MHIC Contracts and Estimating 2

Question 1

Under Maryland Home Improvement Law, which of the following MUST be included in every home improvement contract?

Accepted Answer

The contractor's MHIC license number

Answer

The homeowner's credit score

Answer

A list of all subcontractors to be used

Answer

A breakdown of the contractor's profit margin

Question 2

A contractor provides a written estimate and the homeowner signs it. Under Maryland law, this signed estimate generally functions as:

Accepted Answer

A binding contract if it contains all required contract elements

Answer

A non-binding proposal only

Answer

Binding only after work begins

Answer

Binding only if notarized

Question 3

Maryland law requires that a home improvement contract include a notice of the homeowner's right to cancel. When must this notice be provided?

Accepted Answer

At the time of signing, as part of the contract

Answer

Within 72 hours after work begins

Answer

Only if the contract exceeds $25,000

Answer

Only for contracts solicited at the homeowner's door

Question 4

A contractor gives an oral estimate of $8,000, then submits a written contract for $9,500. The homeowner signed the written contract. Which amount governs?

Accepted Answer

$9,500 — the signed written contract governs

Answer

$8,000 — the oral estimate is binding

Answer

The average of both amounts

Answer

Neither amount; the contract is void due to discrepancy

Question 5

Under Maryland Home Improvement Law, what is the maximum deposit a contractor can require before beginning work?

Accepted Answer

One-third (1/3) of the contract price

Answer

One-half (1/2) of the contract price

Answer

10% of the contract price

Answer

There is no legal limit on deposits

Question 6

Which of the following contract provisions is PROHIBITED under Maryland Home Improvement Law?

Accepted Answer

A waiver of the homeowner's right to cancel

Answer

A payment schedule tied to completion milestones

Answer

A clause allowing price adjustments for material cost increases

Answer

A dispute resolution clause requiring mediation