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AZ General Contractor study materials
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AZ General Contractor practice questions

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Question 1Arizona Statutes, Rules, and Contractor Regulation

A homeowner hires a person to remodel a bathroom for $8,000. The person is not licensed and has no exemption. Under Arizona law, what is the person's status?

  1. The person must hold a contractor license for compensated work. Correct answer.
  2. The person may work without a license because the project is residential.
  3. The person may work without a license if the homeowner supervises the work.
  4. The person may work without a license because the price is below $10,000.

Explanation

Arizona requires a contractor license for construction, alteration, and repair work performed for compensation unless a specific exemption applies. Residential projects and small-dollar projects are not automatically exempt, and homeowner supervision does not create a licensing exemption.

Question 2Arizona Statutes, Rules, and Contractor Regulation

A licensed Arizona contractor uses its own hourly employees for framing work. Which statement is correct?

  1. The employees must form a separate partnership.
  2. The contractor's license covers only the owner, not employees.
  3. Each employee must hold an individual contractor license.
  4. The employees may work under the contractor's license. Correct answer.

Explanation

Employees of a licensed contractor may perform work within the scope of the contractor's license under the contractor's supervision. They do not each need an individual contractor license for that employment.

Question 3Arizona Statutes, Rules, and Contractor Regulation

A licensed contractor sells its business. What happens to the contractor license?

  1. The license cannot transfer; the buyer needs its own license. Correct answer.
  2. The license transfers to the buyer if a transfer fee is paid.
  3. The license transfers automatically to the buyer without any new application.
  4. The license transfers if the seller remains an employee.

Explanation

An Arizona contractor license is issued to a specific licensee and is not transferable to another person or entity. A buyer of the business must qualify for and obtain its own license.

Question 4Arizona Statutes, Rules, and Contractor Regulation

Which Arizona agency is responsible for licensing contractors and investigating contractor complaints?

  1. Arizona Department of Revenue
  2. Arizona Attorney General's Office
  3. Arizona Registrar of Contractors Correct answer.
  4. Arizona Corporation Commission

Explanation

The Arizona Registrar of Contractors administers contractor licensing and handles complaints involving licensed contractors. It is the state agency with primary contractor regulatory authority.

Question 5Arizona Statutes, Rules, and Contractor Regulation

A licensed Arizona contractor advertises in a local newspaper. What must the advertisement include?

  1. The expiration date of the contractor's driver license
  2. The contractor's license number Correct answer.
  3. The contractor's Social Security number
  4. The name of the contractor's insurance carrier

Explanation

Arizona contractor advertising rules require the contractor's license number to be included in advertisements. This helps the public verify that the advertiser is licensed.

Question 6Arizona Statutes, Rules, and Contractor Regulation

Who appoints the Registrar of Contractors in Arizona?

  1. The contractors' association
  2. The Chief Justice
  3. The Arizona Senate
  4. The Governor Correct answer.

Explanation

The Registrar of Contractors is appointed by the Governor to lead the Arizona Registrar of Contractors. The Registrar administers contractor licensing and enforcement.

Question 7Arizona Statutes, Rules, and Contractor Regulation

An unlicensed person submits a bid to build a commercial building. Is this permitted under Arizona contractor law?

  1. Yes, if the bid is under $25,000.
  2. Yes, because bidding is not considered contracting under Arizona law.
  3. No, a license is required to bid on licensed work. Correct answer.
  4. No, unless the owner also lacks a license.

Explanation

Arizona law prohibits an unlicensed person from submitting a bid or offer to contract for work that requires a contractor license. Bidding is treated as part of the regulated contracting activity.

Question 8Arizona Statutes, Rules, and Contractor Regulation

A licensed general contractor hires an electrical subcontractor. What must the general contractor confirm about the subcontractor?

  1. That the subcontractor holds the required contractor license. Correct answer.
  2. That the subcontractor carries no insurance.
  3. That the subcontractor has a business license from the city.
  4. That the subcontractor has at least five employees.

Explanation

A contractor must ensure that subcontractors are properly licensed for the work they perform. A city business license is not a substitute for the required Arizona contractor license.

Question 9Arizona Statutes, Rules, and Contractor Regulation

Which item is required in a residential construction contract under Arizona contractor rules?

  1. The name of the contractor's bank
  2. The contractor's exam score
  3. The contractor's license number Correct answer.
  4. The contractor's home address

Explanation

Residential construction contracts must be written and include specified information, including the contractor's license number. This allows homeowners to verify licensure and identify the licensed entity.

Question 10Arizona Statutes, Rules, and Contractor Regulation

An Arizona corporation applies for a contractor license. What is required for the corporation's license?

  1. The corporation must have a qualifying party. Correct answer.
  2. Every corporate officer must pass the trade exam.
  3. The corporation must be owned by a licensed contractor.
  4. The corporation must have at least ten licensed employees.

Explanation

An entity seeking an Arizona contractor license must have a qualifying party who meets the experience and examination requirements. The qualifying party ties the entity to the licensed classification.

Question 11Arizona Statutes, Rules, and Contractor Regulation

Before being licensed as a general contractor in Arizona, the qualifying party generally must do which of the following?

  1. Pass the trade and business management exams. Correct answer.
  2. Join a statewide contractors association.
  3. Complete a four-year college construction degree.
  4. Post a cash deposit with the Attorney General.

Explanation

The qualifying party generally must pass the required trade examination and business management examination. These exams test technical and business knowledge relevant to contracting.

Question 12Arizona Statutes, Rules, and Contractor Regulation

A licensed contractor changes its business address and its qualifying party. What must the contractor do?

  1. Report only the address change to the city.
  2. Wait until the next license renewal to report the changes.
  3. Notify the Registrar of Contractors of the changes. Correct answer.
  4. Close the license and reapply as a new applicant.

Explanation

A licensee must keep the Registrar of Contractors informed of changes affecting the license, including address and qualifying party changes. Reporting only at renewal or only to a city is insufficient.

Question 13Arizona Statutes, Rules, and Contractor Regulation

How often must an Arizona contractor license generally be renewed?

  1. Every two years Correct answer.
  2. Every year
  3. Every four years
  4. Every six years

Explanation

Arizona contractor licenses are generally renewed on a two-year cycle. Renewal requirements and fees apply at the end of each license period.

Question 14Arizona Statutes, Rules, and Contractor Regulation

A first conviction for contracting without a required Arizona license is generally classified as what?

  1. A civil infraction with no penalty
  2. A class 2 felony
  3. A federal offense
  4. A class 1 misdemeanor Correct answer.

Explanation

Contracting without a required Arizona license is generally a class 1 misdemeanor for a first offense. Repeat or aggravated circumstances may carry more serious consequences.

Question 15Arizona Statutes, Rules, and Contractor Regulation

The Arizona Contractor's Recovery Fund is primarily intended to help which group?

  1. Commercial developers seeking lost profits on a delayed project
  2. Building suppliers collecting unpaid invoices
  3. Homeowners harmed by a licensed residential contractor Correct answer.
  4. Licensed contractors paying subcontractors

Explanation

The Recovery Fund is designed to provide limited monetary relief to residential homeowners harmed by certain acts of licensed residential contractors. It is not a general collection remedy for commercial parties or suppliers.

Question 16Arizona Statutes, Rules, and Contractor Regulation

Under Arizona's owner-builder exemption, an individual may generally do what without a contractor license?

  1. Build a home for the individual's own use Correct answer.
  2. Construct commercial buildings for lease
  3. Act as a subcontractor on another person's home
  4. Build and sell speculative homes for profit

Explanation

The owner-builder exemption generally allows an individual to build a single-family residence for personal use without a contractor license. It does not authorize speculative building, commercial construction, or subcontracting for others.

Question 17Arizona Statutes, Rules, and Contractor Regulation

A homeowner files a workmanship complaint against a licensed contractor with the Registrar of Contractors. What may the Registrar do?

  1. Award punitive damages to the homeowner.
  2. Order the homeowner to arbitrate before any investigation.
  3. Criminally prosecute the contractor in superior court.
  4. Investigate and, if warranted, discipline the license. Correct answer.

Explanation

The Registrar of Contractors may investigate complaints and take administrative disciplinary action against a license when violations are substantiated. The Registrar does not act as a criminal prosecutor or award punitive damages.

Question 18Arizona Statutes, Rules, and Contractor Regulation

The Registrar determines that an unlicensed person is actively contracting. What enforcement tool may the Registrar use?

  1. File a lien against the person's property.
  2. Issue a cease and desist order. Correct answer.
  3. Suspend the person's driver license.
  4. Issue a contractor license to the person immediately.

Explanation

The Registrar may issue a cease and desist order to stop unlicensed contracting activity. Licensing requires a separate application and qualification process.

Question 19Arizona Statutes, Rules, and Contractor Regulation

What is the purpose of the license bond required of Arizona contractors?

  1. To guarantee the contractor will win every bid submitted
  2. To pay the contractor's income taxes and other state obligations
  3. To provide recovery for persons harmed by licensee violations Correct answer.
  4. To fund the contractor's advertising expenses

Explanation

The contractor license bond provides a financial source of recovery for persons harmed by certain violations of contractor licensing law. It is not a tax payment or business marketing fund.

Question 20Arizona Statutes, Rules, and Contractor Regulation

A contractor holds a specialty license for swimming pools. The contractor is offered a job to build a house. What is the correct action?

  1. Accept the job and notify the Registrar after completion.
  2. Accept the job because any license allows any construction work.
  3. Decline the job unless the proper classification is obtained. Correct answer.
  4. Accept the job if the contractor hires a licensed architect.

Explanation

A contractor may perform only work within the scope of the license classification held. Building a house generally requires the appropriate residential or general building classification.

Question 21Arizona Statutes, Rules, and Contractor Regulation

A licensed Arizona corporation's qualifying party resigns. The corporation continues contracting without replacing the qualifying party. What is the likely consequence?

  1. The license may be suspended for lack of a qualifying party. Correct answer.
  2. The license remains fully valid until the next renewal.
  3. The employees may qualify the license without ROC approval.
  4. The corporation automatically becomes a sole proprietorship.

Explanation

An entity license depends on having a qualifying party. If the qualifying party leaves and is not replaced, the license may be suspended or disciplined.

Question 22Arizona Statutes, Rules, and Contractor Regulation

Which situation is most consistent with a valid claim against the Arizona Contractor's Recovery Fund?

  1. A subcontractor seeks unpaid wages from a licensed contractor.
  2. A supplier seeks payment for materials sold to an unlicensed contractor.
  3. A homeowner has an unsatisfied judgment against a licensed contractor. Correct answer.
  4. A commercial owner seeks lost rent from a licensed contractor's delay.

Explanation

The Recovery Fund may provide relief to residential homeowners who obtain an unsatisfied judgment or order against a licensed residential contractor for covered conduct. It is not a general remedy for suppliers, commercial lost rent, or subcontractor wage claims.

Question 23Arizona Statutes, Rules, and Contractor Regulation

Which of the following is a ground for disciplinary action against an Arizona contractor license?

  1. Abandoning a project without legal excuse Correct answer.
  2. Hiring employees who are not licensed contractors
  3. Using a written contract with a license number
  4. Completing work according to the approved plans

Explanation

Abandoning a construction project without legal excuse is a recognized ground for contractor discipline. Proper contracting and compliant work are not violations.

Question 24Arizona Statutes, Rules, and Contractor Regulation

An applicant knowingly submits false experience information on an Arizona contractor license application. What is the likely regulatory result?

  1. The license may be denied or disciplined for fraud or misrepresentation. Correct answer.
  2. The application is automatically approved if the fee is paid.
  3. The false statement is allowed if the applicant later passes the exam.
  4. The Registrar must refer the matter only to the local building department.

Explanation

Knowingly providing false information on a license application is fraud or misrepresentation and can lead to denial, suspension, revocation, or other discipline. Passing the exam or paying a fee does not cure the false statement.

Question 25Arizona Statutes, Rules, and Contractor Regulation

An unlicensed contractor performs work that required an Arizona contractor license and then sues the homeowner for payment. What is the likely result under Arizona law?

  1. The contractor generally cannot recover payment for that work. Correct answer.
  2. The contractor may recover because the work was completed.
  3. The contractor may recover only if the amount is under $5,000.
  4. The contractor may recover if the homeowner praised the work.

Explanation

Arizona law generally bars an unlicensed contractor from maintaining an action to recover compensation for work that required a license. Completion of the work or homeowner approval does not ordinarily cure the licensing failure.

Question 26Arizona Statutes, Rules, and Contractor Regulation

Under Arizona contractor law, which item must appear in a licensed contractor's advertisements offering contracting services?

  1. The address of the Registrar's office
  2. The contractor's license number Correct answer.
  3. The name of the contractor's bonding company
  4. The expiration date of the contractor's license

Explanation

Arizona requires a licensed contractor to include its Registrar of Contractors license number in advertising, including print ads, websites, business cards, and vehicle signage. The purpose is to let consumers verify that the advertiser actually holds a license before hiring. Neither the bond carrier, the license expiration date, nor the agency's address is a required advertising element.

Question 27Arizona Statutes, Rules, and Contractor Regulation

A carpenter works for a licensed Arizona general contractor and is paid hourly wages as an employee. Does the carpenter need a separate contractor license for that work?

  1. Yes, unless the carpenter has at least four years of experience.
  2. Yes, but only when the work is on a residential project.
  3. Yes, every person who performs construction work must be individually licensed.
  4. No, the employee is covered by the employer's license. Correct answer.

Explanation

Arizona licensing requirements apply to persons who contract with the public for construction work, not to wage-earning employees of a licensed contractor. The employee works under the licensed contractor, who is responsible for the contract and the permit. The employee would need a license only if the employee separately bid or contracted with owners.

Question 28Arizona Statutes, Rules, and Contractor Regulation

A contractor licensed only in a specialty classification is offered work that falls outside that classification. What does Arizona law allow?

  1. The contractor may proceed if the owner signs a written waiver.
  2. The contractor may notify the Registrar and proceed.
  3. The contractor may proceed if the value is under $10,000.
  4. It may not bid or contract outside that classification. Correct answer.

Explanation

A contractor's authority is limited to the classification or classifications shown on its license. Bidding or contracting for work outside those classifications is a licensing violation that can lead to discipline. Owner waivers, small contract values, and informal notice to the Registrar do not expand the scope of a license.

Question 29Arizona Statutes, Rules, and Contractor Regulation

Arizona law requires a licensed contractor to perform contracted work in which manner?

  1. In a workmanlike manner Correct answer.
  2. In the fastest manner consistent with the schedule
  3. In the manner preferred by the building inspector
  4. In the least expensive manner available

Explanation

Arizona's contractor statutes make failure to perform in a workmanlike manner a ground for discipline. Workmanlike means work done in a manner consistent with accepted trade standards and applicable codes. Speed, cost, or one inspector's personal preference does not define the legal standard.

Question 30Arizona Statutes, Rules, and Contractor Regulation

A general contractor's license expires on June 30 while a kitchen remodel is still underway. The contractor keeps working through July and bills the homeowner for that work. What is the contractor's legal position?

  1. It was unlicensed contracting and may be disciplined. Correct answer.
  2. The work is lawful because the license lasts until the project ends.
  3. The work is lawful if the Registrar is notified within 30 days.
  4. The work is lawful because the license renews retroactively to June 30.

Explanation

A contractor must hold a valid license while bidding, contracting, and performing work that requires a license. Once the license expires, continued contracting is unlicensed activity subject to enforcement, even if renewal is later granted. Renewal does not retroactively make the intervening work lawful.

Question 31Arizona Statutes, Rules, and Contractor Regulation

A licensed contractor lets an unlicensed friend use the contractor's license number to pull permits and sign a client contract, in exchange for a fee. What is the result under Arizona law?

  1. It is lawful if the licensed contractor supervises the work daily.
  2. It is lawful if the friend pays the bond premium.
  3. It is a ground for discipline against the licensed contractor. Correct answer.
  4. It is lawful only if the Registrar approves it in writing.

Explanation

A license is personal to the licensee and may not be lent to or used by another person. Aiding an unlicensed person to contract, or allowing another to use one's license number, is a violation that supports suspension or revocation. Supervision, fee sharing, and bond payments do not make the arrangement lawful.

Question 32Arizona Statutes, Rules, and Contractor Regulation

A licensed contractor's required surety bond is cancelled by the carrier and the contractor does not obtain a replacement. What happens to the license?

  1. The license is automatically converted to inactive status.
  2. The license is unaffected because bonds are optional for residential work.
  3. The license remains active until the next renewal date.
  4. The license is suspended until a new bond is filed. Correct answer.

Explanation

Arizona requires licensed contractors to maintain a surety bond in the amount set for their classification. If the bond lapses or is cancelled and is not replaced, the license is suspended and the contractor may not lawfully contract. The contractor must file a new bond to restore active status.

Question 33Arizona Statutes, Rules, and Contractor Regulation

After investigating a homeowner's complaint, the Registrar finds that a licensed contractor's work did not meet workmanlike standards. What may the Registrar do?

  1. Do nothing, because the Registrar cannot review workmanship.
  2. Only refer the matter to the local building department.
  3. Order corrective work or restitution and impose discipline. Correct answer.
  4. Award the homeowner punitive damages against the contractor.

Explanation

The Registrar has authority to investigate workmanship complaints and, on finding a violation, to order the contractor to correct the work or pay restitution and to impose discipline on the license. The Registrar does not award punitive damages, which are for courts. Referral to a building department does not exhaust the Registrar's authority.

Question 34Arizona Statutes, Rules, and Contractor Regulation

A contractor sells its construction business, and the buyer wants to keep operating under the seller's license number. What does Arizona law require?

  1. The buyer may use the number for 90 days during a transition.
  2. The buyer may use the number if it hires the seller's qualifying party.
  3. The buyer must obtain its own license. Correct answer.
  4. The buyer may use the number if the seller consents in writing.

Explanation

A contractor license is issued to a specific person or business entity and is not transferable with the sale of a business. The buyer must apply for and obtain its own license before contracting. Hiring the seller's qualifying party may help the buyer qualify, but it does not transfer the license itself.

Question 35Arizona Statutes, Rules, and Contractor Regulation

Which situation is a ground for disciplinary action against an Arizona contractor?

  1. Declining to bid on work outside the contractor's classification
  2. Abandoning a project without justification before completion Correct answer.
  3. Filing a lien after not being paid for completed work
  4. Refusing a job because the owner will not sign a written contract

Explanation

Arizona lists abandonment of a construction project without justification as a ground for suspension or revocation of a license. The listed grounds focus on misconduct in performing contracted work. Turning down work, staying within one's classification, and pursuing lien rights are lawful conduct.

Question 36Arizona Statutes, Rules, and Contractor Regulation

During a complaint investigation, the Registrar sends a licensed contractor a written request for records. The contractor simply ignores it. What is the consequence?

  1. There is no consequence because the request is voluntary.
  2. The contractor must pay a fine only if the complaint is proven.
  3. Ignoring the request is itself a violation that can support discipline. Correct answer.
  4. The complaint is automatically dismissed.

Explanation

Licensees must cooperate with the Registrar's investigations, including responding to written requests for information and records. Failing to respond to a lawful request from the Registrar is a separate ground for disciplinary action. It does not make the complaint go away or suspend the investigation.

Question 37Arizona Statutes, Rules, and Contractor Regulation

An unlicensed person places an advertisement offering to perform roofing work that requires a contractor license, but has not yet signed any contract. Is a license required?

  1. No, advertising is protected speech and cannot be regulated.
  2. No, a license is required only once a contract is signed.
  3. Yes, advertising for licensed work requires a license. Correct answer.
  4. Yes, but only if the advertisement includes a price.

Explanation

Arizona prohibits unlicensed persons from advertising, bidding, or offering to perform work for which a contractor license is required. The licensing duty attaches before any contract is signed, at the point the person holds out to the public. Whether a price appears in the ad is irrelevant.

Question 38Arizona Statutes, Rules, and Contractor Regulation

The Registrar pays a homeowner's claim from the Contractor's Recovery Fund because of a licensed contractor's violation. What effect does this have on the contractor's license?

  1. The license is suspended until the contractor repays the fund. Correct answer.
  2. The license is unaffected, but the contractor receives a reprimand.
  3. The license is transferred to the homeowner as compensation.
  4. The license is placed on probation for six months.

Explanation

A contractor whose conduct results in a Recovery Fund payment must reimburse the fund. Until the amount is repaid with any required interest, the contractor's license remains suspended and the contractor may not lawfully contract. The obligation runs to the fund, not directly to the homeowner as a license transfer.

Question 39Arizona Statutes, Rules, and Contractor Regulation

A contractor receives a citation and an order to pay restitution from the Registrar, then ignores both. What authority does the Registrar have?

  1. Only collect the restitution through the contractor's surety bond.
  2. Only report the matter to the county attorney.
  3. Suspend or revoke the license for failing to comply with the order. Correct answer.
  4. Only send a second reminder letter, since citations are advisory.

Explanation

Failure to comply with a Registrar order is a separate ground for disciplinary action, in addition to the original violation. The Registrar may suspend or revoke the license and may also impose other remedies. A citation carries legal obligations and is not a mere advisory notice.

Question 40Arizona Statutes, Rules, and Contractor Regulation

A roofing contractor knocks on a homeowner's door, negotiates a repair job on the spot, and has the homeowner sign a contract that evening. The homeowner later has second thoughts. Under Arizona consumer protection law, what right does the homeowner have?

  1. The right to cancel only if the contract price exceeds $5,000.
  2. The right to cancel only if the contractor has not bought materials.
  3. None, because the contract was signed voluntarily.
  4. The right to cancel within three business days of signing. Correct answer.

Explanation

A contract solicited at the buyer's home is a home solicitation sale, and Arizona gives the buyer a three-business-day right to cancel. The contractor is expected to furnish written notice of that right at the time of signing. The right does not depend on materials purchased or on the contract price.

Question 41Business Management and Contract Law

Which Arizona agency is responsible for issuing and regulating contractor licenses?

  1. The Department of Administration
  2. The Corporation Commission
  3. The Department of Revenue
  4. The Registrar of Contractors Correct answer.

Explanation

Arizona contractor licensing is administered by the Registrar of Contractors (ROC). The ROC issues, suspends, and revokes contractor licenses, administers the qualifying-party exam, and investigates complaints against licensed contractors.

Question 42Business Management and Contract Law

Under Arizona law, a contractor's license is generally required before performing construction work priced at or above which amount?

  1. $1,000 Correct answer.
  2. $2,500
  3. $500
  4. $5,000

Explanation

Arizona requires a contractor's license when the total cost of the work, including labor and materials, is $1,000 or more. Below that threshold, a license is not required.

Question 43Business Management and Contract Law

An Arizona residential remodeling contract states a total price of $12,000. Which item must appear in that contract?

  1. A recorded notice of completion
  2. A notarized signature from both parties
  3. The contractor's ROC license number Correct answer.
  4. A bid bond equal to ten percent of the price

Explanation

A.R.S. § 32-1158 requires residential contracts exceeding $1,000 to be in writing and to include the contractor's name, business address, and ROC license number, together with the scope of work, price, and payment schedule.

Question 44Business Management and Contract Law

A licensed general contractor hires a framing subcontractor to perform $6,000 of work on a new home. Which statement is correct?

  1. The subcontractor must hold its own Arizona contractor's license Correct answer.
  2. The subcontractor is exempt because the general contractor is licensed
  3. The subcontractor may work under the general contractor's license
  4. The subcontractor needs a license only if the owner requires it

Explanation

Licensing applies to each person or firm that contracts to perform construction work. A subcontractor performing work valued at $1,000 or more must hold its own license in the proper classification; coverage under another party's license is not permitted.

Question 45Business Management and Contract Law

What is a mechanics lien?

  1. A court judgment obtained by an employee for unpaid wages
  2. A bond posted by a contractor to guarantee warranty work
  3. A contract clause allowing the owner to withhold final payment
  4. A claim recorded against real property by a party who supplied unpaid labor or materials Correct answer.

Explanation

A mechanics lien is a statutory claim against the improved real property, recorded by a contractor, subcontractor, or supplier who was not paid. It gives the claimant a security interest in the property that can be foreclosed if the debt remains unpaid.

Question 46Business Management and Contract Law

What is the purpose of a change order?

  1. To release the owner from any obligation to pay retainage
  2. To transfer the contract from one contractor to another
  3. To formally modify the scope, price, or schedule of an existing contract Correct answer.
  4. To record the project's completion with the county recorder

Explanation

A change order is a written modification, signed by the parties, that adjusts the contract scope, price, or time. It keeps the written agreement aligned with what is actually built and provides the basis for additional compensation.

Question 47Business Management and Contract Law

In Arizona, what is a qualifying party for a contractor's license?

  1. The insurance agent who writes the contractor's liability policy
  2. The surety company that issues the contractor's performance bonds
  3. The person who passed the exam and directs the licensee's work Correct answer.
  4. The owner of the property where the construction work is performed

Explanation

A qualifying party is the individual who passes the required trade or business exam and is responsible for the licensee's construction operations. The license depends on that person's continued association with the business.

Question 48Business Management and Contract Law

Which combination of elements is required to form a valid construction contract?

  1. Offer, acceptance, and consideration Correct answer.
  2. An offer, an arbitration clause, and retainage
  3. A bid bond, a license, and a notary
  4. An estimate, a deposit, and a permit

Explanation

A contract requires a definite offer, an unqualified acceptance of that offer, and consideration (bargained-for exchange). License status, bonds, and permits may be legally required for the work but are not elements of contract formation.

Question 49Business Management and Contract Law

A subcontractor with no direct contract with the property owner wants to preserve mechanics lien rights on a private Arizona project. What must the subcontractor generally do?

  1. Obtain the owner's written consent to the subcontract
  2. Serve a written preliminary 20-day notice on the owner and lender Correct answer.
  3. Record the lien within 20 days after starting work
  4. File a complaint with the Registrar of Contractors

Explanation

Under A.R.S. § 33-992.01, a party without a direct contract with the owner must give a preliminary 20-day notice to the owner and, if known, the construction lender to preserve lien rights. The notice is a prerequisite; it is not itself the lien.

Question 50Business Management and Contract Law

In Arizona, a mechanics lien generally must be recorded within how long after completion of the improvement?

  1. One year
  2. 120 days Correct answer.
  3. 60 days
  4. 180 days

Explanation

A.R.S. § 33-993 gives a claimant 120 days after completion of the improvement to record a mechanics lien. The period can be shortened to 60 days if the owner properly records and posts a notice of completion.