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MS General Contractor practice questions

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Question 1Business Organization and Management

A general contractor wants limited personal liability for business debts but prefers to avoid the double taxation that a C corporation can create. Which business form best fits that goal?

  1. Limited liability company Correct answer.
  2. General partnership
  3. Sole proprietorship
  4. C corporation

Explanation

An LLC gives its members limited liability and is generally taxed as a pass-through entity unless it elects corporate tax treatment. A sole proprietorship and a general partnership leave the owners personally exposed, while a C corporation is a separate taxpaying entity whose profits can be taxed again when distributed.

Question 2Business Organization and Management

Under Mississippi State Board of Contractors rules, a contractor generally must be licensed before performing commercial construction work valued at:

  1. $50,000 or more Correct answer.
  2. $5,000 or more
  3. $150,000 or more
  4. $500,000 or more

Explanation

Mississippi's commercial contractor licensing threshold is generally $50,000 or more for a construction contract. Bidding or performing work at or above that threshold without the appropriate Board license can expose the contractor to penalties and contract enforcement problems.

Question 3Business Organization and Management

On a Mississippi public construction project, a performance bond primarily protects the owner against which risk?

  1. A subcontractor remains unpaid for materials
  2. The design engineer makes an error
  3. A worker is injured on the site
  4. The contractor fails to perform the contract Correct answer.

Explanation

A performance bond gives the owner a surety-backed remedy if the contractor defaults and does not complete the work according to the contract. Payment bonds, workers' compensation insurance, and professional liability coverage address the other listed risks.

Question 4Business Organization and Management

Two contractors form a general partnership to pursue a building project. A subcontractor obtains a judgment against the partnership for unpaid work. Which statement correctly describes the partners' liability?

  1. Only the partner who signed the subcontract can be held liable
  2. The partnership's liability ends when the certificate of occupancy is issued
  3. Each partner can be personally liable for the entire judgment Correct answer.
  4. The partners are liable only up to the amount each contributed as capital

Explanation

General partners are jointly and severally liable for partnership obligations, so a creditor may collect the full judgment from any general partner. That partner then may seek contribution from the other partners, but the creditor is not limited to capital contributions or to the signer of the subcontract.

Question 5Business Organization and Management

A contractor is deciding whether to classify a site carpenter as an employee or an independent contractor. Which fact best supports independent-contractor status?

  1. The contractor supplies all materials and requires weekly staff meetings
  2. The carpenter is paid hourly and works only for this contractor
  3. The contractor sets the carpenter's daily start time and directs each task
  4. The carpenter uses his own tools and sets his own hours Correct answer.

Explanation

Independent-contractor status is supported by evidence that the worker controls the manner and means of the work, supplies tools, and operates an independent business. Close supervision, hourly pay, exclusive service, and mandatory staff meetings point toward employee status.

Question 6Business Organization and Management

In a construction payment schedule, retainage is best described as:

  1. A markup added to change orders for overhead and profit
  2. A percentage withheld from progress payments until the work is accepted Correct answer.
  3. A premium charged by a surety for a payment bond
  4. An advance paid to the contractor before mobilization

Explanation

Retainage is a portion of each progress payment held back by the owner to protect against incomplete work, liens, or defects. It is released according to the contract after acceptance, substantial completion, or other specified conditions.

Question 7Business Organization and Management

A contractor signs a lump-sum contract for a fixed price with no price-adjustment clause. During construction, structural steel prices rise sharply. Who generally bears the cost of that increase?

  1. The owner, because material price changes are always handled by change order
  2. The surety, because the bond guarantees the contract price
  3. The architect, because the design documents set the price
  4. The contractor, because the price is fixed absent a contract adjustment clause Correct answer.

Explanation

In a lump-sum contract, the contractor commits to a fixed price and normally bears the risk of cost increases unless the contract has an escalation, unit-price, or other adjustment provision. The owner pays extra only when the contract or a change order authorizes it.

Question 8Business Organization and Management

A newly formed Mississippi corporation applies for a contractor's license. What is the function of the corporation's qualifying party?

  1. A surety agent who issues the corporation's performance bond
  2. An outside accountant who certifies the corporate financial statements
  3. A corporate officer who personally guarantees all of the corporation's debts and obligations
  4. An individual who meets Board experience and exam requirements Correct answer.

Explanation

The qualifying party is the individual through whom a business entity demonstrates the experience and examination qualifications required for a Mississippi contractor license. The license is issued to the entity, but that individual is responsible for the entity's construction operations and must meet Board requirements.

Question 9Business Organization and Management

A general contractor carries a commercial general liability (CGL) policy. Which loss would most likely be covered under that policy?

  1. Medical costs for the contractor's employee injured by a nail gun
  2. The cost to replace the contractor's own defective workmanship
  3. A regulatory fine for a fall-protection violation
  4. Injury to a pedestrian struck by falling fascia from the work area Correct answer.

Explanation

A CGL policy responds to third-party bodily injury or property damage caused by the insured's operations, such as a pedestrian injured by falling material. Employee injuries are addressed by workers' compensation, defective work itself is generally excluded, and regulatory fines are typically uninsurable.

Question 10Business Organization and Management

A contractor's CPM schedule shows that the electrical rough-in is on the critical path. What does this mean for project management?

  1. The activity can be delayed without affecting the final completion date
  2. The activity carries the largest budget of any work item in the schedule
  3. A delay in the activity delays project completion Correct answer.
  4. The activity must be performed by a licensed electrician

Explanation

Critical-path activities have zero float, so a delay in one normally pushes the project completion date unless the schedule is revised or the work is accelerated. The critical path is determined by logic and duration, not by budget size or trade licensing.

Question 11Business Organization and Management

A general contractor submits a bid on a Mississippi public school project and includes a bid bond. What does the bid bond primarily guarantee to the owner?

  1. That the completed work will remain free of defects for one full year.
  2. That the owner will pay the full contract price when the work is finished.
  3. That the bidder will sign the contract and furnish required bonds if awarded. Correct answer.
  4. That subcontractors and suppliers will be paid for labor and materials.

Explanation

A bid bond is a surety instrument submitted with a bid. It guarantees that the successful bidder will execute the contract and provide the required performance and payment bonds; if not, the surety may be liable up to the bond amount.

Question 12Business Organization and Management

A contractor's balance sheet lists current assets of $240,000 and current liabilities of $180,000. What is the contractor's working capital?

  1. $240,000
  2. $180,000
  3. $420,000
  4. $60,000 Correct answer.

Explanation

Working capital equals current assets minus current liabilities. $240,000 minus $180,000 is $60,000. It indicates the short-term funds available for operations.

Question 13Business Organization and Management

An owner wants one entity accountable for both design and construction on a new Mississippi office building. Which project delivery method best provides that single point of responsibility?

  1. Design-bid-build
  2. Design-build Correct answer.
  3. Multiple prime contracts
  4. Construction management agency

Explanation

In design-build, a single entity contracts with the owner for both design and construction. That creates one point of responsibility and can reduce coordination disputes between designer and builder.

Question 14Business Organization and Management

A project owner orally directs a general contractor to add a canopy not shown in the plans. The contractor wants to ensure payment for the extra work. What is the contractor's best management action?

  1. Perform the work immediately and rely on the owner's oral promise.
  2. Deduct the cost from the next pay application without notice.
  3. Stop all work until the owner issues a new set of drawings.
  4. Obtain a written change order signed by the owner before proceeding. Correct answer.

Explanation

Extra work should be documented by a written change order signed by the owner or authorized representative. The writing should define scope, price, and time impact so the contractor can prove entitlement to payment.

Question 15Business Organization and Management

A carpenter employed by a Mississippi general contractor is injured on the job. What is the primary effect of the contractor's workers' compensation coverage?

  1. It eliminates the employer's duty to provide medical care and shifts all costs to the employee.
  2. It applies only to injuries that happen away from the construction jobsite and not on site.
  3. It transfers the entire loss to the employee's personal health insurance policy and bars any claim.
  4. It provides statutory benefits and generally limits the employee's suit against the employer. Correct answer.

Explanation

Workers' compensation provides statutory medical and wage-replacement benefits for work-related injuries. In return, the employer generally receives immunity from a tort suit by the employee, subject to state-law exceptions.

Question 16Business Organization and Management

A general contractor's subcontract includes a clause stating that the subcontractor must assume toward the contractor all obligations and responsibilities that the contractor assumes toward the owner under the prime contract. What is this clause called and what does it do?

  1. A flow-down clause; it applies prime-contract terms to the subcontract. Correct answer.
  2. A severability clause; it voids the entire subcontract if one term fails.
  3. A retainage clause; it withholds a percentage of each payment.
  4. A liquidated-damages clause; it fixes the amount owed for delay.

Explanation

A flow-down clause incorporates the prime contract's obligations into the subcontract. It makes the subcontractor responsible for applicable terms such as schedule, quality, indemnity, and insurance.

Question 17Business Organization and Management

A contractor agrees to a cost-plus-fee contract with a guaranteed maximum price (GMP). Actual costs exceed the GMP because of the contractor's own inefficiency, with no owner-directed changes. Who generally bears the overrun?

  1. The architect, because design decisions caused the costs.
  2. The owner, because cost-plus contracts pass all costs through.
  3. The surety, because a performance bond covers cost overruns.
  4. The contractor, because the GMP caps the owner's price. Correct answer.

Explanation

A GMP places a ceiling on the owner's cost, so cost overruns from the contractor's own performance generally fall on the contractor. The owner may pay more only for owner-directed changes or other contract adjustments.

Question 18Business Organization and Management

A dispute arises over a concrete pour on a Mississippi commercial project. The parties want a neutral third party to help them negotiate a settlement, but they want to keep the power to decide whether to accept it. Which process fits?

  1. Recordation
  2. Litigation
  3. Mediation Correct answer.
  4. Binding arbitration

Explanation

Mediation uses a neutral facilitator to help the parties reach a voluntary settlement. The mediator does not impose a decision, so the parties retain authority to accept or reject any resolution.

Question 19Business Organization and Management

A performance bond covers a general contractor's default on a Mississippi public project. If the surety determines the contractor is in default, which action is the surety generally entitled to take?

  1. Complete the contract or pay the owner up to the bond penalty. Correct answer.
  2. Sue the owner to recover the original contract price plus delay damages.
  3. Convert the performance bond into a payment bond automatically by operation of law.
  4. Avoid all responsibility because the contractor was the bonded party.

Explanation

When a performance bond is triggered by contractor default, the surety may complete the contract, arrange for a replacement contractor, or pay the owner damages up to the bond amount. The surety's liability is limited by the bond penalty.

Question 20Business Organization and Management

An owner terminates a construction contract for convenience. The contractor has performed work, incurred mobilization costs, and has not breached. What is the contractor generally entitled to recover?

  1. Payment for work performed and demobilization costs, but not unperformed-work profit. Correct answer.
  2. Nothing, because termination ends all payment obligations under the contract.
  3. The full contract price immediately, without regard to the work already performed.
  4. All lost profits on the unperformed work plus punitive damages for breach.

Explanation

Termination for convenience allows the owner to stop the work without the contractor being in default. The contractor generally recovers the value of work performed and reasonable closeout or demobilization costs, but not anticipated profit on work it never performed.

Question 21Business Organization and Management

A Mississippi general contractor operates the business as a sole proprietorship. If a construction defect judgment exceeds the business's assets, how are the owner's personal assets treated?

  1. They are protected up to the amount of the contractor's license bond.
  2. They are protected only if the owner files a certificate of assumed name.
  3. They are fully protected because the business is recognized as a separate legal entity.
  4. They are reachable because a sole proprietor has unlimited personal liability. Correct answer.

Explanation

A sole proprietorship is not a separate legal entity, so the owner and the business are the same person in law and business creditors can reach personal assets. Filing a trade name or holding a license bond does not create a liability shield.

Question 22Business Organization and Management

On a Mississippi public construction project, what risk does a payment bond primarily protect against?

  1. The owner's default in paying the general contractor after the work is accepted
  2. Property damage caused by the contractor's site operations
  3. Defective design by the project architect or engineer
  4. Nonpayment of subcontractors and suppliers furnishing labor or materials Correct answer.

Explanation

A payment bond gives subcontractors and suppliers a surety-backed source of payment when the general contractor or a higher-tier subcontractor fails to pay them. It is separate from a performance bond, which protects the owner against contractor default.

Question 23Business Organization and Management

A contractor wants to bid on a Mississippi public works project valued above the statutory threshold. Which credential must the contractor hold before submitting the bid?

  1. A minority business enterprise certification from the state
  2. A certificate of responsibility from the State Board of Contractors Correct answer.
  3. A performance bond equal to the full contract amount, furnished after award
  4. A certificate of occupancy issued by the local building official

Explanation

Mississippi requires a Certificate of Responsibility for contractors bidding on public works projects above the statutory threshold, in addition to holding a contractor's license. Bonds are furnished after award, and occupancy permits come at project completion.

Question 24Business Organization and Management

An owner hires a construction manager at risk (CMAR) for a new Mississippi hospital. Which characteristic distinguishes CMAR from traditional design-bid-build?

  1. The CMAR acts only as the owner's agent and carries no construction risk.
  2. The CMAR holds trade subcontracts and commits to a guaranteed maximum price. Correct answer.
  3. The CMAR prepares the design and constructs the project under a single contract.
  4. The CMAR is selected only on the lowest bid and holds no trade contracts.

Explanation

Under CMAR, the construction manager participates in design, holds the trade contracts, and provides a guaranteed maximum price, taking on cost risk above that cap. Design-build is the delivery method in which one entity both designs and constructs.

Question 25Business Organization and Management

A contractor's balance sheet shows current assets of $600,000, current liabilities of $400,000, and inventory of $100,000. What is the current ratio?

  1. 0.67
  2. 2.00
  3. 1.25
  4. 1.50 Correct answer.

Explanation

Current ratio equals current assets divided by current liabilities, so $600,000 divided by $400,000 equals 1.50. Inventory is subtracted only when computing the quick ratio, not the current ratio.

Question 26Business Organization and Management

A Mississippi general contractor hires a subcontractor that carries no workers' compensation insurance. An employee of the subcontractor is injured on the site. What is the general contractor's primary exposure?

  1. The general contractor automatically owes punitive damages for the subcontractor's violation.
  2. The general contractor may be a statutory employer owing workers' compensation benefits. Correct answer.
  3. No exposure, because the injured worker is employed by an independent business.
  4. The general contractor's commercial general liability policy becomes the workers' compensation carrier.

Explanation

Mississippi workers' compensation law can make a higher-tier contractor a statutory employer when a lower-tier contractor fails to secure coverage, exposing the general contractor to benefit liability. CGL policies exclude workers' compensation obligations.

Question 27Business Organization and Management

A subcontract contains a clause stating that the subcontractor will be paid only if and when the owner pays the general contractor. How is a clear pay-if-paid clause generally treated?

  1. It has no effect unless the owner signs the subcontract.
  2. It is void in every state as against public policy.
  3. It automatically converts the owner into the subcontractor's direct obligor.
  4. It can be a condition precedent to payment if the language clearly shifts the risk. Correct answer.

Explanation

A pay-if-paid clause, when clearly worded, can make owner payment a condition precedent to the general contractor's duty to pay the subcontractor, shifting credit risk. Courts distinguish it from a pay-when-paid clause, which generally addresses timing rather than extinguishing the obligation.

Question 28Business Organization and Management

A CPM schedule shows a concrete pour with total float of five days. What does this mean?

  1. The pour's duration may be shortened by five days without cost impact.
  2. The pour may slip up to five days without delaying project completion. Correct answer.
  3. The pour is on the critical path and cannot be delayed.
  4. The pour has five days of free float but no total float.

Explanation

Total float is the amount of time an activity can slip without extending the project finish date. An activity with five days of total float is not critical; free float is a narrower measure of delay that avoids affecting the next activity.

Question 29Business Organization and Management

A construction contract fixes liquidated damages at $5,000 per day for late completion. A court will enforce the clause only if the amount is:

  1. Below 10 percent of the total contract price
  2. Equal to the owner's actual documented loss after the delay occurs
  3. A reasonable forecast of loss that is difficult to estimate accurately Correct answer.
  4. Approved in writing by the contractor's surety before construction begins

Explanation

Liquidated damages are enforceable when they are a reasonable pre-estimate of anticipated loss and actual damages would be difficult to calculate, not a penalty. They are not measured after the fact by actual loss, nor capped by a fixed percentage of contract price.

Question 30Business Organization and Management

A general contractor buys the assets of another construction company but not its stock. In which situation is the buyer most likely to be liable for the seller's unpaid construction debts?

  1. The buyer pays fair market value for the assets in a good-faith, arm's-length sale.
  2. The seller continues to operate a separate business after the sale.
  3. The buyer keeps the seller's trade name but not its contracts.
  4. The buyer expressly assumes the seller's liabilities in the purchase agreement. Correct answer.

Explanation

An asset buyer generally avoids the seller's liabilities unless one of the traditional exceptions applies, such as an express assumption, a de facto merger, or fraud. An express assumption in the purchase agreement is the clearest path to successor liability.

Question 31Business Organization and Management

Two Mississippi general contractors form a joint venture to bid a large school project. What is the primary purpose of structuring the work as a joint venture?

  1. To permanently combine the firms into a single corporation
  2. To share resources and risk on one project Correct answer.
  3. To shift all defect liability to the project owner
  4. To avoid licensing requirements on public projects

Explanation

A joint venture is a temporary alliance formed to pursue one project or a defined series of projects. The participants typically remain separate legal entities while sharing capital, personnel, equipment, bonding capacity, and project risk. It is not a merger, and it does not eliminate licensing, safety, or contractual liability.

Question 32Business Organization and Management

A surety issues performance and payment bonds for a Mississippi general contractor. Under the general indemnity agreement the contractor signed, what is the contractor's obligation if the surety pays a bonded claim?

  1. The contractor is released from liability because the bond transfers the risk to the surety.
  2. The contractor must pay only the annual bond premium and nothing more.
  3. The contractor must reimburse the surety for losses paid and provide indemnity under the agreement. Correct answer.
  4. The project owner must reimburse the surety for all claim payments.

Explanation

A surety bond is a credit instrument, not a substitute for the contractor's liability. The general indemnity agreement obligates the contractor, and usually its owners, to reimburse the surety for claim payments, legal costs, and related expenses and to post collateral when required. The surety may enforce that indemnity after satisfying the bonded claim.

Question 33Business Organization and Management

A Mississippi general contractor pays a framing crew by the piece, supplies all tools and materials, and sets the crew's daily start times and work sequence. Which fact most strongly supports classifying the crew as employees rather than independent contractors?

  1. The crew signed a written agreement labeling itself as independent.
  2. The contractor controls the tools, schedule, and manner of the work. Correct answer.
  3. The crew is paid on a piece-rate basis rather than hourly.
  4. The crew performs work outside the general contractor's specialty.

Explanation

Worker classification turns chiefly on the right to control the details of the work. Supplying tools and materials and dictating start times and work sequence are strong evidence of behavioral and financial control, which points to employee status. A written independent-contractor label or piece-rate pay is not controlling when the actual relationship shows close direction.

Question 34Business Organization and Management

A contractor uses percentage-of-completion accounting on a $2,000,000 contract with estimated total costs of $1,600,000. Costs incurred to date are $400,000. What amount of revenue should the contractor recognize to date?

  1. $500,000 Correct answer.
  2. $1,600,000
  3. $400,000
  4. $1,000,000

Explanation

Under percentage-of-completion, revenue recognized equals costs incurred divided by total estimated costs, multiplied by the contract price. Costs incurred are $400,000 against $1,600,000 estimated total cost, or 25 percent complete. Applying 25 percent to the $2,000,000 contract price yields $500,000 of revenue to date.

Question 35Contract Administration, Licensing Law, and Lien Law

Which Mississippi agency issues general contractor licenses and administers the contractor licensing examination?

  1. Mississippi Board of Architecture
  2. Mississippi Department of Revenue
  3. Mississippi Secretary of State
  4. Mississippi State Board of Contractors Correct answer.

Explanation

The Mississippi State Board of Contractors regulates commercial general contractors, issues licenses, and administers the licensing examination. The other agencies handle tax collection, business filings, or design-professional regulation rather than general contractor licensing.

Question 36Contract Administration, Licensing Law, and Lien Law

Under Mississippi law, a general contractor license is generally required before contracting for commercial construction work that exceeds which contract amount?

  1. $25,000
  2. $100,000
  3. $10,000
  4. $50,000 Correct answer.

Explanation

Mississippi’s Contractors Licensing Act sets the commercial-construction licensing threshold at $50,000. Work at or below that amount generally does not require a state general contractor license, although other local or specialty requirements may apply.

Question 37Contract Administration, Licensing Law, and Lien Law

After last furnishing labor or materials on a Mississippi project, within what period must a mechanics lien claim generally be filed with the chancery clerk?

  1. one year
  2. 30 days
  3. six months
  4. 90 days Correct answer.

Explanation

Mississippi mechanics lien statutes generally require the claim of lien to be filed within 90 days after the last item of labor or material is furnished. Filing after that period can forfeit the lien rights even if the debt remains unpaid.

Question 38Contract Administration, Licensing Law, and Lien Law

An unlicensed contractor completes a $120,000 commercial renovation and the owner refuses to pay. The contractor sues for the contract balance. What is the likely result under Mississippi licensing law?

  1. The contractor may enforce the contract if the owner knew it was unlicensed.
  2. The contractor cannot maintain the action because it was unlicensed. Correct answer.
  3. The contractor may recover in quantum meruit without proving a license.
  4. The contractor may recover the full balance because the owner accepted the work.

Explanation

Mississippi law bars an unlicensed contractor from bringing or maintaining an action to collect compensation for work that required a license. Acceptance of the work or the owner’s knowledge generally does not cure the statutory licensing defect.

Question 39Contract Administration, Licensing Law, and Lien Law

A licensed Mississippi contractor’s qualifying party resigns. The contractor wants to keep bidding commercial work. What must the contractor do?

  1. Designate a replacement qualifying party and notify the Board. Correct answer.
  2. Ask the project owner to waive the qualifying-party requirement.
  3. Transfer the license to another individual who passed the exam.
  4. Continue operating until the license’s next annual renewal.

Explanation

A contractor license depends on a qualifying party who meets the Board’s examination and experience requirements. If that person leaves, the contractor must designate a replacement and notify the Board to keep the license in good standing.

Question 40Contract Administration, Licensing Law, and Lien Law

A project owner orally directs a contractor to perform extra work not described in the contract. The contract requires written change orders signed by the owner. What should the contractor do before performing the extra work?

  1. Obtain a signed written change order stating scope and price. Correct answer.
  2. Rely on the oral directive because the owner has apparent authority.
  3. Perform the work and later file a lien for the extra amount.
  4. Stop all work until the owner issues a new contract.

Explanation

A written change order protects both parties by documenting scope, price, and time impact. Relying on an oral directive creates proof and payment risk when the contract expressly requires written authorization.

Question 41Contract Administration, Licensing Law, and Lien Law

The architect issues a certificate of substantial completion for a commercial project. What is the typical contract administration effect?

  1. The owner may occupy the work, but the contractor must finish punch-list items. Correct answer.
  2. Final payment becomes immediately due without any conditions.
  3. The contractor is relieved of all obligations to complete punch-list items.
  4. All warranties and guarantee periods are canceled.

Explanation

Substantial completion means the work is sufficiently complete for its intended use, allowing the owner to occupy it. The contractor remains obligated to complete punch-list work, and warranty periods typically begin at substantial completion.

Question 42Contract Administration, Licensing Law, and Lien Law

A subcontractor signs an unconditional lien waiver in exchange for a progress payment. What is the effect of that waiver?

  1. It waives only the subcontractor’s right to file a lawsuit on the contract.
  2. It waives all lien rights for the entire project, including future work.
  3. It has no effect unless the owner also signs it.
  4. It waives lien rights for covered work through the waiver date, up to the payment amount. Correct answer.

Explanation

An unconditional waiver generally extinguishes lien rights for the work covered by the payment, not for later-furnished labor or materials. The waiver’s scope depends on its language and the payment actually received.

Question 43Contract Administration, Licensing Law, and Lien Law

An unlicensed contractor furnishes labor and materials on a $150,000 commercial project and later files a mechanics lien for unpaid work. What is the most likely outcome?

  1. The lien is enforceable because mechanics liens are independent of licensing.
  2. The lien is enforceable only against the owner’s personal residence.
  3. The lien is enforceable if the contractor files within 90 days.
  4. The lien is unenforceable because the unlicensed contractor cannot sue for compensation. Correct answer.

Explanation

If Mississippi licensing law bars the contractor from maintaining an action for compensation, the contractor also cannot use the mechanics lien statute to collect that compensation. Filing within 90 days does not cure the absence of a required license.

Question 44Contract Administration, Licensing Law, and Lien Law

A material supplier contracts with a subcontractor, not the owner, on a Mississippi project. The owner posted and recorded a Notice of Non-Liability before the supplier’s first delivery, and the supplier never gave written notice to the owner. What is the likely result?

  1. The supplier has a lien limited to the amount owed to the subcontractor.
  2. The supplier has a lien because the general contractor is licensed.
  3. The supplier has a lien because material suppliers are exempt from notice requirements.
  4. The supplier has no enforceable lien against the owner’s property. Correct answer.

Explanation

When an owner properly posts and records a Notice of Non-Liability, a supplier not in privity with the owner must give the required statutory notice to preserve lien rights. Failing to do so generally defeats the supplier’s lien claim against the property.

Question 45Contract Administration, Licensing Law, and Lien Law

Before submitting a bid on a Mississippi public construction project, a contractor must obtain which document from the Mississippi State Board of Contractors?

  1. Certificate of Responsibility Correct answer.
  2. General business license
  3. Sales tax permit
  4. Performance bond

Explanation

Mississippi requires a contractor to hold a current Certificate of Responsibility issued by the State Board of Contractors before bidding or contracting on public work. The certificate evidences licensure and an approved classification and limit; a bond or tax permit does not satisfy that requirement.

Question 46Contract Administration, Licensing Law, and Lien Law

A contractor decides to claim a mechanics lien against a Mississippi commercial property. In which office must the lien claim generally be recorded?

  1. Mississippi Secretary of State's business records office
  2. Circuit clerk of the county where the contractor performed the work
  3. Mississippi State Board of Contractors in Jackson
  4. Chancery clerk of the county where the property is located Correct answer.

Explanation

Mississippi mechanics lien claims are recorded in the office of the chancery clerk of the county in which the improved property is located. Recording in the wrong office can defeat the lien even if the debt is valid.

Question 47Contract Administration, Licensing Law, and Lien Law

During construction, a contractor finds that the structural drawings and architectural drawings show conflicting beam sizes. What is the most appropriate contract administration action?

  1. Submit a written RFI to the architect before installing the beam Correct answer.
  2. Install according to the architectural drawing because it was issued later
  3. Stop all work on the project until the owner calls a meeting
  4. Install the larger beam and submit a change order afterward

Explanation

A request for information documents the conflict and obtains a written design clarification before work proceeds. Proceeding unilaterally can make the contractor bear the cost of removing or correcting nonconforming work.

Question 48Contract Administration, Licensing Law, and Lien Law

A Tennessee contractor holds a valid Tennessee contractor license and wants to perform a $300,000 commercial project in Mississippi. What must the contractor do?

  1. Rely on the Tennessee license because the states have full reciprocity
  2. Obtain a Mississippi license from the State Board of Contractors first Correct answer.
  3. Register only with the Mississippi Secretary of State
  4. Use a Mississippi-licensed subcontractor to sign the contract

Explanation

Mississippi generally does not allow a contractor to rely on an out-of-state license for work requiring a Mississippi contractor license. The contractor must be licensed by the Mississippi State Board of Contractors before entering the contract.

Question 49Contract Administration, Licensing Law, and Lien Law

A general contractor is preparing a Mississippi mechanics lien claim for unpaid work. Which content is generally required for the claim?

  1. A copy of the contractor's current Certificate of Responsibility and pocket license
  2. The owner's recorded warranty deed
  3. An itemized statement of the amount due and a property description Correct answer.
  4. The architect's certificate of substantial completion

Explanation

A mechanics lien claim must identify the improved property and state the amount due, usually with an itemized account of labor and materials. It is a claim against the property, not a copy of licensing or title documents.

Question 50Contract Administration, Licensing Law, and Lien Law

A construction contract makes written notice a condition precedent to a time extension for weather delays. The contractor misses the notice deadline and later finishes late. What is the likely consequence?

  1. The owner must grant the extension because weather is outside the contractor's control
  2. The contractor is excused from the notice requirement because the delay was short
  3. The contractor may lose the time extension for those delay days Correct answer.
  4. The architect must automatically waive the notice requirement

Explanation

When the contract makes written notice a condition precedent, a contractor that fails to give timely notice may waive or forfeit the time extension. The notice requirement lets the owner respond to and document delay events while they occur.