South Carolina Contractor License Exam Practice Test
Sample practice questions
A few real questions from this free bank, with full explanations. Use the practice tool above for the whole set.
- 1. Business Organization & Licensing
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 corporation's own assets
- d.Only assets the corporation pledged as collateral
Answer: c
Explanation: 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.'
- 2. Contracts & Contract Law
What is 'consideration' in contract law?
- a.The politeness the parties show one another during negotiations
- b.Something of value exchanged by each party
- c.The amount of time the parties take to think before signing
- d.The signatures of both parties on the document
Answer: b
Explanation: Consideration is the bargained-for exchange of value that makes a promise legally binding — for example, the contractor promises to build, and the owner promises to pay money. Each side must give something of value. Without consideration, a promise is generally just a gift and is not an enforceable contract. It is a core element required for a valid contract.
- 3. Estimating & Bidding
A parking pad 45 ft by 36 ft receives a 4-inch compacted gravel base. How many cubic yards of gravel does that base require?
- a.20 cubic yards
- b.240 cubic yards
- c.60 cubic yards
- d.540 cubic yards
Answer: a
Explanation: Area = 45 x 36 = 1,620 square feet, and 4 inches = 0.3333 ft, so the volume is 1,620 x 0.3333 = 540 cubic feet. Divide by 27 to get 20 cubic yards. Leaving the answer at 540 skips the conversion to cubic yards, 60 comes from dividing by 9, and 240 comes from using 4 feet of depth instead of 4 inches.
- 4. Contracts & Contract Law
In a payment dispute, an owner tries to prove the parties orally agreed before signing that landscaping was included in the price. The parol evidence rule generally:
- a.Bars that earlier oral term from contradicting the complete written contract
- b.Admits any oral statement, because spoken promises outweigh a printed form
- c.Requires the court to hear every person who was present at the signing
- d.Applies only to contracts a notary public has acknowledged and stamped
Answer: a
Explanation: The parol evidence rule keeps prior or contemporaneous oral agreements from being used to contradict or add to a written contract the parties intended as their complete and final expression. Its practical lesson is blunt: if a promise matters, put it in the document before signing. The rule does not depend on notarization, and courts do not treat side promises as superior to the signed writing.
- 5. Business Organization & Licensing
In one month a licensed contracting company moves its office, adds a new part-owner, and loses its qualifier. What should the company do?
- a.Wait until the license renewal date and report all three changes at that time
- b.Report only the ownership change, since address and personnel are internal matters
- c.Notify the licensing authority of each change within the time its rules require
- d.Report the changes only if a customer or a competitor asks the company about them
Answer: c
Explanation: Licensing authorities require a licensee to keep its record current, and a change of business address, of ownership or officers, and of the qualifying individual are all typically reportable, often within a short window. Losing the qualifier is the most urgent, because a license may be suspended if the position stays vacant. Reporting periods and forms differ by state, and waiting for renewal risks operating on an invalid license.
- 6. Safety & OSHA
A serious hazard exists on a job site, but no specific OSHA standard addresses it. What allows OSHA to cite the employer anyway?
- a.The Hazard Communication Standard, which reaches every hazard on the site
- b.The General Duty Clause, Section 5(a)(1) of the OSH Act
- c.The employer's own written safety manual, once it has been filed with OSHA
- d.The state building code adopted by the local jurisdiction where the site sits
Answer: b
Explanation: Section 5(a)(1) of the Occupational Safety and Health Act requires each employer to furnish employees a place of employment free from recognized hazards that are causing or are likely to cause death or serious physical harm. OSHA relies on it when a recognized hazard exists and no specific standard covers the situation. A company's own manual is an internal document rather than a federal enforcement tool, and hazard communication reaches chemical hazards specifically.
- 7. Building Codes & Permits
A contractor believes the building official has misapplied a provision of the adopted code. What is the usual formal remedy?
- a.Continue the work as planned and raise the issue only if a violation notice is issued
- b.Ask that an inspector from a neighboring jurisdiction be assigned to review the work
- c.Apply for a zoning variance, which permits construction that departs from the adopted code
- d.File an appeal with the jurisdiction's board of appeals, which reviews the official's ruling
Answer: d
Explanation: Adopted codes generally establish a board of appeals to hear claims that the code was wrongly interpreted, that the provisions do not apply, or that an equally good alternative is being refused. The board reviews the official's determination; it is not empowered to waive requirements it simply dislikes. A zoning variance addresses land-use rules such as setbacks or height, which is a different body of regulation entirely.
- 8. Employment & Labor Law
Federal unemployment tax (FUTA) is paid by:
- a.The employee only, through a deduction shown on each paycheck stub
- b.The employee and employer in equal matching shares, like Social Security
- c.The employer only, with nothing deducted from the employees' wages
- d.The general contractor on behalf of every subcontractor working on site
Answer: c
Explanation: FUTA is an employer-paid tax on wages; it is never withheld from an employee's check, which distinguishes it from Social Security and Medicare, where employer and employee each pay a matching share. Employers also pay state unemployment tax, and the rate each company pays is set by state law and its own claims history. Each employer is responsible for its own workforce, not for a subcontractor's employees.
- 9. Employment & Labor Law
A contractor's workers' compensation premium is multiplied by an experience modification rate of 1.25. What does that tell you?
- a.It employs 25 percent more workers than the average firm in its trade
- b.It has earned a 25 percent discount for an unusually good safety record
- c.Its insured payroll has grown 25 percent since the last policy period
- d.Its loss history is worse than average, so it pays 25 percent more
Answer: d
Explanation: An experience modification rate compares a contractor's actual losses with the losses expected for a firm of its size and classification. A mod of 1.00 is average, above 1.00 raises the premium and below 1.00 lowers it, so 1.25 is a 25 percent surcharge rather than a discount. Payroll and headcount already sit inside the premium calculation as the exposure base; the mod is applied on top of them and reflects loss experience alone.
- 10. Contracts & Contract Law
A contractor's general liability policy is written on an occurrence basis. What does that mean?
- a.It covers damage occurring during the policy period
- b.It covers any claim reported during the policy period, whenever the damage occurred
- c.It covers one occurrence per period
- d.It pays only after the contractor has been found liable at trial
Answer: a
Explanation: An occurrence policy attaches to the date of the injury or damage, so a roof that leaks years from now because of work done today looks back to today's policy. The description offered for the alternative, coverage triggered by the report date, is a claims-made policy, which needs continuous renewal or tail coverage to remain useful. Policy limits rather than the trigger control how many occurrences are covered, and liability insurers defend and settle without waiting for a verdict.