which of the following?

Accepted Answer

Office rent, insurance premiums, and administrative salaries

Answer

The cost of wire and conduit for the specific job

Answer

Wages paid to electricians working directly on the project

Answer

Permit fees charged for the specific project

Question 5

A contractor who discovers a latent defect in an existing structure that creates a safety hazard should first:

Accepted Answer

Immediately notify the owner and stop work in the affected area if necessary

Answer

Continue work and document the defect in the project file

Answer

File a complaint with the state contractor licensing board

Answer

Require the owner to sign a liability waiver before proceeding

Question 6

What is the primary purpose of a certificate of occupancy (CO) in relation to an electrical contractor's work?

Accepted Answer

It confirms the building meets all code requirements and is safe for occupancy

Answer

It authorizes the contractor to begin electrical installations

Answer

It substitutes for a final inspection by the electrical inspector

Answer

It transfers liability for defects from the contractor to the owner

Question 7

A sole proprietorship differs from a corporation primarily in that:

Accepted Answer

The owner has unlimited personal liability for business debts

Answer

Sole proprietors cannot hire employees

Answer

Sole proprietors cannot obtain business licenses

Answer

Taxes are filed using a corporate return (Form 1120)