Licensed Electrical Contractor Business and Law Principles 3

Question 1

An electrical contractor is required to carry general liability insurance primarily to protect against:

Accepted Answer

Bodily injury or property damage caused to third parties during operations

Answer

Theft of tools from the job site

Answer

Errors in the contractor's business tax filings

Answer

Employee injuries sustained while working

Question 2

Which document legally transfers ownership of a completed construction project from the contractor to the owner?

Accepted Answer

Certificate of Substantial Completion

Answer

Final waiver of lien

Answer

Notice of Commencement

Answer

Certificate of Occupancy

Question 3

Under IRS rules, a worker classified as an independent contractor (vs. employee) means the employer is NOT required to:

Accepted Answer

Withhold federal income taxes and pay payroll taxes on their behalf

Answer

Pay the worker at all

Answer

Provide a safe work environment

Answer

Follow contract terms agreed upon in writing

Question 4

What is the 'right of first refusal' in the context of a contractor's relationship with a supplier?

Accepted Answer

The supplier's right to match any competing bid before the contractor switches suppliers

Answer

The contractor's right to reject defective materials before paying

Answer

The contractor's right to refuse change orders from the owner

Answer

The customer's right to cancel the contract within three business days

Question 5

OSHA's Hazard Communication Standard (HazCom) requires electrical contractors to:

Accepted Answer

Maintain Safety Data Sheets (SDS) for all hazardous chemicals used or stored on site

Answer

Post injury rates on the job site bulletin board

Answer

Report all near-miss incidents within 24 hours

Answer

Conduct monthly safety drills for all employees

Question 6

A contractor submits a bid that contains a mathematical error that significantly lowers the price. After the bid is accepted, the contractor discovers the mistake. What is the most likely legal outcome?

Accepted Answer

The contractor may be allowed to rescind the bid if the error was clerical and discovered promptly

Answer

The contractor must perform at the bid price regardless of the error

Answer

The owner must automatically accept a corrected bid

Answer

The contractor can add the error amount as a change order after work begins

Question 7

In construction contracts, what does 'substantial performance' legally mean?

Accepted Answer

The contractor has performed enough of the contract that the owner must pay, minus any cost to correct minor defects

Answer

The contractor has completed more than 50% of the work

Answer

The owner has made all scheduled progress payments

Answer

All inspections have been passed by the local authority having jurisdiction