California Contractor Law and Business Exam Prep Checklist
Everything for the California Contractor Law and Business exam in one place: the bulletin's key facts, the topics and each one's share of the exam, the reference books, sample questions with answers, and a prep checklist. PSI gives the exam.
California Contractor Law and Business Exam Facts
From the official bulletin:
| Questions | Not published by the board |
| Time limit | 210 minutes |
| Passing score | Not published by the board |
| Books in the exam room | Closed book (no books in the room) |
| Exam fee | $51.43 |
On exam day
- The examination is multiple choice with four choices per question and only one BEST answer, with no penalty for guessing.
- One valid, non-expired government-issued photo ID from the listed types is required before you may test, and the name must match your application.
- You must arrive at the examination site at least 30 minutes before your scheduled appointment time.
- A calculator is provided for the examination, and candidates may not bring their own.
- Numerous personal items, including calculators, textbooks, notes, personal pens or pencils and watches, are prohibited in the testing room, while timing mechanisms are available in the room and on screen.
Scheduling, changes and retakes
- You schedule the examination through PSI either online at https://test-takers.psiexams.com/cacon or by telephone at (877) 392-6422.
- Board approval is required before scheduling, and examination eligibility lasts 18 months from the date the Board deems you eligible.
- Cancelling or rescheduling at least two days before the examination date preserves your fee, but notice must be given through the PSI website or by speaking to a PSI representative.
- Missing the appointment, arriving after the examination start time, or failing to present proper identification causes forfeiture of the examination fee.
- You receive a printed score report at the check-in location immediately after the examination, and scores are not given over the telephone.
- You must wait 21 calendar days after each attempt before testing again, and you may test as many times as needed within the 18-month eligibility period.
- Passing candidates receive further instructions by mail from CSLB, because the score report is not a license.
Source: Contractors State License Board Licensing Examination Information Guide — Law and Business. Check the bulletin before test day: fees and rules can change.
California Contractor Law and Business Exam Topics
The official content outline has 7 topics:
| Topic | Share of the exam |
|---|---|
| Business Organization and Licensing | 13% |
| Business Finances | 15% |
| Employment Requirements | 20% |
| Insurance and Liens | 12% |
| Contract Requirements and Execution | 21% |
| Public Works | 5% |
| Safety | 14% |
California Contractor Law and Business Exam Prep Checklist
- Study the topics in the outline. This is a closed-book exam, so you work from memory.
- Start with the biggest topics: Contract Requirements and Execution and Employment Requirements (41% of the exam).
- Take our timed practice exams until you pass several in a row.
- Read the explanation and reference for every question you miss.
California Contractor Law and Business Exam Reference Books
CSLB lists these study resources (none may be brought into the exam room): California Contractors License Law & Reference Book; California Employer's Guide (DE 44), EDD; California Financial Code (PACE program); California Labor Code; Get Licensed to Build (CSLB); Maintain and Change Your License (CSLB); NASCLA Contractors Guide to Business, Law and Project Management, 14th Edition; IRS Publication 15 (Circular E), Employer's Tax Guide; the Department of Industrial Relations (DIR) Public Works Manual; and the Cal/OSHA General Industry & Electrical Safety Orders and Construction & Electrical Safety Orders (California Code of Regulations, Title 8).
Test Day Checklist
- First pass: answer every question you know. Bookmark the rest. Every exam lets you return to bookmarked questions (some lock them once you take a break).
- Second pass: work through your bookmarks.
- Last step: answer anything still blank. A blank can't earn a point.
Study Tips
Reading the material cover to cover usually isn't enough to pass. This is a multiple-choice exam, and multiple choice rewards practice — the more questions you work through under real conditions, the more the terminology and question style become second nature.
Read the explanation for every question — right or wrong. Understanding the underlying rule lets you answer reworded questions you've never seen, instead of memorizing specific answers.
Several 25–30 minute sessions across the week beat one long cram. Spaced repetition moves facts into long-term memory so they stick through exam day.
Practicing against a ticking clock is the best way to beat exam-clock anxiety. Use these timed tests to build your pacing, so you learn to move steadily and never burn too long on a single question. By test day, the format feels routine.
California Contractor Law and Business Sample Questions
From our practice question bank, with answers and references:
Sample 1 — Safety
Question: Cal/OSHA requires a dust reduction system when powered tools are used to cut, grind, core, or drill concrete or masonry. Which of these operations is outside that dust-control requirement entirely?
- A. Cutting block with a masonry saw
- B. Core drilling a concrete wall
- C. Grinding a concrete floor slab
- D. Drilling in a downward direction
Correct Answer: D
The scope exceptions list downward drilling as an operation to which the section does not apply, along with stucco and plastering material, wall cladding and siding, powder-actuated tool work, and work incidental to installing concrete and masonry materials. Core drilling, saw cutting, and grinding of concrete or masonry remain covered and require a dust reduction system.
Reference: Cal/OSHA Title 8 Construction Safety Orders, §1530.1(a)
Sample 2 — Business Organization and Licensing
Question: Your limited partnership license lists two general partners and one limited partner. The sole limited partner disassociates from the partnership, and the general partners remain unchanged. What happens to the license?
- A. The license continues with the general partners
- B. The license continues as a general partnership
- C. The license must be canceled by CSLB
- D. The license is suspended for 90 days
Correct Answer: C
A limited partnership license may add or remove limited partners without cancellation only if all general partners remain the same AND at least one limited partner remains listed. If all limited partners leave, the partnership license must be canceled; a Disassociation Request must be filed within 90 days of the disassociation date.
Reference: Maintain and Change Your License (CSLB), Change in Personnel — Partner of a Limited Partnership
Sample 3 — Insurance and Liens
Question: A corporation's contractor license is qualified by a Responsible Managing Officer. A separate Bond of Qualifying Individual is NOT required if that RMO owns at least what percentage of the corporation's voting stock?
- A. 5 percent
- B. 51 percent
- C. 20 percent
- D. 10 percent
Correct Answer: D
An RMO who owns 10 percent or more of the voting stock of the corporation is not required to file a Bond of Qualifying Individual; instead, the RMO completes and submits a Bond of Qualifying Individual Exemption Certification. An RME, or an RMO owning less than 10 percent, must file the qualifier bond.
Reference: Maintain and Change Your License (CSLB), Bond Information – Bond of Qualifying Individual (B&P Code § 7071.9)
Sample 4 — Public Works
Question: A contractor is found to have performed work in violation of the skilled and trained workforce requirements. Absent a prior violation, the civil penalty may be assessed at up to ___ per month of work performed in violation (rising to up to $10,000 per month for a second or subsequent violation within three years).
- A. $2,000
- B. $5,000
- C. $1,000
- D. $3,000
Correct Answer: B
Public Contract Code § 2603 makes contractors and subcontractors liable for penalties of up to $5,000 per month of work performed in violation of the STW requirements, and up to $10,000 per month for a second or subsequent violation within a three-year period. Violations are enforced using the Labor Code §§ 1741 and 1742 process.
Reference: California Public Works Manual (Labor Commissioner), Section 7.2 / Public Contract Code § 2603
Online Practice vs. a PDF
- Timed: you practice answering under time pressure, not just reading the material.
- Bookmarks: flag questions and come back, the way you will on test day.
- New sets: each attempt draws new questions from our bank.
- Scored by topic: your results show which outline topics need more study.
Next Step
- Take the free California Contractor Law and Business practice exam.
- Study the topics where you scored lowest.
- Read the exam bulletin for the official rules, and see the licensing board's website.