Arizona Contractor License Exam — All Questions

A construction business is organized as a corporation. If the corporation is sued and cannot pay a judgment, what is generally at risk?

• a.The personal homes and bank accounts of every shareholder
• b.The personal assets of the highest-paid officer only
• c.The assets owned by the corporation itself, not the shareholders' personal assets✓
• d.Nothing, because corporations cannot be sued

A corporation is a separate legal entity from its owners (shareholders). This separation creates limited liability: creditors and judgments generally reach only the assets the corporation owns, and shareholders risk losing only what they invested — not their personal homes or savings. That protection can be lost only in unusual cases such as fraud or 'piercing the corporate veil.'

In a general partnership, how are the general partners liable for the debts of the business?

• a.Only up to the amount each partner originally invested
• b.Personally and jointly liable for all partnership debts✓
• c.Not liable at all, because the partnership pays its own debts
• d.Liable only for debts they personally signed for

A general partnership does not shield its owners. Each general partner has unlimited personal liability and is jointly liable for the partnership's debts and obligations — a creditor can pursue any partner's personal assets. This unlimited exposure is a key reason many contractors instead form an LLC or corporation, which provide limited liability.

Which statement best describes a limited liability company (LLC) for a contracting business?

• a.It gives owners limited liability while normally allowing profits to pass through to owners' personal tax returns✓
• b.It requires the business to pay corporate income tax and forbids pass-through taxation
• c.It makes every member personally liable for all company debts
• d.It can be owned by only one person and never by a group

An LLC combines the liability protection of a corporation with the tax flexibility of a partnership. Members are generally shielded from personal liability for business debts, and by default the LLC's profits and losses 'pass through' to the members' individual tax returns, avoiding the double taxation of a standard C corporation. An LLC may have one member or many.

A contractor's total direct cost for a job is $18,000. The contractor adds a 15% markup to cover overhead and profit. What is the bid price?

• a.$18,150
• b.$18,270
• c.$20,700✓
• d.$21,150

Markup is a percentage added on top of cost. Multiply the cost by (1 + markup): $18,000 x 1.15 = $20,700. The markup dollars are $18,000 x 0.15 = $2,700, which is added to the $18,000 cost to reach the bid price. Markup covers both company overhead and profit.

A job costs the contractor $8,000. The contractor wants a 20% gross profit MARGIN (profit as a percentage of the selling price). What must the selling price be?

• a.$9,600
• b.$10,000✓
• c.$9,800
• d.$10,400

Margin is measured against the selling price, not the cost, so you cannot simply add 20% to cost. Price = cost / (1 - margin) = $8,000 / (1 - 0.20) = $8,000 / 0.80 = $10,000. Check: profit is $2,000, and $2,000 / $10,000 = 20% margin. Adding 20% to cost ($9,600) would only give a 16.7% margin — a common and costly estimating error.

How many cubic yards of concrete are needed for a slab 27 ft long, 30 ft wide, and 4 inches thick?

• a.3.3 cubic yards
• b.6.7 cubic yards
• c.8.5 cubic yards
• d.10 cubic yards✓

First convert thickness to feet: 4 in / 12 = 0.3333 ft. Volume in cubic feet = 27 x 30 x 0.3333 = 270 cubic feet. Convert to cubic yards by dividing by 27 (there are 27 cubic feet in a cubic yard): 270 / 27 = 10 cubic yards. Getting units consistent — feet for all three dimensions — is the key step.

On a project where the exact quantities of excavation and fill are not yet known, which bidding method best protects both owner and contractor from large quantity surprises?

• a.A unit-price contract, paying a set price per unit for the actual quantity installed✓
• b.A lump-sum contract with no measurement of quantities
• c.A verbal handshake agreement
• d.A cost-plus contract with no cost records kept

Unit pricing sets a fixed price per unit (for example, per cubic yard of excavation), and the contractor is paid for the actual measured quantity. This fairly handles uncertain quantities: the owner pays only for work performed, and the contractor is protected if quantities grow. A lump sum forces the contractor to guess and gamble on the quantity, which is risky when the amount is genuinely unknown.

Which set of elements is generally required for a contract to be legally valid and enforceable?

• a.A notary stamp, a witness, and a deposit
• b.A blueprint, a permit, and a bond
• c.Offer, acceptance, consideration, legal capacity, and a lawful purpose✓
• d.A handshake, a logo, and an invoice

A valid contract requires an offer, acceptance of that offer (mutual assent), consideration (something of value exchanged by each side), parties with legal capacity to contract, and a lawful purpose. If any element is missing — for example, no consideration or an illegal objective — the agreement may be void or unenforceable. Notaries, permits, and bonds are sometimes useful but are not the core elements of contract formation.

A construction contract states that the contractor will pay the owner $500 for each day the project finishes late, agreed in advance as a reasonable estimate of the owner's loss. This clause is best described as:

• a.A performance bond
• b.A liquidated damages clause✓
• c.A mechanic's lien
• d.A punitive penalty that courts always strike down

Liquidated damages are a dollar amount the parties agree to IN ADVANCE as compensation for a breach (commonly late completion) when the actual loss would be hard to calculate. To be enforceable the amount must be a reasonable pre-estimate of the harm, not a punishment. A performance bond is a surety guarantee, and a mechanic's lien secures payment for labor and materials — different tools entirely.

The owner asks the contractor to add a bathroom that was not in the original signed contract. What is the correct way to authorize and price this added work?

• a.A written change order signed by both parties before the work proceeds✓
• b.A verbal 'go ahead' with no documentation
• c.An adjustment made quietly on the final invoice
• d.A new lawsuit filed against the owner

A change order is a written amendment that documents a modification to the scope, price, or schedule and is signed by both parties. Handling changes in writing before performing the work protects the contractor's right to be paid for the extra work and prevents disputes about what was authorized. Relying on verbal approvals is a leading cause of payment disputes.

Under the Statute of Frauds, which of the following is generally required to be in writing to be enforceable?

• a.A one-hour verbal agreement to sweep a job site
• b.A casual promise to lend a friend a hammer
• c.An agreement to buy lunch for the crew
• d.A contract for the sale of land or an interest in real property✓

The Statute of Frauds requires certain categories of contracts to be in writing and signed to be enforceable — most notably contracts for the sale of land or interests in real property, and agreements that cannot be performed within one year. This is why construction and real-property agreements are documented in writing. Minor, short, everyday arrangements are not covered.

In a Critical Path Method (CPM) schedule, the 'critical path' is:

• a.The path with the most expensive activities
• b.The longest sequence of dependent activities, which determines the shortest possible project duration✓
• c.The path that uses the newest equipment
• d.Any path that has the most float

The critical path is the longest chain of dependent activities through the network. Because it is the longest path, it sets the minimum time in which the whole project can finish. Activities on the critical path have zero float — delaying any one of them delays the entire project. It is about time and dependency, not cost or equipment.

'Float' (also called slack) for a scheduled activity means:

• a.The amount of time an activity can be delayed without delaying the project's completion date✓
• b.The amount of money left in the activity's budget
• c.The number of extra workers assigned to the activity
• d.The percentage of the activity that is already complete

Float (slack) is the scheduling flexibility of an activity — how long it can slip before it pushes out the project finish date. Activities on the critical path have zero float. Understanding float lets a manager shift non-critical work and reallocate crews without harming the overall completion date. It is a measure of time flexibility, not money or manpower.

During construction the contractor finds the plans and specifications conflict and needs clarification from the architect. The standard document used to formally ask this question is a:

• a.Certificate of occupancy
• b.Lien waiver
• c.Request for Information (RFI)✓
• d.Notice to proceed

A Request for Information (RFI) is the formal, written channel a contractor uses to ask the design team to clarify or resolve gaps, conflicts, or ambiguities in the drawings and specifications. Documenting questions and answers through RFIs creates a paper trail, avoids guesswork, and supports later claims if the answer changes the cost or schedule.

What is the primary purpose of a Gantt (bar) chart on a construction project?

• a.To calculate payroll taxes for each employee
• b.To show project activities as bars along a timeline so start dates, durations, and overlaps are easy to see✓
• c.To record the exact chemical composition of the concrete
• d.To replace the need for any building permits

A Gantt chart displays each task as a horizontal bar positioned and sized along a time axis, making it easy to communicate when activities start and finish, how long they take, and where they overlap. It is a scheduling and communication tool. It does not perform payroll, material testing, or permitting functions.

A contracting company has current assets of $240,000 and current liabilities of $120,000. What is its current ratio?

• a.0.5 to 1
• b.1.2 to 1
• c.2.0 to 1✓
• d.12 to 1

Current ratio = current assets / current liabilities = $240,000 / $120,000 = 2.0. A ratio of 2.0 means the company has $2 of short-term assets for every $1 of short-term debt, which generally indicates healthy short-term liquidity. Sureties and lenders watch this ratio closely; a ratio below 1.0 signals the company may struggle to pay near-term obligations.

Working capital is calculated as:

• a.Current assets minus current liabilities✓
• b.Total revenue minus total expenses for the year
• c.The value of all equipment the company owns
• d.The owner's original cash investment

Working capital = current assets - current liabilities. It measures the short-term funds available to run daily operations, buy materials, meet payroll, and absorb delays before receivables come in. Positive working capital is essential in construction because contractors often pay costs long before the owner pays them. It is different from annual net profit and from equipment value.

On a project, the owner withholds 10% from each progress payment until the work is satisfactorily completed. This withheld amount is called:

• a.A liquidated damage
• b.Retainage (retention)✓
• c.A change order
• d.Overhead

Retainage (retention) is a portion of each progress payment the owner holds back — commonly 5% to 10% — and releases after the contractor satisfactorily completes the work and addresses punch-list items. It gives the owner leverage to ensure completion, but it also strains the contractor's cash flow, so contractors must plan for it and pass appropriate retainage terms down to subcontractors.

Why do contractors use job costing (tracking costs to each specific project)?

• a.Because the law forbids one combined company bank account
• b.To avoid ever having to file a tax return
• c.Only to make the paperwork look more professional
• d.To compare actual costs against the estimate for each job and see which jobs are profitable✓

Job costing assigns labor, materials, equipment, and subcontractor costs to each individual project. This lets the contractor compare actual costs to the original estimate in real time, catch overruns early, price future work more accurately, and identify which types of jobs actually make money. Without job costing, a company can be busy and still lose money without knowing which project caused the loss.

Under OSHA construction standards, at what height above a lower level does fall protection generally become required for workers on a construction site?

• a.2 feet
• b.4 feet
• c.6 feet✓
• d.20 feet

OSHA's construction fall-protection rule (29 CFR 1926.501) generally requires protection — such as guardrails, safety nets, or personal fall-arrest systems — when a worker is exposed to a fall of 6 feet or more to a lower level. (Note the general-industry trigger is 4 feet, but on construction sites the 6-foot rule applies.) Falls are consistently a leading cause of construction fatalities, which is why this threshold is heavily tested and enforced.

According to the hierarchy of controls, which method of protecting workers from a hazard is MOST effective and should be considered first?

• a.Eliminating the hazard entirely✓
• b.Providing personal protective equipment (PPE)
• c.Posting a warning sign
• d.Writing the hazard into a safety manual

The hierarchy of controls ranks protections from most to least effective: elimination, substitution, engineering controls, administrative controls, and finally PPE. Removing the hazard entirely is best because it does not depend on worker behavior or equipment holding up. PPE is the last line of defense — it only reduces exposure and relies on correct, consistent use, so it is the least reliable control on its own.

OSHA requires that a trench or excavation be protected by sloping, shoring, or a protective (trench) box once it reaches what depth?

• a.3 feet
• b.5 feet✓
• c.10 feet
• d.15 feet

Under OSHA's excavation standard (29 CFR 1926.652), a protective system — sloping/benching, shoring, or a trench box (shield) — is generally required for trenches 5 feet deep or greater (unless the excavation is entirely in stable rock). A registered professional engineer must design protection for trenches deeper than 20 feet. Cave-ins are frequently fatal, so a competent person must inspect excavations daily.

Who is responsible for providing a safe workplace and requiring the use of appropriate personal protective equipment on a job site?

• a.Only the individual workers themselves
• b.Only the equipment manufacturer
• c.Only OSHA inspectors
• d.The employer✓

Under the OSH Act's General Duty Clause and OSHA standards, the employer has the primary legal duty to furnish a workplace free from recognized hazards, to assess the job for hazards, and to provide and require appropriate PPE (often at no cost to the employee). Workers must follow safety rules and use provided equipment, but the core obligation to create a safe workplace rests with the employer.

An employee is injured while framing a house during work hours. Which system is designed to cover the employee's medical bills and lost wages regardless of who was at fault?

• a.The employee's personal auto insurance
• b.Workers' compensation insurance✓
• c.A performance bond
• d.The building permit fee

Workers' compensation is a no-fault system: an employee injured on the job receives medical care and partial wage replacement without having to prove the employer was negligent, and in exchange the employer is generally protected from most injury lawsuits. Carrying required workers' compensation coverage is a fundamental legal obligation for contractors with employees. A bond and a permit serve entirely different purposes.

Under the federal Fair Labor Standards Act (FLSA), a covered nonexempt employee must generally be paid overtime for hours worked beyond:

• a.8 hours in a single day, in every state
• b.35 hours in a week
• c.40 hours in a workweek, at one-and-one-half times the regular rate✓
• d.60 hours in a week, at the regular rate

The FLSA sets the federal overtime rule: covered nonexempt employees must receive at least 1.5 times their regular rate for hours worked over 40 in a workweek. The federal standard is weekly, not daily (some states add their own daily-overtime rules, but the nationwide FLSA baseline is the 40-hour workweek). Misclassifying workers to dodge overtime is a common and costly violation.

Which factor most strongly suggests a worker should be classified as an EMPLOYEE rather than an independent contractor?

• a.The business controls how, when, and where the work is done and provides the tools✓
• b.The worker runs an independent business serving many clients and sets their own methods
• c.The worker supplies their own tools and can profit or lose based on their own decisions
• d.The worker is free to accept or reject jobs from many different companies

The central test for classification is the degree of control and independence. When the business directs how, when, and where the work is performed and supplies the tools, the worker looks like an employee. Independent contractors typically control their own methods, invest in their own tools, serve multiple clients, and bear the risk of profit or loss. Misclassifying employees as contractors to avoid taxes, overtime, and workers' comp is a serious and heavily penalized violation.

What is the purpose of Form I-9 that a contractor completes for each new hire?

• a.To calculate the employee's overtime rate
• b.To register the employee with the local building department
• c.To order the employee's personal protective equipment
• d.To verify the employee's identity and legal authorization to work in the United States✓

The federal Form I-9 is used to verify each new employee's identity and their authorization to work in the United States, as required by immigration law. Employers must complete and retain an I-9 for every employee and review acceptable documents. It is separate from tax forms (like the W-4) and from any safety, permitting, or payroll-rate functions.

What is the primary purpose of a building permit and the inspections that go with it?

• a.To generate extra tax revenue with no benefit to the public
• b.To confirm that the proposed work meets the applicable building codes for safety and to allow official inspection of the work✓
• c.To guarantee the contractor will make a profit on the job
• d.To replace the need for a written contract with the owner

A building permit is the jurisdiction's authorization to perform construction that meets the adopted building codes, and the required inspections verify that the work actually complies at key stages. The core purpose is protecting public health and safety — sound structures, safe electrical and plumbing systems, and proper egress. Permits are not a revenue trick, a profit guarantee, or a substitute for the owner-contractor contract.

Before a newly constructed building may be legally occupied, the building department typically must issue a:

• a.Certificate of occupancy✓
• b.Lien waiver
• c.Bid bond
• d.Change order

A certificate of occupancy (CO) is the document the building official issues after final inspections confirm the building complies with the code and is safe to occupy for its intended use. Occupying a building without a required CO can lead to fines and forced vacancy. A lien waiver relates to payment, a bid bond to the bidding process, and a change order to scope changes — none of them authorize occupancy.

A contractor must set a new house a minimum distance from the property line. Which type of rule most directly governs this required setback?

• a.The electrical code
• b.OSHA fall-protection standards
• c.Local zoning ordinances✓
• d.The workers' compensation statute

Setbacks — the minimum required distances between a structure and the property lines — are established by local zoning ordinances, which regulate how land may be used and where buildings may be placed. Building codes govern how a structure is built (its safety and construction), while zoning governs where and what may be built. Distinguishing zoning (land use) from building codes (construction standards) is a fundamental concept for contractors.

Which body licenses and regulates contractors in Arizona?

• a.The Arizona Department of Motor Vehicles
• b.The Arizona Registrar of Contractors (ROC)✓
• c.County building departments acting alone
• d.The federal OSHA regional office

Contractors in Arizona are licensed and regulated statewide by the Arizona Registrar of Contractors (ROC) under A.R.S. Title 32, Chapter 10. The ROC sets qualification standards, administers the Statutes and Rules Exam, issues licenses, and disciplines contractors.A.R.S. Title 32, Ch. 10 (§32-1101 et seq.)

Under Arizona's handyman (casual or minor work) exemption, a person may perform certain small jobs without a contractor license only when the total contract price, including labor and materials, is less than what amount?

• a.$500
• b.$5,000
• c.$1,000✓
• d.$10,000

Arizona's handyman exemption applies only when the aggregate contract price, including labor and materials, is less than $1,000. Above that figure a contractor license is required, and the exemption has additional conditions beyond the dollar limit.A.R.S. §32-1121 (handyman / casual-or-minor-work exemption)

Besides the dollar limit, the Arizona handyman exemption applies only when:

• a.The work is casual or minor, does not require a building permit, and the person does not advertise or imply that they are a licensed contractor✓
• b.The person holds a city business license
• c.The homeowner signs a waiver of all legal rights
• d.The work is performed only on a weekend

The exemption requires that the work be casual or minor, that it not require a building permit, and that the person not hold themselves out as a licensed contractor. Advertising as licensed or splitting a larger job to stay under $1,000 defeats the exemption.A.R.S. §32-1121 (conditions of the exemption)

Arizona contractor licenses are organized into which scopes?

• a.Federal and state only
• b.Union and non-union
• c.Residential only
• d.Commercial, Residential, and Dual (a license covering both commercial and residential)✓

Arizona organizes licenses into Commercial, Residential, and Dual scopes, with general and specialty classifications under each. Choosing the correct scope and classification is essential, because working outside the license is a violation.A.R.S. §32-1102 (license scopes)

An applicant passes the NASCLA Accredited Commercial General Building examination for an Arizona commercial 'B' license. What else must the applicant generally complete?

• a.Nothing further; passing NASCLA alone licenses the contractor in Arizona
• b.A separate Business Management exam that Arizona administers apart from the SRE
• c.The Arizona Statutes and Rules Exam (SRE); NASCLA is accepted for the trade portion but does not replace the SRE✓
• d.Nothing, because NASCLA is not accepted in Arizona

Arizona accepts the NASCLA exam for the trade portion, but the applicant must still pass the Arizona Statutes and Rules Exam (SRE). Arizona does not give a separate Business Management exam - business content is folded into the SRE.A.R.S. Title 32, Ch. 10; NASCLA acceptance policy

Arizona's Statutes and Rules Exam (SRE) is an open-book examination covering which body of law?

• a.Arizona Revised Statutes Title 32, Chapter 10 and Arizona Administrative Code Title 4, Chapter 9✓
• b.The federal Internal Revenue Code only
• c.Local municipal zoning ordinances only
• d.The Uniform Commercial Code exclusively

The open-book SRE tests the contractor-licensing law in A.R.S. Title 32, Chapter 10 and the Registrar's rules in A.A.C. Title 4, Chapter 9. Because it is open book, knowing how to find answers in those statutes and rules is the key skill.Arizona SRE (A.R.S. Title 32, Ch. 10; A.A.C. Title 4, Ch. 9)

How does Arizona test a contractor applicant's business-management knowledge?

• a.Through a separate 100-question business examination
• b.It is not tested at all in Arizona
• c.Through an oral interview only
• d.It is folded into the Statutes and Rules Exam (SRE); Arizona does not administer a stand-alone Business Management exam✓

Unlike states that give a separate business-and-law exam, Arizona folds the business content into the SRE. There is no stand-alone Business Management examination, so applicants prepare for business topics as part of the statutes-and-rules material.Arizona SRE (business content folded into the SRE)

When is an Arizona applicant generally NOT required to take the SRE?

• a.When the applicant is over 40 years old
• b.When the applicant has been a qualifying party on an Arizona contractor license within the previous five years✓
• c.When the applicant pays a double application fee
• d.The SRE can never be waived under any circumstances

The SRE is generally required unless the applicant has been a qualifying party on an Arizona contractor license within the previous five years. Recent, demonstrated familiarity with Arizona's licensing law is what allows the exam to be waived.Arizona SRE waiver (qualifying party within the previous five years)

Every Arizona contractor license must have a 'qualifying party.' What is that person's role?

• a.The company's outside attorney of record
• b.Any customer who vouches for the contractor
• c.An individual regularly involved in the contracting business whose experience and examination qualify the license✓
• d.A state employee assigned to oversee the firm

The qualifying party is an individual who is actively and regularly involved in the contracting business and whose experience and passing exam results qualify the license. The license depends on that person; if they leave, the license can be affected.A.R.S. §32-1127 (qualifying party)

Before an Arizona contractor license is issued, the applicant must post what financial security for the benefit of persons who may be damaged?

• a.A contractor's license bond (or an approved cash deposit) in an amount set by the Registrar✓
• b.A flat $1,000,000 cash payment to the state
• c.A life insurance policy on the business owner
• d.Nothing is required before the license issues

Arizona requires a contractor's license bond (or an approved cash deposit) before a license issues, in an amount set by the Registrar based on the license class and the contractor's volume of work. The bond protects those who may be damaged by the contractor.A.R.S. §32-1152 (contractor's license bond)

What is the purpose of the Arizona contractor's license bond?

• a.To pay the contractor's income taxes
• b.To guarantee the contractor a minimum profit on each job
• c.To cover the Registrar's operating budget
• d.To provide a source of recovery for persons damaged by the contractor's violation of the licensing law or of a construction contract✓

The license bond gives injured parties - owners, workers, or suppliers - a source of recovery when a contractor violates the licensing statutes or breaches a contract. It is a consumer-protection device, not a guarantee of the contractor's profit.A.R.S. §32-1152 (purpose of the license bond)

An Arizona applicant's financial statement shows total assets of $250,000 and total liabilities of $160,000. What is the applicant's net worth (owner's equity)?

• a.$410,000
• b.$90,000✓
• c.$160,000
• d.$250,000

Net worth = total assets - total liabilities = $250,000 - $160,000 = $90,000. Net worth (owner's equity) is what the financial statement demonstrates about the contractor's underlying financial strength.Accounting: net worth = total assets - total liabilities

The Arizona Residential Contractors' Recovery Fund can compensate an owner only when the owner:

• a.Is any homeowner, even one who hired an unlicensed handyman
• b.Is a commercial property owner on a large project
• c.Contracted with a LICENSED residential contractor and was damaged by that contractor's failure to perform or a violation of the licensing law✓
• d.Simply changed their mind about the project

The Residential Contractors' Recovery Fund reimburses an owner of a residential structure who was damaged by a licensed residential contractor's failure to perform or violation, when the owner cannot otherwise collect. It applies only to owners who used a licensed contractor.A.R.S. §32-1131 et seq. (Residential Contractors' Recovery Fund)

A homeowner hires an UNLICENSED person who takes a deposit and abandons the job. Can the homeowner recover from the Residential Contractors' Recovery Fund?

• a.No; the Recovery Fund protects only owners who hired a licensed residential contractor✓
• b.Yes; the fund covers all contractors, licensed or not
• c.Yes; the fund even doubles the award when the work was done unlicensed
• d.Only if the unlicensed person held a city business license

The Recovery Fund is funded by and tied to licensed contractors, so it does not cover work performed by an unlicensed person. This is a key reason Arizona urges owners to confirm a contractor's ROC license before hiring.A.R.S. §32-1132 (eligibility requires a licensed contractor)

How is the Arizona Residential Contractors' Recovery Fund financed?

• a.By a state sales tax on lumber and building materials
• b.By federal construction grants
• c.By homeowners' association dues
• d.By assessments and fees paid by licensed residential contractors✓

The fund is financed through assessments and fees paid by licensed residential contractors as part of licensure. Because the contractors themselves fund it, only owners who dealt with a licensed residential contractor can draw on it.A.R.S. §32-1132 (assessments funding the Recovery Fund)

In Arizona, engaging in contracting without a required license is generally classified as what for a first offense?

• a.A non-punishable civil matter
• b.A class 1 misdemeanor✓
• c.A class 2 felony automatically
• d.Not an offense at all in Arizona

A first offense of contracting without a required license in Arizona is a class 1 misdemeanor, the most serious misdemeanor class. Repeat offenses and certain aggravating facts can raise the exposure, and the ROC can also pursue civil enforcement.A.R.S. §32-1164 (unlicensed contracting)

Which of the following is a ground on which the Registrar may suspend or revoke an Arizona contractor's license?

• a.Abandonment of a contract without legal excuse, or a willful departure from the approved plans and specifications✓
• b.Choosing to work only on weekdays
• c.Hiring properly licensed subcontractors
• d.Carrying more insurance than the minimum required

A.R.S. §32-1154 lists grounds for discipline, including abandoning a contract without legal excuse and willfully departing from or disregarding plans or specifications without the owner's consent. Ordinary, lawful business choices are not grounds for discipline.A.R.S. §32-1154 (grounds for suspension or revocation)

A homeowner who wants the Registrar to investigate a licensed contractor generally must file the written complaint within what period after the alleged violation or the last documented work?

• a.Ten days
• b.There is no deadline
• c.Two years✓
• d.Ten years

Under A.R.S. §32-1155, a complaint against a licensed contractor generally must be filed within two years after the commission of the alleged act or the last documented work on the project. Waiting too long can bar the Registrar from acting.A.R.S. §32-1155 (time to file a complaint)

Arizona rules require a licensed contractor's advertising to include what?

• a.A photograph of the qualifying party
• b.The owner's home address
• c.Nothing about the license at all
• d.The contractor's license (ROC) number✓

Arizona requires a licensed contractor's advertising to display the contractor's ROC license number. This lets consumers verify the license and helps the Registrar identify unlicensed advertisers, so omitting it is itself a violation.A.A.C. R4-9-108 (advertising requirements)

Which elements must be present for a construction contract to be legally enforceable?

• a.Notarization and a witness on every contract
• b.Offer, acceptance, consideration, competent parties, and a lawful purpose✓
• c.A minimum length of five pages
• d.Prior approval by the Registrar of Contractors

An enforceable contract requires an offer, acceptance, and consideration (value exchanged), between parties competent to contract, for a lawful purpose. Notarization, a set page count, and Registrar pre-approval are not general requirements.Contract law (essential elements)

When an Arizona owner requests work beyond the original contract scope, the change should be documented by:

• a.A written change order signed by the parties, describing the added work, cost, and time✓
• b.A verbal agreement on the jobsite only
• c.Filing a new license application with the Registrar
• d.Submitting a recovery-fund claim

Added or changed scope should be authorized by a written change order signed by both parties, setting out the added work, its price, and any schedule impact. Verbal changes are a leading cause of disputes over unpaid extra work.Construction contract administration (change orders)

To preserve mechanic's-lien rights on most Arizona projects, a contractor or supplier must serve which document, typically within 20 days after first furnishing labor or materials?

• a.A notice of completion
• b.A certificate of occupancy
• c.A preliminary twenty-day notice✓
• d.A recovery-fund claim

Arizona requires a preliminary twenty-day notice, served on the owner and others generally within 20 days after first furnishing labor or materials, to preserve lien rights on most projects. Note that owner-occupied dwellings have separate rules that can limit lien rights.A.R.S. §33-992.01 (preliminary twenty-day notice)