NASCLA Business Law and Licensing Requirements 2 — Questions and Answers
Question 1: When a contractor moves to a new state, the NASCLA exam helps because many states offer reciprocity to candidates who have passed which exam?
- Local county trade exam
- NASCLA Contractors Business and Law Exam (Correct answer)
- IRS contractor certification
- Federal contractor qualification exam
Correct answer: NASCLA Contractors Business and Law Exam
Many states offer licensing reciprocity to contractors who have passed the NASCLA Contractors Business and Law Exam, easing multi-state licensing.
Question 2: A subcontractor license is typically required when the subcontract value exceeds what threshold in most states?
- $500
- $100
- $50,000
- The threshold varies by state but is defined by state law (Correct answer)
Correct answer: The threshold varies by state but is defined by state law
Subcontractor licensing thresholds vary by state; contractors must know their specific state's dollar threshold requirements.
Question 3: Which of the following would most likely cause a contractor's license to be revoked?
- Filing taxes late
- Abandoning a project without cause or just compensation (Correct answer)
- Hiring more than 10 employees
- Using subcontractors
Correct answer: Abandoning a project without cause or just compensation
Abandoning a project without legal justification is a serious violation that can result in license revocation and civil liability.
Question 4: A contractor's license bond primarily protects which party?
- The contractor's employees
- The general public and project owners (Correct answer)
- The bonding company
- The state licensing board
Correct answer: The general public and project owners
A contractor's license bond protects members of the public and project owners from financial harm caused by the contractor's failure to comply with licensing laws.
Question 5: Which act prohibits contractors from discriminating in hiring based on race, color, religion, sex, or national origin?
- Americans with Disabilities Act
- Davis-Bacon Act
- Civil Rights Act of 1964, Title VII (Correct answer)
- Equal Pay Act
Correct answer: Civil Rights Act of 1964, Title VII
Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex, or national origin for employers with 15 or more employees.
Question 6: What is the statute of limitations in the context of contractor licensing and construction law?
- The time limit to obtain a license renewal
- The time limit within which a legal action must be filed (Correct answer)
- The deadline to complete a construction project
- The expiration date on a contractor's bond
Correct answer: The time limit within which a legal action must be filed
The statute of limitations is the legally defined period within which a lawsuit or claim must be filed, after which the claim is barred.
NASCLA Business Law and Licensing Requirements 2
When a contractor moves to a new state, the NASCLA exam helps because many states offer reciprocity to candidates who have passed which exam?