Free General Contractor License Exam Questions That Helps Candidates Pass

A dispute resolution clause specifies how disagreements between contractors and clients will be handled, whether through mediation, arbitration, or litigation. This provision reduces uncertainty, saves time and costs, and ensures both parties know their legal recourse in advance. Payment schedules (A), warranties (B), and scope (D) are critical parts of the contract but do not directly govern disputes. Virginia emphasizes strong contract management to reduce risks of project delays and litigation.

Only a corporation must file Articles of Incorporation with the state to legally exist. LLCs file Articles of Organization. Sole proprietors and partnerships do not file incorporation documents.

A force majeure clause excuses performance delays or nonperformance due to uncontrollable events such as natural disasters, strikes, or war. It does not cover wage disputes or OSHA penalties.

Contractors must provide the “Notice to Employees” poster and details of workers’ compensation insurance coverage. This ensures employees know their rights to medical care and benefits for work-related injuries.

A sole proprietorship is the simplest and least expensive entity to establish. It requires minimal paperwork but offers no liability protection. Corporations and LLCs (A, C) require formal filings and fees, while partnerships (D) involve agreements. Many contractors begin as sole proprietors but often transition to LLCs for liability protection.