Questions and Answers
What is a sub-contractor of the prime contractor?
You would go to a district court:
A sole proprietorship has how many members running the company?
Which act establishes the rights of workers to organize into unions and negotiate contracts?
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If a home solicitation contract is signed on Thursday afternoon, what is the deadline for cancellation?
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What is the purpose of OSHA?
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Do I need to keep paying for liability insurance, maintain financial responsibility, etc. for my license while I am not actively contracting?
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You must report FICA any withheld income tax (Form 941) every:
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The best way to reduce insurance costs without reducing risk is to:
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Which of the following is least likely to result in a claim dispute between the contractor and an owner?
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Which of the following payroll taxes does not have a limit?
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The most economical way to obtain insurance is to:
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The ________ is found in the bidding documents of a construction contract, under the 'Instructions to Bidders'?
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Employees must provide the contractor with Form W-4:
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An employer would issue a 1099 to:
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The 'Notice of right to cancel' on a home improvement contract, is found where?
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A time card includes the day and hours the person worked, as well as:
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Which of the following statements about mechanics' liens is correct?
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Who usually pays for your pre-employment physical?
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Can I inactivate my professional license?
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Of the following, which is the best way to determine if more materials must be ordered?
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Specifications in construction contracts written without reference to brand names or proprietary makes are known as ______ specifications.
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The person responsible for keeping records of changes on jobs is:
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If a client continues to request change orders, you should:
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The phrase _______ is considered potentially troublesome in construction specifications.
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Which of the following statements is correct? A contractor discovers a serious code violation on an approved set of plans:
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What is the purpose of the following statement in a contract? 'THE AGENT IS LIABLE FOR FINAL PAYMENT.'
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The Utah Division of Occupational and Professional Licensing will accept certain examinations an equivalent substitute for the Utah trade classification examinations required if taken in one of the following states.
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The most accurate method of accounting is:
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The most reasonable method of preventing disputes about change orders is to:
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In a contract bond arrangement, the _____ is the obligee.
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A contractor must retain records for employees that are exposed to hazardous materials for a period of time of:
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This type of bond guarantees job completion:
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The person responsible for keeping track of change orders is:
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For what length of time are Current liabilities generally considered?
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An employer is not required to keep written health records for:
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The specification referring to a standard established for either a material, a test method, or an insulation procedure is called a ________.
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Which of these is classified as a job-related direct cost?
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If a contract is made between a contractor and an unlicensed person who is in violation of the law?
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Under the terms found in a typical construction project, the contractor is usually held to guarantee that the completed project:
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Form 941 must be submitted how often?
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After an employee is terminated, how long should a company maintain the employee's time card?
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If a contractor finds an 8" discrepancy on a set of plans, what should the contractor do?
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Overtime laws are considered to be:
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Which of the following is NOT by itself an acceptable form of documentation for filling out an I-9 form?
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In writing construction specifications, each of the following performance characteristics is associated with compatibility EXCEPT:
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When should a contractor accept a job where the owner does not have a pre-approved loan?
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The 'Notice to Owner' is given to:
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Which of the following does the state require for contractors to obtain?
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An employer must provide information on safety procedures:
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Depreciation is taken on which of the company's assets?
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A private employer who employs __ or more people as of July 1, 2010, may not hire a new employee unless the employer is registered with and uses a status verification system such as E-Verify.
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If a contractor decides to increase the contract price, the contractor:
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If a subcontractor signs an unconditional waiver and release, this would imply that a:
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Any applicant who has been denied a license to practice on the basis of credentials, or failure to pass a required examination, may submit a request for agency review to the executive director ____ following notification of the denial of a license or refusal to renew or reinstate a license.
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What should a contractor do if after starting a home improvement project the contractor discovers that the details and specifications do NOT correctly show the existing construction?
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Keeping good accounting records is important for:
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The promise by a party called the guarantor to make good the mistake, debt, or default of another party found in the construction contract law is called:
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The plans and specifications of a home improvement project usually describe:
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The number of years that an employer must keep records of FUTA and other federal taxes is:
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What is the term for a detailed compilation of the quantity of each elemental work item?
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Before beginning work, an employer or contractor must inquire whether asbestos is present in any building constructed prior to:
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An important thing to include when advertising for construction work is:
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Which type of specification is most commonly used for public work?
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______ you pass the state required exams, all applicants must complete the required application to obtain a contractor license.
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The best way to determine if a contractor is duly licensed is to:
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A ___________ is needed if an owner wants a contractor to start earlier before the formalities associated with the signing of the contract can be completed.
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_____ your application is submitted to the D.O.P.L. you must purchase the required public liability insurance.
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Which can be said about fixed expenses?
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One way of guaranteeing project completion and correction of defects is by withholding funds which is also called:
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_________ defines the total financial resources available to the contractor.
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When doing several prime contracts in a construction project, the limits of each prime contract will usually be established in the:
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My license was up for renewal, but it expired. Why wasn't I contacted?
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If more than 0.1 asbestos is discovered in the construction materials, the following should be done:
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A cancellation of contract happens:
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Once I submit my application, can I work until I get my license from DOPL?
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If depreciation of equipment is not accounted for on a balance sheet, debts are:
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Preliminary notice must be filed with the Construction Registry within __ days after commencement of claimant's work.
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A license may not be reinstated subsequent to action taken under Section 58-1-401 _______ after the action has been taken, unless the division in collaboration with the appropriate board imposes other conditions.
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If a job site is found to have unsafe conditions, OSHA has the power to stop work for:
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As a safety precaution, how many feet should there be between explosives and electrical wiring?
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If a homeowner requests that the contractor obtain a payment and performance bond, the owner is wanting coverage for:
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Written reports are required to be written by the employer in case of which job-related injury?
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The term for the written documents which describe the rights, responsibilities, and relationships of the contracting parties is called:
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The DOPL has authority to enforce the:
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A minor must be paid what percentage of the normal wage?
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You are allowed to take the contractor license exam ______ times before your original application is voided.
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How long can a licensed contractor be liable for latent defects?
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When dealing with a public works project, a stop notice is used to:
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The acceptance period in the bidding process of construction projects is a period of______ days.
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If asbestos is found in a home improvement project, the responsible party for the abatement is:
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Prime contractor and a subcontractor have what kind of relationship?
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Which of the following is considered a direct cost?
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When a contractor discovers a hazardous material, the contractor must inform the:
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How does a contractor pay for his/her delivery materials?
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Study Notes
Depreciation and Assets
- Depreciation is applicable to fixed assets, not loans or current assets.
Employment Verification
- Private employers with 15 or more employees as of July 1, 2010, must use a status verification system like E-Verify for new hires.
Contract Price Changes
- A contractor can increase the contract price only with a written and signed change order, agreed upon by both parties.
Waiver and Release
- An unconditional waiver and release from a subcontractor means they cannot claim further payment from the owner after signing.
License Denial Review
- Applicants denied a license can request agency review within 30 days of denial notification.
Project Specification Discrepancies
- Contractors must inform the owner if project specifications do not match existing building conditions before proceeding.
Importance of Accounting Records
- Keeping accurate accounting records supports effective management, financial statements, and financing opportunities.
Construction Guarantees
- Guarantees in construction law ensure that a guarantor will rectify another party's mistakes or defaults.
Construction Plans
- Plans for home improvement projects primarily detail layout sizes and specifications.
Tax Record Retention
- Employers are required to keep records of FUTA and federal taxes for a minimum of four years.
Quantity Estimation
- A "takeoff" is a detailed listing of quantities for each work item used in construction estimations.
Asbestos Regulations
- Contractors must check for asbestos in buildings constructed before 1978 prior to initiating work.
Advertising Requirements
- Contractors must include their license number in advertisements to ensure legitimacy.
Public Work Specifications
- Open specifications are typically used for public works projects.
License Application Process
- Applicants must complete a license application after passing the required state exams.
Verification of Licensing
- The Utah Department of Professional Licensing is the reliable source for verifying a contractor's license status.
Contract Initiation
- A letter of intent is necessary if work must begin before that contract is formally signed.
Required Insurance
- Public liability insurance must be purchased prior to submitting application to the Department of Professional Licensing.
Fixed Expenses
- Overhead costs are generally classified as fixed expenses, which do not vary significantly over time.
Retention Payments
- Retention refers to the practice of withholding payment to ensure project completion and defect correction.
Financial Resources
- Equity signifies the total financial resources available to a contractor.
Prime Contracts
- Specifications outline the limitations of each prime contract on a construction project.
License Renewal Responsibility
- Licensees must maintain current contact information to receive renewal notifications from the Department of Professional Licensing.
Asbestos Discovery Protocol
- If more than 0.1 of asbestos is found, the contractor must contact OSHA for further directives.
Contract Cancellations
- Cancellation of a contract formally takes effect when written notice is delivered to the seller.
License Hold Period
- Applicants cannot work until their license is issued after application submission.
Overstated Debts
- Failing to account for equipment depreciation leads to overstated debts on a balance sheet.
Preliminary Notice Requirement
- Preliminary notice must be filed within 20 days of commencing work to preserve rights.
License Reinstatement Limits
- A license cannot be reinstated within 90 days of a disciplinary action unless specified otherwise by the division.
OSHA Work Stoppage Authority
- OSHA can stop work at a site until all unsafe conditions are addressed.
Safety Precautions with Explosives
- Maintain a minimum distance of 25 feet between explosives and electrical wiring.
Payment and Performance Bonds
- Payment and performance bonds ensure the contractor's obligations for materials, labor, and supplies are met.
Injury Reporting
- Written reports are mandatory for injuries requiring more than first aid or necessitating an employee's return to work.
General Conditions of Contracts
- General conditions define the obligations and relationships of the parties involved in a contract.
DOPL Authority
- The DOPL has the authority to enforce contractor warranties.
Minor Wage Regulations
- Minors must receive the same pay as adult employees for similar work performed.
Examination Attempts
- Applicants are allowed three attempts to pass the contractor license exam within an 18-month period.
Latent Defect Liability
- Contractors can be held liable for latent defects for a period of 10 years.
Stop Notice in Public Works
- A stop notice is used to withhold enough funds from a prime contractor to ensure subcontractors are paid.
Bidding Acceptance Period
- The acceptance period for construction bids is typically 30 days.
Asbestos Abatement Responsibility
- Homeowners are responsible for hiring licensed professionals for asbestos removal.
Contractor-Subcontractor Relationship
- Contractors and subcontractors maintain a contractual relationship.
Direct Costs in Construction
- Payroll tax is categorized as a direct cost associated with construction.
Hazardous Material Reporting
- Contractors must inform homeowners when hazardous materials are discovered at a worksite.
District Court Jurisdiction
- District courts deal with federal law cases, constitutional issues, and interstate disputes.
Sole Proprietorship Structure
- A sole proprietorship is run by a single individual.
Labor Rights Legislation
- The National Labor Relations Act of 1935 establishes workers' rights to unionize and negotiate.
Home Solicitation Contract Cancellation
- The cancellation deadline for a home solicitation contract is Monday midnight following a Thursday signing.
OSHA's Objective
- OSHA's purpose is to adopt and enforce safety and health regulations in the workplace.### OSHA and Compliance
- OSHA aids employers in voluntarily adhering to safety and health laws.
- OSHA makes decisions on appeals concerning safety and health citation violations.
- Permits and registration are issued by OSHA for contractors engaging in asbestos-related work.
Liability Insurance and Licensing
- Active contractor licenses in Utah necessitate ongoing liability insurance and financial responsibility.
- Inactive licenses are exempt from these insurance and financial responsibilities.
FICA and Tax Reporting
- Employers must report withheld income taxes (Form 941) quarterly.
Insurance Cost Management
- To reduce insurance costs without increasing risk, compare premiums and coverage annually.
Disputes in Contracts
- The rejection of sub-contractors is the least likely cause for disputes between contractors and owners.
Payroll Taxes
- Federal Income Tax (FIT) does not have a cap; it is considered unlimited compared to other payroll taxes.
Insurance Acquisition
- The most effective approach to acquire economical insurance is to compare quotes from various agents.
Bidding Documentation
- The "Reform of Bid" is included in the bidding documents under "Instructions to Bidders".
Employee Documentation Requirements
- Employees must submit completed Form W-4 at the beginning of their employment.
1099 Issuance
- A contractor must issue a 1099 form to any nonemployee paid $600 or more for services in a year.
Home Improvement Contracts
- The "Notice of right to cancel" appears near the client's signature on home improvement contracts.
Time Card Recordkeeping
- A time card should detail the day and hours worked as well as a description of the work performed.
Mechanics' Liens
- In a mechanics' lien, the owner holds the responsibility for the associated debts.
Pre-employment Costs
- Employers typically cover the costs of pre-employment physical examinations.
License Inactivation
- Contractors can apply for an inactive professional license status, but fees and renewal criteria still apply.
Inventory Assessment
- The best practice to determine if additional materials are needed involves comparing material lists from similar jobs.
Specifications in Contracts
- Base bid specifications describe materials and construction methods without reference to specific brands.
Change Order Management
- The general contractor is responsible for maintaining records of all changes and decisions during the project.
Quality Assurance in Contracts
- Contractors must ensure completed projects meet specified quality standards in the contract documentation.
Accounting Methods
- Accrual accounting is recognized as the most accurate accounting method.
Change Order Disputes Prevention
- Including the change order procedure in the original contract can prevent future disputes.
Bonding in Contracts
- The owner is identified as the obligee in a bond arrangement related to contract performance.
Hazardous Materials Recordkeeping
- Contractors are required to keep records for employees exposed to hazardous materials for 30 years.
Job-Related Direct Costs
- Performance bonds are classified as job-related direct costs in construction.
Contracting with Unlicensed Individuals
- Both the contractor and the unlicensed individual are in violation of the law if a contract is made without proper licensing.
Employee Time Card Retention
- Employers must keep an employee's time card for one year post-termination.
Federal Overtime Laws
- Overtime laws are classified as federal regulations.
I-9 Documentation Compliance
- Lack of a Social Security card may not be a sufficient standalone document for completing an I-9 form.
Construction Specifications and Compatibility
- Dimensional stability is not associated with the compatibility characteristics in construction specifications.
Acceptance of Jobs without Loans
- Contractors may accept jobs from owners lacking pre-approved loans under emergency conditions with verified high income and good credit.
Notice to Owner Purpose
- A "Notice to Owner" informs that a property can be liened.
Contractor Requirements by State
- Contractors are generally required to have some form of insurance or bonding to operate legally.
Safety Procedure Communication
- Employers must provide safety procedure information when new employees are hired.
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Test your knowledge with these flashcards designed for the Utah Contractor Exam. Covering essential topics such as depreciation of assets and employment verification systems, these cards provide a quick and effective way to study for the exam.