CSLB Law & Business Exam PrepCalifornia Contractor License (CSLB) Exam Prep — Law & Business 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. 1. Business & Licensing

   A contractor who holds a Class "B" General Building Contractor license may perform work in which situation?

   • a.Framing, roofing, and drywall on a new home
   • b.Grading and paving a parking lot only
   • c.Installing a new electrical panel only
   • d.Replacing underground water mains only

   Answer: a

   Explanation: A Class B licensee may take contracts for structures and can self-perform two or more unrelated subcontractor trades. Installing only an electrical panel or replacing water mains would require C-specialty licenses, and grading/paving is Class A work.

   Source: Bus. & Prof. Code §7057

2. 2. Business Finances

   A contractor wins a job for $300,000 and incurs total costs of $264,000. What is the profit margin on the selling price?

   • a.13.6%
   • b.10%
   • c.12%
   • d.36%

   Answer: c

   Explanation: Profit = $300,000 − $264,000 = $36,000. Margin = Profit ÷ Selling Price = $36,000 ÷ $300,000 = 0.12 = 12%.

3. 3. Contracts & Execution

   Under California's Right to Repair Act (Civil Code §895 et seq., enacted by SB 800), what is the general statute of limitations for a homeowner to bring a construction defect claim against the builder for a function/use defect not otherwise specified?

   • a.Four years for patent defects and ten years for latent defects, under CCP §337.15
   • b.One year from close of escrow, the period for the fit-and-finish warranty
   • c.Three years from discovery of the defect, under the general tort statute
   • d.Ten years from substantial completion, with shorter periods for some defects

   Answer: d

   Explanation: Civil Code §941(a) sets the outside limit for a Right to Repair Act claim at 10 years after substantial completion. Inside that window §896 gives many defect types their own shorter period — 4 years for plumbing and sewer, 5 years for paint and stains, 1 year for landscaping and irrigation, 2 years for noise transmission — so the answer is layered, not a single number. (a) is the PRE-SB 800 framework of Code of Civil Procedure §337.15, which still governs projects outside the Act but is not the §896 scheme this question asks about. (b) confuses the limitations period with the separate one-year express fit-and-finish warranty a builder must give under Civil Code §900. (c) applies the general three-year discovery rule for injury to real property (CCP §338(b)), which SB 800 displaced for covered residential construction.

   Source: Civil Code §896, §941; cf. Civil Code §900, Code Civ. Proc. §337.15, §338(b)

4. 4. Employment

   A staffing agency employs temporary workers assigned to a contractor. How often must the staffing agency generally pay these temporary employees under Labor Code §201.3?

   • a.Monthly, on a designated payday each month
   • b.Whenever the client contractor pays the agency
   • c.At the end of each assignment, however long
   • d.Weekly, whatever day the assignment happens to end

   Answer: d

   Explanation: Labor Code §201.3(b)(1) requires a temporary services employer to pay its assigned employees weekly, with the prior week's wages due on a regular designated payday, regardless of when the assignment ends. (b) is the pay-when-paid practice the section was written to stop - the agency's duty to its employees does not depend on the client remitting the invoice, and Labor Code §2810.3 can put the client contractor on the hook for those wages anyway. (c) holds the money to the end of the assignment, which on a long job could mean months. (a) applies the ordinary §204 rhythm, which is itself twice monthly rather than monthly, and in any case is displaced here by §201.3. Day-to-day and same-day assignments have their own rules in §201.3(b)(4)-(5).

   Source: Labor Code §201.3(b)(1)

5. 5. Safety

   Before entering a permit-required confined space, the entry permit must document that the atmosphere has been tested. Which is typically tested FIRST?

   • a.Flammables, then oxygen, then toxics
   • b.Toxics, then oxygen, then flammables
   • c.Oxygen, then toxics, then flammables
   • d.Oxygen, then flammables, then toxics

   Answer: d

   Explanation: Pre-entry testing runs oxygen first, then combustible gases and vapours, then toxic contaminants, and the order is set by the instruments rather than by which hazard is worst. Most combustible gas sensors are catalytic and need oxygen to burn the sample: in an oxygen-deficient atmosphere they read low or read nothing, so a flammables-first result (a) can be falsely reassuring. Oxygen is also the reading that changes how the others are interpreted, since enrichment widens the flammable range while deficiency is immediately dangerous to life on its own. Toxics come last because that sensor is least affected by the other two. Both (b) and (c) put the toxic reading ahead of the flammable one and lose the safeguard.

   Source: 8 CCR §5157(d)(5)(iii); 29 CFR 1926.1204(e)