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MD MHIC Contractor practice questions

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Question 1Home improvement work scope and contract requirements

Under Maryland's home improvement law, a contractor must provide a written contract to a homeowner for a residential improvement job when the total cost of the work exceeds which threshold amount?

  1. $500 Correct answer.
  2. $5,000
  3. $100
  4. $1,000

Explanation

Maryland requires a written home improvement contract when the total price of the work exceeds $500. Below that threshold, a written agreement is not statutorily mandated, though it remains good practice. The rule applies to residential work performed for an owner-occupied home.

Question 2Home improvement work scope and contract requirements

Which element is required to appear in a Maryland home improvement contract exceeding $500?

  1. A statement of the approximate start and completion dates Correct answer.
  2. The contractor's social security number
  3. The homeowner's credit score
  4. A notarized signature from both parties

Explanation

Maryland's home improvement contract requirements include a description of the work and the approximate dates the work will begin and be completed. Notarization and credit information are not statutory contract elements. Personal identifiers like a social security number are not required content.

Question 3Home improvement work scope and contract requirements

A Maryland home improvement contractor wants to advertise a promotional price. Which practice complies with the law's contract and advertising rules?

  1. Using a price that is only available if the homeowner waives the right to cancel
  2. Stating the total price and describing what the price covers Correct answer.
  3. Quoting a low base price and adding mandatory fees only after the contract is signed
  4. Advertising a price that excludes required permits without disclosure

Explanation

Advertised prices must be truthful and disclose the total price and what it includes. Hiding mandatory charges or permit costs misleads consumers and violates the law. Conditioning a price on waiving cancellation rights is also improper.

Question 4Home improvement work scope and contract requirements

For a home improvement contract covered by Maryland law, the homeowner's right to cancel the transaction generally must be disclosed in writing. Within what period may the homeowner typically cancel?

  1. One business day
  2. Ten business days
  3. Thirty business days
  4. Three business days Correct answer.

Explanation

Maryland home improvement contracts must give the homeowner a three-business-day right to cancel, and the contract must contain a written notice of that right. The notice must be conspicuous and explain how to cancel. Shorter periods do not satisfy the requirement.

Question 5Home improvement work scope and contract requirements

A Maryland contractor signs a home improvement contract but later discovers the price quoted was too low. What is the contractor's obligation?

  1. Perform the work at the contracted price unless the homeowner agrees in writing to a change Correct answer.
  2. Abandon the job without liability because the price was a mistake
  3. Raise the price unilaterally to cover the shortfall
  4. Charge the higher price and disclose the change after completion

Explanation

A signed home improvement contract binds the contractor to the agreed price. Any change to price or scope requires a written change order signed by the homeowner. Unilateral price increases or walking off the job breach the agreement.

Question 6Home improvement work scope and contract requirements

Which party must hold a Maryland Home Improvement Commission license in order to contract for residential improvement work?

  1. The material supplier
  2. The subcontractor only
  3. The homeowner
  4. The general contractor selling the home improvement work Correct answer.

Explanation

The contractor who offers or performs home improvement work for compensation must hold a MHIC license. Subcontractors may also need licensure depending on the work, but the selling contractor certainly must be licensed. Homeowners and suppliers are not contractors under the law.

Question 7Home improvement work scope and contract requirements

A homeowner and contractor agree to a $12,000 kitchen renovation. Which document best satisfies Maryland's written contract requirement?

  1. A one-line invoice issued after work begins
  2. A written contract listing scope, price, dates, and cancellation notice Correct answer.
  3. A text message confirming the price only
  4. A verbal agreement witnessed by a neighbor

Explanation

For work over $500, the contract must be written and include the scope of work, total price, approximate dates, and the cancellation notice. A complete signed writing protects both parties and meets the statutory elements. Informal messages and post-work invoices do not.

Question 8Home improvement work scope and contract requirements

A Maryland contractor wants to use a deposit to purchase materials before starting a job. Which statement about deposits is accurate?

  1. Deposits must equal half the contract price
  2. Deposits may be any amount the contractor chooses
  3. Deposit terms should be stated in the contract and reasonable to the work Correct answer.
  4. Deposits are prohibited entirely

Explanation

Deposits are permitted but should be disclosed in the contract and proportionate to the work and materials needed. Excessive front-loaded deposits can raise consumer-protection concerns. There is no rule requiring deposits to equal half the price.

Question 9Home improvement work scope and contract requirements

A Maryland home improvement contract includes a clause stating the homeowner waives all claims against the contractor. How should this clause be treated?

  1. It automatically voids the entire contract
  2. It is fully enforceable as written
  3. It is likely unenforceable as an unfair waiver of consumer rights Correct answer.
  4. It is enforceable only if initialed

Explanation

Clauses that waive a homeowner's statutory rights, such as the right to cancel or to pursue valid claims, are generally unenforceable. The rest of the contract may still stand. A blanket waiver does not override consumer protection law.

Question 10Home improvement work scope and contract requirements

Which item should a Maryland home improvement contractor include in the contract as a prudent practice for documenting changes to the work?

  1. A clause allowing the contractor to substitute any materials without notice
  2. A provision that verbal changes are binding
  3. A statement that the homeowner cannot inspect the work
  4. A statement that all changes require a written change order signed by the homeowner Correct answer.

Explanation

Changes to scope, price, or materials should be documented through a written change order signed by the homeowner. This protects both parties and helps prevent disputes over verbal instructions. Maryland's mandatory contract-content rules do not require this specific change-order clause.

Question 11Home improvement work scope and contract requirements

A Maryland contractor provides a contract with a three-day cancellation notice but prints it in tiny gray text on the back page. What is the likely consequence?

  1. The notice may be ineffective because it is not conspicuous Correct answer.
  2. The notice is valid because it appears somewhere in the contract
  3. The contract is automatically void
  4. The homeowner loses cancellation rights

Explanation

The cancellation notice must be conspicuous so the homeowner can readily see and understand it. Fine, hidden print may render the notice ineffective. The remedy is generally to preserve the homeowner's cancellation rights, not to void the entire contract automatically.

Question 12Home improvement work scope and contract requirements

Which record should a Maryland home improvement contractor keep to demonstrate compliance with contract requirements?

  1. The signed contract, change orders, and cancellation notices Correct answer.
  2. Only the final payment receipt
  3. The homeowner's utility bills
  4. A verbal summary of the project

Explanation

Keeping the signed contract, any change orders, and proof of the cancellation notice helps demonstrate compliance. These records are also useful if a complaint is filed with the MHIC. Final receipts alone do not show the agreed terms.

Question 13Home improvement work scope and contract requirements

A Maryland contractor signs a contract to remodel a bathroom but the homeowner later requests additional tile work. What is the correct procedure?

  1. Prepare a written change order describing the added work and price Correct answer.
  2. Perform the extra work and bill it without documentation
  3. Refuse all changes after signing
  4. Cancel the original contract and start over

Explanation

Additional work should be authorized through a written change order that describes the added scope and price and is signed by the homeowner. This keeps the contract accurate and avoids billing disputes. Undocumented extras are hard to enforce.

Question 14Home improvement work scope and contract requirements

Which statement about a Maryland home improvement contractor's license number in advertising is correct?

  1. It is only needed on the contract
  2. It must be included in advertising as required by MHIC rules Correct answer.
  3. It may be omitted from all advertising
  4. It may be replaced with a fake number

Explanation

Maryland requires licensed contractors to include their MHIC license number in advertising. This lets consumers verify licensure. Omitting or falsifying the number violates the rules.

Question 15Home improvement work scope and contract requirements

A homeowner signs a home improvement contract at a home show after heavy pressure from a salesperson. Which protection is most relevant?

  1. The right to demand free upgrades
  2. The right to avoid paying any deposit
  3. The right to resell the contract
  4. The three-day right to cancel the contract Correct answer.

Explanation

High-pressure sales tactics are precisely why the three-business-day cancellation right exists. The homeowner may cancel within that period by following the notice instructions. There is no right to free upgrades or to avoid a properly disclosed deposit.

Question 16Home improvement work scope and contract requirements

Which of the following best describes the scope of work that must be stated in a Maryland home improvement contract?

  1. A specific description of the work, materials, and price Correct answer.
  2. Only the total price
  3. Only the completion date
  4. A general promise to 'improve the home'

Explanation

The contract must describe the work to be done and the materials to be used, along with the price and dates. Vague promises do not give the homeowner enforceable terms. Price or date alone is insufficient.

Question 17Home improvement work scope and contract requirements

A Maryland contractor wants to subcontract part of a home improvement job. What is the contractor's responsibility regarding the subcontractor?

  1. The homeowner must supervise the subcontractor
  2. The subcontractor must sign a separate contract with the homeowner
  3. The contractor bears no responsibility for subcontractor work
  4. The contractor remains responsible for the work performed under the contract Correct answer.

Explanation

The licensed contractor who contracted with the homeowner remains responsible for the work, including that performed by subcontractors. The homeowner deals with the contractor, not the subcontractor. Shifting responsibility to the homeowner is improper.

Question 18Home improvement work scope and contract requirements

Which action by a Maryland home improvement contractor would most likely support a finding of an unfair or deceptive trade practice?

  1. Misrepresenting that a license is not required for the work Correct answer.
  2. Providing a written contract with clear terms
  3. Explaining the cancellation notice
  4. Giving the homeowner a copy of the signed contract

Explanation

Misrepresenting licensing requirements to induce a homeowner to sign is deceptive. Contractors must be truthful about licensure and legal requirements. Providing clear contracts and explaining cancellation rights are compliant practices.

Question 19Home improvement work scope and contract requirements

A Maryland homeowner asks for a copy of the signed home improvement contract. What must the contractor do?

  1. Refuse until final payment
  2. Charge a copying fee of any amount
  3. Provide it only if the homeowner sues
  4. Provide a copy to the homeowner Correct answer.

Explanation

The homeowner is entitled to a copy of the signed contract. Withholding it until payment or charging arbitrary fees is improper. Providing the copy promptly supports transparency and compliance.

Question 20Home improvement work scope and contract requirements

Which provision in a Maryland home improvement contract would most likely be considered unenforceable?

  1. A clause requiring the homeowner to arbitrate all disputes in a distant forum with no notice Correct answer.
  2. A clause listing materials to be used
  3. A clause requiring written change orders
  4. A clause stating approximate start and completion dates

Explanation

Clauses that unfairly force homeowners into a distant forum without notice can be unconscionable and unenforceable. Standard terms like change-order procedures, dates, and material lists are proper. Consumer protection law scrutinizes terms that impair the homeowner's ability to seek relief.

Question 21Home improvement work scope and contract requirements

A Maryland contractor begins work before the homeowner signs the contract. What is the primary risk?

  1. The work becomes free of charge
  2. The contractor gains extra legal protections
  3. The contractor may lose the ability to enforce contract terms that were never agreed in writing Correct answer.
  4. The homeowner automatically owes double the price

Explanation

Starting work before a written contract is signed undermines the contractor's ability to enforce agreed terms and may violate the written-contract requirement for jobs over $500. It also creates disputes about scope and price. The contractor should secure the signed agreement first.

Question 22Home improvement work scope and contract requirements

Which statement accurately reflects the relationship between the MHIC and home improvement contract disputes in Maryland?

  1. The MHIC sets the price of all home improvement work
  2. The MHIC can receive and investigate complaints about licensed contractors Correct answer.
  3. The MHIC drafts each contract for the parties
  4. The MHIC guarantees completion of every job

Explanation

The MHIC handles complaints against licensed home improvement contractors and can investigate alleged violations. It does not set prices, draft individual contracts, or guarantee performance. Homeowners may also pursue civil remedies.

Question 23Home improvement work scope and contract requirements

A Maryland contractor's contract states that the homeowner must pay a 50% deposit, 40% at midpoint, and 10% at completion. Which concern is most relevant under consumer protection principles?

  1. The schedule is automatically illegal
  2. Front-loaded payments may leave the homeowner exposed if the contractor fails to perform Correct answer.
  3. The schedule voids the cancellation right
  4. The homeowner must pay everything upfront

Explanation

Payment schedules that front-load most of the price before work is performed increase homeowner risk if the contractor defaults. While not automatically illegal, such terms can raise concerns and should be balanced against progress. The cancellation right is unaffected by the schedule.

Question 24Home improvement work scope and contract requirements

Which practice best helps a Maryland contractor avoid disputes about what was promised during a sales presentation?

  1. Relying on the salesperson's verbal assurances
  2. Recording all promised scope and materials in the written contract Correct answer.
  3. Removing the scope description to keep the contract short
  4. Telling the homeowner the contract is just a formality

Explanation

Including all promised scope, materials, and terms in the written contract prevents later disagreements about verbal assurances. Verbal promises are hard to prove and may not be enforceable. A complete written record is the best protection.

Question 25Home improvement work scope and contract requirements

A homeowner cancels a Maryland home improvement contract within the three-day period. What is the contractor generally required to do regarding any deposit paid?

  1. Apply the deposit to future unrelated work
  2. Refund the deposit in accordance with the cancellation notice and law Correct answer.
  3. Require the homeowner to find a replacement customer
  4. Keep the entire deposit as a penalty

Explanation

When a homeowner validly cancels within the cancellation period, the contractor must refund amounts paid according to the notice and applicable law. Retaining the deposit as a penalty is improper. The homeowner need not find a replacement customer.

Question 26Home improvement work scope and contract requirements

Under Maryland home improvement law, which element must appear in the written contract before work begins?

  1. The name of the contractor's insurance broker
  2. The contractor's personal home address
  3. The homeowner's mortgage account number
  4. The contractor's MHIC license number Correct answer.

Explanation

Maryland requires home improvement contracts to be in writing and to include the contractor's MHIC license number, along with scope, price, and payment terms. The license number lets the homeowner verify licensure with the Commission. Other personal financial details are not required contract elements.

Question 27Home improvement work scope and contract requirements

A Maryland contractor's written agreement lists the total price but leaves the start and completion dates blank. How does this affect compliance with MHIC contract requirements?

  1. It is deficient only if the job exceeds $500
  2. It is acceptable if the homeowner initials the blank spaces
  3. It is acceptable because dates can be agreed verbally later
  4. It is deficient because the contract must state the agreed start and completion dates Correct answer.

Explanation

Maryland regulations require the home improvement contract to state the date work will begin and the date it will be completed. Leaving those terms blank means the written agreement omits required content. Verbal side agreements do not cure a deficient written contract.

Question 28Home improvement work scope and contract requirements

A Maryland homeowner wants to know what law governs the form and content of a residential remodeling agreement. Which body of rules applies?

  1. Federal consumer lending regulations
  2. The Maryland Home Improvement Law and MHIC regulations Correct answer.
  3. County zoning ordinances
  4. The Maryland Real Estate Commission's listing rules

Explanation

The Maryland Home Improvement Law, administered by the MHIC, sets licensing and contract requirements for residential improvement work. Zoning, lending, and real estate listing rules address different subjects. A contractor must look to the Home Improvement Law for contract form and content.

Question 29Home improvement work scope and contract requirements

A Maryland contractor performs a small repair for a homeowner and provides only a handwritten receipt showing the amount paid. Which statement best describes the contract requirement?

  1. A written contract is required for home improvement work, so a bare receipt generally falls short Correct answer.
  2. Only jobs above $5,000 need any writing
  3. A receipt alone satisfies the written contract requirement for any size job
  4. The homeowner may waive the writing requirement in all cases

Explanation

Maryland requires home improvement contracts to be in writing and to contain specified terms such as scope, price, dates, and license number. A receipt showing only an amount does not contain those required elements. The writing requirement is not satisfied by a minimal payment record.

Question 30Home improvement work scope and contract requirements

Before signing, a Maryland homeowner asks the contractor to explain which tasks are included in the quoted price. What contract feature addresses this directly?

  1. The scope of work description Correct answer.
  2. The license number field
  3. The arbitration clause
  4. The cancellation notice

Explanation

The scope of work section describes the materials and labor the contractor will provide for the stated price. Clear scope language reduces later disputes about inclusions and exclusions. Arbitration, licensure, and cancellation provisions serve other purposes.

Question 31Home improvement work scope and contract requirements

A Maryland home improvement contract must give the homeowner a right to cancel. Within what period may the homeowner generally cancel?

  1. One business day after signing
  2. Ten calendar days after signing
  3. Thirty days after signing
  4. Three business days after signing Correct answer.

Explanation

Maryland home improvement contracts must include a notice of the homeowner's right to cancel within three business days of signing. The notice must be conspicuous and clearly written. Longer or shorter periods do not match the statutory cancellation right.

Question 32Home improvement work scope and contract requirements

A Maryland contractor advertises remodeling services in a newspaper. What must the advertisement include?

  1. The contractor's general liability policy number
  2. The contractor's Social Security number
  3. The names of three recent customers
  4. The contractor's MHIC license number Correct answer.

Explanation

Maryland requires home improvement advertisements to include the contractor's MHIC license number. This allows consumers to verify the license before hiring. Customer references and policy numbers are not required advertising content.

Question 33Home improvement work scope and contract requirements

A Maryland homeowner signs a home improvement contract in the home after a sales presentation. Which document must the contractor give the homeowner at signing?

  1. A copy of the contractor's tax return
  2. A list of the contractor's suppliers
  3. A blank change order form
  4. A copy of the signed contract and cancellation notice Correct answer.

Explanation

The homeowner must receive a copy of the signed contract and the required cancellation notice at the time of signing. This lets the homeowner review terms and exercise cancellation rights. Tax returns and supplier lists are not required.

Question 34Home improvement work scope and contract requirements

A Maryland contractor and homeowner agree on a price, but the homeowner later asks to add a deck. How should the contractor document the added work?

  1. Proceed on a handshake and bill at the end
  2. Prepare a written change order signed by both parties before performing the added work Correct answer.
  3. Wait until final payment to mention the extra charge
  4. Note the change only in the contractor's internal file

Explanation

Changes to the scope of a home improvement contract should be documented in a written change order signed by the homeowner before the added work is performed. This fixes the price and scope and avoids disputes. Informal or unilateral records do not protect either party.

Question 35Home improvement work scope and contract requirements

A Maryland contractor's contract states that the homeowner must pay for all materials in advance and that the contractor has no obligation to refund unused funds. Which statement best evaluates this term?

  1. It is enforceable if the contractor is licensed
  2. It is enforceable because the parties agreed to it
  3. It is likely unenforceable because it unfairly shifts risk and conflicts with consumer protections Correct answer.
  4. It is enforceable only if the homeowner initials it

Explanation

Contract terms that unfairly shift risk to the homeowner or waive consumer protections are subject to challenge under Maryland home improvement law. A blanket no-refund clause on advance payments is the kind of one-sided term that may be unenforceable. Licensure and initials do not make an unfair term valid.

Question 36Home improvement work scope and contract requirements

A Maryland contractor wants to start demolition before the contract is signed because the homeowner is eager. What is the best guidance?

  1. Start work and have the homeowner sign within a week
  2. Rely on a verbal agreement if a deposit is paid
  3. Begin work and let the homeowner sign at completion
  4. Obtain a signed written contract with required disclosures before starting work Correct answer.

Explanation

Maryland requires a signed written contract containing required terms and disclosures before home improvement work begins. Starting early exposes the contractor to enforcement action and makes payment collection harder. Verbal agreements and delayed signatures do not satisfy the requirement.

Question 37Home improvement work scope and contract requirements

A Maryland homeowner cancels a home improvement contract within the three-day period. What is the contractor generally required to do with any deposit paid?

  1. Keep the deposit as liquidated damages
  2. Apply the deposit to future work
  3. Donate the deposit to a trade association
  4. Refund the deposit within a reasonable time as required by law Correct answer.

Explanation

When a homeowner validly cancels within the three-day period, the contractor must return any payments made within the time required by law. The contractor cannot retain the deposit as a penalty. Applying or donating the funds would violate the cancellation right.

Question 38Home improvement work scope and contract requirements

A Maryland contractor's contract includes a clause requiring all disputes to be arbitrated and stating the homeowner gives up the right to file a complaint with the MHIC. Which statement best describes this clause?

  1. The waiver of the right to complain to the MHIC is likely unenforceable Correct answer.
  2. It is fully enforceable because arbitration is favored
  3. It is enforceable only if the contractor pays the arbitration fees
  4. It is enforceable if the homeowner is over 65

Explanation

A contract cannot strip a homeowner of the right to file a complaint with the MHIC, which administers the Home Improvement Law. Such a waiver conflicts with the regulatory scheme and is likely unenforceable. Arbitration provisions do not override the Commission's authority.

Question 39Home improvement work scope and contract requirements

A Maryland contractor gives a homeowner an estimate that lists materials but omits labor, then later bills for labor. Which practice best protects the contractor from a dispute?

  1. Rely on the estimate as the final price
  2. Add labor charges only on the final invoice
  3. Provide a written contract that clearly itemizes labor and materials Correct answer.
  4. Tell the homeowner verbally that labor is extra

Explanation

A written contract that clearly itemizes labor and materials sets expectations and avoids disputes about what the price covers. Estimates that omit major cost components invite disagreement. Verbal clarifications and surprise final invoices are poor practices.

Question 40Home improvement work scope and contract requirements

A Maryland contractor uses a subcontractor for electrical work on a home improvement job. Who is responsible to the homeowner for the subcontractor's work?

  1. The homeowner, who hired the subcontractor directly
  2. The electrical supplier
  3. The licensed contractor who contracted with the homeowner Correct answer.
  4. The subcontractor alone

Explanation

The contractor who contracts with the homeowner remains responsible for the work, including work performed by subcontractors. The homeowner looks to that contractor for performance and warranty. The homeowner did not separately hire the subcontractor in this scenario.

Question 41Home improvement work scope and contract requirements

A Maryland contractor wants to ensure that promised upgrades discussed during a sales visit are enforceable. What is the best practice?

  1. Include the upgrades in the written contract's scope of work Correct answer.
  2. List the upgrades only on the company website
  3. Mention the upgrades in a follow-up phone call
  4. Rely on the salesperson's notes

Explanation

Terms that are not in the written contract are difficult to enforce and often lead to disputes. Including promised upgrades in the scope of work makes them part of the agreement. Notes, calls, and website content do not reliably modify the contract.

Question 42Home improvement work scope and contract requirements

A Maryland contractor's contract states that the homeowner must pay a large deposit before any work begins and that the deposit is non-refundable even if the contractor never starts. Which statement best evaluates this term?

  1. It is likely unenforceable because it allows the contractor to retain funds without performing Correct answer.
  2. It is enforceable if the contractor is insured
  3. It is enforceable because deposits are customary
  4. It is enforceable only for jobs over $10,000

Explanation

A term allowing the contractor to keep a large advance payment while never performing the work unfairly shifts risk and is likely unenforceable. Maryland law protects homeowners against such one-sided deposit terms. Insurance or job size does not cure the problem.

Question 43Home improvement work scope and contract requirements

A Maryland contractor includes a clause in the contract stating that the homeowner must pay the contractor's attorney fees in any dispute, regardless of who prevails. Which statement best describes this clause?

  1. It is enforceable if the homeowner is a business entity
  2. It is enforceable because it is in writing
  3. It is likely unenforceable because it is one-sided and unfair Correct answer.
  4. It is enforceable if the contractor wins

Explanation

A clause that requires the homeowner to pay the contractor's attorney fees no matter the outcome is one-sided and likely unenforceable under consumer protection principles. Fairness, not mere inclusion in writing, determines enforceability. The outcome of the dispute does not save an unfair term.

Question 44Home improvement work scope and contract requirements

A Maryland contractor's contract omits the required cancellation notice. What is the most likely consequence?

  1. The contract automatically becomes void after one year
  2. The omission may extend the homeowner's cancellation rights and expose the contractor to enforcement action Correct answer.
  3. The contract is fully enforceable as written
  4. The contractor may cure the omission by verbal notice

Explanation

Failure to include the required cancellation notice can extend the homeowner's right to cancel and may lead to MHIC enforcement action. The omission is a compliance defect, not a harmless error. Verbal notice does not reliably cure a missing written notice.

Question 45Home improvement work scope and contract requirements

A Maryland contractor wants to be sure the contract's description of work is sufficient. Which approach best meets the requirement?

  1. Describe materials, quantities, and tasks in enough detail to identify the work Correct answer.
  2. Refer the homeowner to the contractor's website for details
  3. Describe the work orally and note 'as discussed' in the contract
  4. State only the total price and the word 'remodel'

Explanation

The scope of work should describe materials, quantities, and tasks with enough specificity that the parties know what is included. Vague labels, external references, and oral descriptions invite disputes. Specific written scope is the best practice.

Question 46Home improvement work scope and contract requirements

A Maryland contractor's written contract states that the homeowner waives the right to cancel after signing. How should this term be treated?

  1. It is enforceable because the homeowner signed voluntarily
  2. It is enforceable only if the homeowner is a repeat customer
  3. It is enforceable if the contractor explains it orally
  4. It is unenforceable because the cancellation right cannot be waived in advance Correct answer.

Explanation

The three-day cancellation right is a consumer protection that cannot be waived in advance by contract language. A clause purporting to waive it is unenforceable. Oral explanation or customer history does not change that result.

Question 47Home improvement work scope and contract requirements

A Maryland contractor's contract includes a clause allowing the contractor to change the price unilaterally after signing. Which statement best evaluates this term?

  1. It is enforceable because contractors face cost changes
  2. It is enforceable only if the increase is under 10%
  3. It is likely unenforceable because it deprives the homeowner of an agreed price Correct answer.
  4. It is enforceable if the contractor gives notice

Explanation

A term letting the contractor raise the price unilaterally undermines the agreed contract price and is likely unenforceable. Price changes should be handled through signed change orders. Notice alone does not make a unilateral price change fair.

Question 48Home improvement work scope and contract requirements

A Maryland contractor's contract requires the homeowner to submit all disputes to binding arbitration and waives the homeowner's right to recover under the Home Improvement Guaranty Fund. Which statement best describes this clause?

  1. The waiver of Guaranty Fund rights is likely unenforceable Correct answer.
  2. It is enforceable if the arbitrator is a licensed contractor
  3. It is enforceable because arbitration is a favored method of dispute resolution
  4. It is enforceable if the homeowner is represented by counsel

Explanation

The Home Improvement Guaranty Fund exists to protect homeowners who suffer loss from licensed contractors. A contract clause waiving the right to seek Fund recovery is likely unenforceable because it strips a statutory protection. Arbitration preference or representation by counsel does not validate the waiver.

Question 49Home improvement work scope and contract requirements

A Maryland contractor's contract states that the homeowner must accept the work as complete upon the contractor's oral statement, with no inspection opportunity. Which statement best evaluates this term?

  1. It is likely unenforceable because it denies the homeowner a reasonable opportunity to inspect Correct answer.
  2. It is enforceable because the contractor decides completion
  3. It is enforceable if the contractor is licensed
  4. It is enforceable if the homeowner pays in cash

Explanation

A term that denies the homeowner a reasonable chance to inspect the work before acceptance is one-sided and likely unenforceable. Homeowners should have an opportunity to identify defects before final payment. Licensure or payment method does not validate the term.

Question 50Home improvement work scope and contract requirements

A Maryland contractor's contract includes a clause stating that any dispute must be resolved in a court in another state and that Maryland law does not apply. Which statement best describes this clause?

  1. It is enforceable because parties may choose any forum
  2. It is likely unenforceable because it undermines Maryland consumer protections Correct answer.
  3. It is enforceable if the homeowner signs a separate waiver
  4. It is enforceable if the contractor has an out-of-state office

Explanation

A clause that moves disputes out of Maryland and displaces Maryland law undermines the protections of the Home Improvement Law. Such terms are likely unenforceable in consumer contracts. Having an out-of-state office or a separate waiver does not save them.