MHIC NASCLA Contractors Exam Review, Exams of Contract Law

Download MHIC NASCLA Contractors Exam Review and more Exams Contract Law in PDF only on Docsity! MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers Yes - correct answer ✅Does home improvement include work done on an individual condominium unit? Yes - correct answer ✅Does home improvement include work done on a swimming pool? Yes - correct answer ✅Does a home improvement contract HAVE to be in writing in order to preserve your lien rights? Subcontractors - correct answer ✅Contractors who can only contract with a contractor or a subcontractor are: Cannot - correct answer ✅A county or municipality in Maryland _____________ require a contractor to get authorization from an official in that city to be able to contract in that municipality. Can - correct answer ✅A county or municipality in Maryland _______________ regulate the character, performance and quality of home improvement. 7 - correct answer ✅How many members are there in the Maryland Home Improvement Commission? MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers 3 - correct answer ✅Of the 7 members on the Commission, how many are experienced in home improvement? 4 Years - correct answer ✅What is the term of a member on the Commission? Associated Answers 5 years - correct answer ✅How long must a person be a citizen and member of Maryland before they can be appointed to the Commission? True - correct answer ✅It is illegal for a member of the Commission to receive any compensation from a person regulated by the Commission. 12 times a year - correct answer ✅How often does the Commission hold meetings at a minimum? Executive Director - correct answer ✅The _______________ is a full time employee of the State. the Director of the Commission - correct answer ✅People hired to investigate complaints about home improvement projects work under: 1. injunctive relief against the conduct MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers No - correct answer ✅The financial information provided by an applicant is public information. 10 days - correct answer ✅If an application for a license is denied, the applicant can request a hearing within ______________ after the notice of denial is mailed. True - correct answer ✅A salesperson will not be issued a license until the salesperson becomes employed or contractually involved with a licensed contractor. no more than $50 - correct answer ✅What is the fee to place a license on inactive status? All of the above - correct answer ✅A person whose license is put on inactive status... 1 must return their license to the State. 2 doesn't have to maintain the required liability insurance coverage. 3 must not do any contracting. 4 all of the above. MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers Yes - correct answer ✅Must a contractor, sub-contractor, or salesperson who places their license on inactive status pay a fee to renew an inactive license? 10 days - correct answer ✅How many days does a licensee have to notify the Commission of change in control in ownership, management, address or trade name? 2 - correct answer ✅How many contractors may a salesperson represent? No - correct answer ✅Jim Smith is a Sales Representative for ABC Construction. Can he accept a position as a Sales Representative for Top Notch Construction without first informing ABC Construction of his intentions and also informing Top Notch Construction of his existing situation with ABC Construction? give the commission written notice - correct answer ✅When a sales person is no longer associated with a company they represented, the contractor must: all of the above - correct answer ✅The Commission may suspend or revoke a license if the licensee: MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers 1 lies on their application 2 practices fraud while being licensed 3 is convicted of a felony 4 all of the above True - correct answer ✅A contractor may not pay a subcontractor who is required to be licensed unless the subcontractor holds the required license. False - correct answer ✅Licensed Home Improvement Contractors are also required to hold a construction license issued by the Clerk of the Court under Title 17. actual loss - correct answer ✅Home owners have a right to bring a claim against the Guaranty Fund for situations of _________________________ concerning restoration, repair, replacement or completion that arise from unworkmanlike, inadequate, or incomplete home improvement. $100 - correct answer ✅What is the fee a Home Improvement Contractor must pay into the Guaranty Fund before the Commission will issue a license? MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers True - correct answer ✅It is against the law for building and permits departments to issue a permit to a contractor without the contractor's license number. True - correct answer ✅If a contractor fails to correct a violation of the building code within a reasonable time period, the county or municipality inspecting the project shall notify the Commission. $1,000 and/or 6 months in jail or both - correct answer ✅What is the maximum fine for contracting without a license - first offense? $5,000 and/or 2 years in jail or both - correct answer ✅What is the maximum fine for contracting without a license - second offense? Yes - correct answer ✅Contractor, Jack Smith, is not getting along with Hector Jones, his customer. If he decides not to complete the contract, has Jack broken any law? No - correct answer ✅Can a contractor decide to use a material other than specified in the contract documents without getting permission from the owner? All of the above - correct answer ✅Contractors may not: MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers 1 misrepresent their service or product 2 make false promises 3 lie on their license application 4 all of the above All of the above - correct answer ✅Contractor, Jack Brown, makes a deal with customer, Ameal Cougar, to provide an estimate of $40,000 on a project where the actual costs are $30,000, allowing Ameal to pocket $10,000 after securing a mortgage at $40,000 and paying off Jack. This is: 1 fraud 2 an illegal act 3 a misdemeanor 4 all of the above True - correct answer ✅A licensed salesperson can only sell the services of licensed contractor or subcontractors. True - correct answer ✅If a contractor's salesperson stops selling or working with the contractor for any reason, the contractor has a responsibility to the State to inform the Commission. MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers True - correct answer ✅All advertising has to provide the identifier "Maryland Home Improvement Commission License No ______________" or "MHIC#__________". $5,000 - correct answer ✅What is the maximum penalty the Commission may impose upon a contractor, licensed or unlicensed, per violation of these laws: True - correct answer ✅Advertising must be done in a way as to avoid misrepresenting the product, service or terms of sale so as not to deceive the customer. True - correct answer ✅An applicant must provide to the Commission, a credit report with their application. 10 days - correct answer ✅How many days does a contractor have to respond to a receipt of a claim from the commission? perform repairs for a homeowner. - correct answer ✅A Home Improvement Contractor is a person who offers to... $500 - correct answer ✅What is the MAXIMUM deposit permitted for a project with a total contract price of $1,500? MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers the name and address of the seller. - correct answer ✅All door-to-door sales contracts MUST include (what two things)? $1,175 - correct answer ✅The cost of a project includes $1,000 for goods and services, $50 for delivery, and $125 for interest. What is the purchase price for this contract? noon on Thursday, September 27. - correct answer ✅A contract is signed at noon on Thursday, September 20. The buyer can cancel this contract anytime up until... In order for a contractor to present a proposal to a customer, they first have to create a cost estimate of the entire project. Review the project documents (drawings, specifications, contracts and bonds). Attend all pre-bid meetings. Determine costs of labor, materials, equipment and subcontractors. Consider the degree of difficulty the job poses, the overhead involved, and the profit expected. Conduct a site visit! - correct answer ✅Estimate Planning counting the number of items associated with a particular construction project, determining the associated materials and labor costs, and formulating a bid (or estimate) as part of the bidding process. Quantity take-off is also applied to the pricing process. First determine labor costs (by considering historical information) and burden (employment MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers taxes and insurance). Figure out materials, allowances and contingencies, and how they will impact the outcome of the project. Include the direct costs of rented or leased equipment. Also consider: * Subcontractors if needed * Project overhead * Company overhead * Add markup for profit being careful to keep your bid competitive - correct answer ✅The Quantity Take-off Method involves The cost of labor will vary from job to job. Historical information will help you arrive at an accurate estimate. - correct answer ✅Labor Costs Labor burden refers to the "indirect" administrative costs of employing laborers. The cost of employment taxes and insurance (Medicare, Social Security, unemployment insurance, workers' compensation, liability insurance etc.) must be considered. Indirect labor costs can range from 25 to 70 percent of the base wage rate, and once that percentage is determined, it should be added to the direct labor costs to come up with a single hourly or "shop" rate. - correct answer ✅Labor Burden. MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers The costs of materials can fluctuate, and it is important to be current in your estimate of material costs. Be sure to get several bids from each supplier. Add contingency costs for waste. - correct answer ✅Materials Large equipment required to complete a project, for example a loader needed for moving stockpiled dirt for removal, is considered a direct cost. These costs will differ depending on whether or not you own or rent the equipment. If you own, calculate the unit cost of the equipment by determining the actual value (depreciation from original price), operation and maintenance costs, taxes and fees, labor and insurance. If the equipment is rented, factor in the rental rate, delivery fees, labor, fuel etc. Finally, the option of subcontracting the work is available, and this cost would appear under subcontractor fees. - correct answer ✅Equipment Cost. Contingencies are added to allow for unanticipated problems. Adding contingency costs to the estimate from the start allows more flexibility to absorb these additional expenses without going over budget. - correct answer ✅Contingencies These are costs (soft costs) that are associated with the project, but are not labor and materials. Examples of project overhead are: utilities, temporary storage and office costs, security, dumpsters and sanitation. Determine project overhead by adding all your project costs from the previous year, and then divide that number by your revenues to arrive at your overhead percentage. - correct answer ✅Project Overhead MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers all of the above are benefits provided to an injured employee if needed - correct answer ✅What benefit is provided to an injured employee if needed? 1 Wage replacement and payment for loss or permanent damage to body parts 2 Rehabilitation costs 3 Current and future medical costs 4 All of the above 10 days - correct answer ✅If, due to an injury that occurred at work, an employee is unable to return to work after three work days, how long does the employer have to report this accident to the Workers Compensation Commission? Up to $5000 fine, imprisoned for one year, or both - correct answer ✅What is the penalty for not providing Workers Compensation Insurance to your employee(s)? Department of Labor, Licensing and Regulation - correct answer ✅What governmental department in Maryland administers the Laws for Unemployment? MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers 20 days - correct answer ✅After how many days of conducting business with an employee is an employer in violation of the law if they have not yet registered for Unemployment Insurance? New Account Rate - correct answer ✅Which of the following rates is for unemployment insurance that is the average rate paid by all employers over the last five years? True - correct answer ✅Employers are required to pay a percentage of the first $8,500 of wages for each employee to cover the cost of unemployment insurance. This is 100% an employer expense. No minimum of twice a month - correct answer ✅Can an employer legally pay an hourly wage earner only once a month? No - correct answer ✅Can an employer, as a form of disciplinary action, legally doc an employee's earned wage? $7.25 /hr - correct answer ✅What is the federal minimum wage? True - correct answer ✅After working more than 40 hours in a seven day week, employees in the building trades would be paid 1 1/2 times their usually hourly pay for those hours over 40. MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers $4.25 - correct answer ✅If a new employee is under 20 years of age, what is the required minimum wage during their first 90 consecutive calendar days of employment? True - correct answer ✅In the absence of an express contract, employees may be hired or fired for almost any reason - whether fair or not - or for no reason at all. True - correct answer ✅Can an employer legally require an employee to be tested for the illegal use of drugs and alcohol for a "legitimate business purpose".? True - correct answer ✅Minors between 14 and 17, in order to be gainfully employed, must have a work permit. A workweek is considered 168 hours during seven 24 hour periods. It may begin on any day of the week and at any hour of the day - correct answer ✅Workweek Defined under FLSA 1. Employee's full name and social security number. 2. Address, including zip code. 3. Birth date, if younger than 19. MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers -Equal Pay for Equal Work -Employment of Minors -Unemployment Insurance and Benefits -Unemployment Insurance Coverage -Workers' Compensation Commission Notice C-24 -Employment Discrimination is Illegal -Occupational Safety and Health Law (MOSH) - correct answer ✅Required Postings. -Safety and Health Protection on the Job -Equal Opportunity is the Law -Employee Rights for Workers with Disabilities -Your Rights under the Family Leave and Medical Leave Act -FLSA Minimum Wage Poster - correct answer ✅Federal postings that may apply to you: 3 years from discovery of the loss or damage - correct answer ✅How long does a claimant have to bring a claim against the guaranty fund? 10 days - correct answer ✅How many days does a contractor have to respond in writing to the copy of claim that was sent by the commission? MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers 60 days - correct answer ✅If within ________ after the commission gives notice , a contractor on whose amount a claim was paid does not reimburse the fund in full, the commission may sue the contractor for reimbursement. 10 % - correct answer ✅In addtion to full reimbursement of the fund, a contractor is responsible to pay at least _________interest on the amount to reimburse. True - correct answer ✅The state can record a lien against any real property owners by the contractor for a debt owed to the fund. True - correct answer ✅If the commission pays a claim from the fund base on the actions or omissions of a contractor, the commission may suspend the contractors license until full reimbursement of the fund plus at least 10%interest Names and license numbers of subcontractors - correct answer ✅A home improvement contract in compliance with the home improvement laws would include all of the following except True - correct answer ✅A salesperson may not represent 2 contractors at the same time for the same project. MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers No - correct answer ✅Can a sales person legally accept money for themselves from the customer True - correct answer ✅It is against the law for building and permits departments to issue a permit to contractor without the contractors license number. True - correct answer ✅If a contractor fails to correct violation of the building code within reasonable time period, the county or municipality inspecting the project shall notify the commission $5,000 and/or 2 years in jail or both - correct answer ✅What is the maximum fine for contracting without a license-second offense Yes - correct answer ✅Contractor, jack smith, is not getting along with hector jones , his customer. If he decides not to complete the contract, has jack broken any laws? No - correct answer ✅Can a contractor decide to use material other than specified in the contract documents without getting permission from the owner? Lie on their license application MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers Yes - correct answer ✅If a consumer, by phone, contacted a roofing company and asked for a bid for their home, and the contract is signed at the home of the consumer without ever going to the office of the roofing company, is this sale subject to the laws of the Door-to-Door Sales Act? Yes - correct answer ✅Can a buyer waive his right to cancel a contract that would fall into the category of situations that this law covers in emergency situations? No - correct answer ✅When a buyer initiates the contact and requests a contractor to visit the home to make a repair or perform maintenance, is this sale to repair or maintain this home subject to the Door-to-Door Sales Act? No - correct answer ✅If a customer made a purchase entirely over the phone or by mail, would this sales be subject to the Door-to-Door Sales Act? True - correct answer ✅Contractors cannot fail to provide a copy of the contract entered into between the contractor and this customer at the time this contract is executed. 10 points - correct answer ✅The contract or sales receipt must inform the buyer in BOLDFACE TYPE a minimum size of __________ points in MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers the area where their signature is required on the document that "You, the buyer, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction." Notice of Cancellation - correct answer ✅Where applicable, contractors must provide to their customers the form titled, ________________________ at the time of the sale. 10 business days - correct answer ✅If a customer cancels their transaction with you, how long do you have to return property traded in and money exchanged? the seller - correct answer ✅If a customer cancels their transaction with you and agrees to ship the purchased item back to the seller, who pays for the shipping? 20 days (NOT 20 business days!) - correct answer ✅If a customer makes the goods available to the seller at their residence and the seller does not pick them up, at what point does the customer get to keep the goods? All of the above - correct answer ✅The "Notice of Cancellation" that must be provided to the buyer at the time of the sale must be complete and in duplicate providing: 1 Name of Seller MHIC NASCLA CONTRACTORS EXAM REVIEW Questions and Answers 2 Address of place of business 3 Date of transaction and the date not earlier than the third business day following the transaction that the customer can cancel. 4 All of the above True - correct answer ✅A seller, by law, has to, at the time of sale, orally explain to the customer of their right to cancel. all of the above - correct answer ✅What are the possible repercussions of violating the Door-to-Door Sales Act laws? 1 Repayment of any damages plus paying the customer's attorney's fees 2 Guilty of a misdemeanor 3 Can be fixed $1,000 fine or 1 year in jail or both 4 All of the above $25.00 - correct answer ✅Door-to-Door Sales Act applies to sales, lease or rental of consumer goods or services under single or multiple contracts with a purchase price of ____________ or more. - correct answer ✅Can an employer legally require an employee to be tested for the illegal use of drugs and alcohol?