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

Framing, roofing, and drywall on a new home

Grading and paving a parking lot only

Installing a new electrical panel only

Replacing underground water mains only

California's PACE (Property Assessed Clean Energy) program allows a property owner to finance energy-efficiency or water-conservation improvements and repay the cost through:

An assessment added to the owner's property tax bill

A reduction in the contractor's license bond

A deduction from the contractor's payroll taxes

A grant that never has to be repaid

A licensed contractor with no employees has filed an Exemption from Workers' Compensation with the CSLB. The contractor then hires an employee. Under Bus. & Prof. Code §7125 and §7125.4, what must the contractor do?

Obtain workers' compensation coverage and file a Certificate of Workers' Compensation Insurance with CSLB; the prior exemption is automatically void as soon as an employee is hired

Wait until the next license renewal to update the workers' comp status

Continue working under the exemption for up to 90 days while shopping for coverage

Cancel the contractor license and re-apply once coverage is in place

A landowner orally promises to sell a vacant lot to a contractor, and both shake hands. When the landowner backs out, the contractor sues to enforce the oral sale. The strongest defense the landowner has is:

The Statute of Frauds bars enforcement of an oral contract to sell real property

When may an employee validly WAIVE the first meal period entirely?

Only when the total work period is no more than 6 hours and both parties mutually consent

Whenever the shift exceeds 8 hours

Never; meal periods can never be waived

The primary purpose of JOB COSTING is to:

Track actual costs against the estimate for each specific project

Calculate the contractor's personal income tax

Determine sales tax owed to the state

Under OSHA's PPE rules, who generally must pay for required personal protective equipment?

The employer, with limited exceptions (e.g., ordinary prescription safety eyewear, everyday work boots)

An applicant who has been convicted of a crime substantially related to the qualifications of a contractor may face what in the licensing process?

Possible denial of the license after individualized consideration

CSLB Law & Business Practice Test

Frequently asked questions

How many CSLB Business & Law practice questions are in this bank?+

1,605 original practice questions across all 7 topics of the CSLB Business & Law exam, with full explanations and California statute citations on every question.

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Yes — every practice question, organized by topic with full explanations, is free and needs no signup. The full timed mock exam (mock-readiness score, PDF report and weak-area retest) is free too. The only paid product is our optional $9.99 study-guide eBook.

Are these the real CSLB exam questions?+

No. All questions are 100% original prose authored from public-domain sources (California Business and Professions Code, Civil Code, Labor Code, Title 16 CCR). We never copy from real CSLB exams or paid prep providers.

What topics does the CSLB Business & Law exam cover?+

Seven topics: Business Organization & Licensing, Business Finance, Employment Requirements, Insurance & Liens, Contracts & Performance, Public Works, and Safety.

What's the passing score for the CSLB Business & Law exam?+

Commonly cited as about 73%. The real CSLB exam is 115 questions over 3.5 hours at a PSI testing center — roughly 84 correct to pass.

Can I take the CSLB exam in Spanish?+

Yes — the official CSLB exam is offered in English and Spanish. Other languages may be available by translator request (4–6 weeks lead time). PrepPass practice questions are available in English, 中文, and Español.

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Yes — sign up free and the 'My mistakes' filter shows you only the questions you've missed across all your practice sessions. It updates automatically as you re-attempt and get them right.

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 & 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. Contracts & Execution
On a private works project, after the owner pays the general contractor a progress payment, the general contractor must pay each subcontractor its share within how many days?
- a.7 days
- b.14 days
- c.21 days
- d.45 days
Answer: a
Explanation: Under California prompt payment law, a direct contractor on a private project must pay each subcontractor its portion within 7 days of receiving a progress payment from the owner.
Source: Civil Code §8800
3. Business Finances
California's PACE (Property Assessed Clean Energy) program allows a property owner to finance energy-efficiency or water-conservation improvements and repay the cost through:
- a.A reduction in the contractor's license bond
- b.A deduction from the contractor's payroll taxes
- c.An assessment added to the owner's property tax bill
- d.A grant that never has to be repaid
Answer: c
Explanation: Under a PACE program, the financing for qualifying efficiency improvements is repaid as a special assessment on the property owner's annual property tax bill. It is governed by the California Financial Code, not by a grant.
4. Insurance & Liens
An owner of a private residential project withholds final payment because of disputed change-order work. Absent a genuine good-faith dispute, the owner must generally pay the direct contractor the final retention within how long after completion?
- a.10 days
- b.20 days
- c.30 days
- d.45 days
Answer: d
Explanation: Under Civil Code §8800, on a private work the owner must pay the direct contractor any retention within 45 days after completion of the work of improvement, unless there is a good-faith dispute. Wrongful withholding can expose the owner to a penalty plus the amount withheld.
Source: Civil Code §8800
5. Insurance & Liens
A licensed contractor with no employees has filed an Exemption from Workers' Compensation with the CSLB. The contractor then hires an employee. Under Bus. & Prof. Code §7125 and §7125.4, what must the contractor do?
- a.Wait until the next license renewal to update the workers' comp status
- b.Obtain workers' compensation coverage and file a Certificate of Workers' Compensation Insurance with CSLB; the prior exemption is automatically void as soon as an employee is hired
- c.Continue working under the exemption for up to 90 days while shopping for coverage
- d.Cancel the contractor license and re-apply once coverage is in place
Answer: b
Explanation: Bus. & Prof. Code §7125 conditions a contractor's license on either having workers' comp coverage (if any employees) or a current exemption (if none). Under §7125.4, the exemption is void by operation of law the moment the contractor hires an employee, and the contractor must immediately obtain coverage and file the Certificate of Workers' Compensation Insurance with the CSLB. Waiting until renewal or operating uninsured for 90 days while shopping is a violation that triggers automatic license suspension. Cancellation/re-application is unnecessary — the license can be maintained by filing the certificate.
Source: Bus. & Prof. Code §7125
6. Contracts & Execution
A landowner orally promises to sell a vacant lot to a contractor, and both shake hands. When the landowner backs out, the contractor sues to enforce the oral sale. The strongest defense the landowner has is:
- a.Lack of consideration
- b.The Statute of Frauds bars enforcement of an oral contract to sell real property
- c.The contractor lacked capacity
- d.The object was unlawful
Answer: b
Explanation: A contract for the sale of real property must be in writing and signed by the party to be charged under the Statute of Frauds. A mere oral handshake to sell land is generally unenforceable, giving the landowner a Statute of Frauds defense. Consideration, capacity, and legality are not the problem here; the defect is the absence of a signed writing for a land sale.
Source: California Civil Code §1624
7. Employment
When may an employee validly WAIVE the first meal period entirely?
- a.Any time the employer prefers
- b.Whenever the shift exceeds 8 hours
- c.Only when the total work period is no more than 6 hours and both parties mutually consent
- d.Never; meal periods can never be waived
Answer: c
Explanation: Under Labor Code §512, the first meal period may be waived by mutual consent only when the employee's total work period for the day does not exceed 6 hours. The second meal period may be waived by mutual consent only if the shift is no more than 12 hours and the first meal period was not waived. Waivers are limited and require agreement; they are neither at the employer's sole discretion nor categorically prohibited.
Source: Labor Code §512; meal waiver
8. Business Finances
The primary purpose of JOB COSTING is to:
- a.Calculate the contractor's personal income tax
- b.Set the CSLB license fee
- c.Determine sales tax owed to the state
- d.Track actual costs against the estimate for each specific project
Answer: d
Explanation: Job costing records the actual labor, materials, subcontractor, and other costs for each individual project and compares them to the estimate. It reveals which jobs are profitable and improves the accuracy of future bids.
9. Safety
Under OSHA's PPE rules, who generally must pay for required personal protective equipment?
- a.The employee, out of pocket
- b.The employer, with limited exceptions (e.g., ordinary prescription safety eyewear, everyday work boots)
- c.The project owner
- d.The insurance company only
Answer: b
Explanation: OSHA's PPE payment rule requires employers to pay for required PPE, with narrow exceptions such as non-specialty prescription safety eyewear, ordinary logging boots, and everyday clothing.
Source: 29 CFR 1926.95(d)
10. Business & Licensing
An applicant who has been convicted of a crime substantially related to the qualifications of a contractor may face what in the licensing process?
- a.Automatic approval
- b.Possible denial of the license after individualized consideration
- c.A guaranteed license
- d.A refund
Answer: b
Explanation: Under B&P Code sections 7069 and 480, the CSLB may deny a license where the applicant has been convicted of a crime substantially related to the duties of a contractor, after considering rehabilitation and other individualized factors.
Source: B&P Code §7069