South Carolina Contracts & Agreements
Contracts and agreements are the most heavily weighted section of South Carolina's Business Management and Law exam. This chapter covers the elements of an enforceable contract, change orders, liquidated damages, and the AIA general conditions.
Elements of an enforceable contract
An enforceable construction contract requires an offer, acceptance, and consideration (something of value exchanged), between parties competent to contract, for a lawful purpose. Notarization and board pre-approval are not general requirements; the substance of the bargain is what makes the contract binding.
Change orders and liquidated damages
Scope changes should be authorized by a written change order stating the added work, price, and time. A liquidated-damages clause sets a pre-agreed, reasonable estimate of delay losses - often a fixed sum per day - and is enforceable when it is a genuine estimate rather than a penalty.
The AIA general conditions
In a standard AIA contract set, the A201 General Conditions of the Contract for Construction (current edition A201-2017) is the rulebook governing notices, claims, changes, payments, and disputes, and it is referenced by the owner-contractor agreement. G702 is a pay application, A701 governs bidding, and B101 is the owner-architect contract.
State-specific details
State exam facts
- State regulator
- South Carolina Contractor's Licensing Board (CLB), Department of Labor, Licensing and Regulation (LLR)
- Passing score
- 70%
- Scored questions
- 50
- Time limit
- 125 minutes
Does South Carolina require a state contractor license?
Yes. The South Carolina Contractor's Licensing Board (CLB), within LLR, licenses commercial contractors under S.C. Code Title 40, Chapter 11. A commercial license is required when the cost of the work exceeds $10,000 (after Act H.4115 of 2023).
What is on the South Carolina Business Management and Law exam?
The Business Management and Law exam is 50 questions, 125 minutes, and requires 70% to pass. Financial Groups I through V tie bid limit, working capital, net worth, and bond together (Group I $100,000 up to Group V unlimited), and applicants qualify by net worth or working capital.
What extra rules apply to South Carolina contractors?
A commercial CLB license also authorizes residential work, and a GC-Building contractor may self-perform ancillary specialty work only up to about 20% of project cost. The E-Verify requirement and the NPDES construction stormwater permit (one acre or more) also apply.
Sources: https://llr.sc.gov/clb/