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California · Contractor Law & BusinessCSLB Law & Business Practice Test 2026 (California Contractor Exam)
Every qualifier for a California contractor license has to pass the CSLB Law and Business exam, unless they qualify for a waiver. It is a closed-book, multiple-choice test with a 3½-hour limit. It covers business organization, finances, employment, insurance and liens, contracts, public works, and safety. This page explains the format, fees, and scheduling steps using what the Contractors State License Board (CSLB) itself publishes, and it tells you plainly where CSLB does not publish a number.
The ExamCleared practice test is an independent study tool. We are not affiliated with CSLB or PSI Exams. Our bank has 238 original questions written from the Contractors State License Law, the Civil Code, the Labor Code, and the official CSLB study materials. Each question has an explanation and a citation to the statute or official source, along with the date we last verified it. You also get a timed, full-length mock exam: 100 questions in 3.5 hours (CSLB does not publish the exact question count, so this is our practice format). You can try 10 questions free without an account. Access costs one price with no subscription: $39 for 60 days or $59 for 120 days, and it comes with a 7-day money-back guarantee. Covers the Law & Business exam only — not your trade exam.
- Questions
- Not published by CSLB (multiple choice, 4 options each)
- Time
- 3½ hours (210 minutes)
- To pass
- Not published; CSLB says it varies for each exam
- Exam fee
- $450 application fee; $100 per retake or no-show reschedule
- Required course
- None required
Free CSLB practice test questions
Five sample questions from the bank — open each answer to see the explanation and the legal source. Take the free 10-question test to practice with a timer and a score.
1. A contractor runs a weekly payroll that closes every Saturday. Under Labor Code §204(d), what is the latest day to pay wages for a payroll period that closes on Saturday, June 6?
- Monday, June 8
- Friday, June 12
- Saturday, June 13
- Friday, June 26
Show answer
Answer: C. Saturday, June 13
Weekly, biweekly, and semimonthly payrolls meet §204 if wages are paid no more than seven calendar days after the period closes. June 6 + 7 days = Saturday, June 13.
Source: Lab. Code §204(d) · verified 2026-11-07
2. A home improvement contract depends on the buyer getting a loan for the contract price. What may the contractor do before the lender agrees, the buyer accepts the loan, and the loan rescission period ends?
- Deliver the cabinets and fixtures to the job site
- Begin demolition of the existing kitchen structure
- Obtain building permits and similar preliminary services
- Collect the first scheduled progress payment
Show answer
Answer: C. Obtain building permits and similar preliminary services
Until the loan conditions are met, the contractor may only perform services such as getting building permits, which are preliminary work for which no mechanics lien can be claimed. Delivering property or doing other work is unlawful.
Source: Bus. & Prof. Code §7163(b)(1) · verified 2026-11-07
3. A contractor's balance sheet is dated December 31. A bank loan payment is due the following June 30. How is that payment classified?
- As a long-term liability
- As a current asset
- As a current liability
- As part of stockholders' equity
Show answer
Answer: C. As a current liability
Current liabilities are debts due within one year of the balance sheet date, so a payment due in six months is current. Only amounts due more than one year out are long-term liabilities.
Source: 2026 Law Book, Sec. III, Ch. 3, Liabilities – Current Liabilities (p. 32) · verified 2026-11-07
4. A B-2 Residential Remodeling contractor may take a contract only if it involves at least how many unrelated building trades or crafts?
- Two
- Four
- One
- Three
Show answer
Answer: D. Three
A B-2 contractor works on existing residential wood-frame structures. It may not take a contract unless the contract includes three or more unrelated trades or crafts. It also may not make structural changes to load-bearing parts of the building.
Source: Bus. & Prof. Code §7057.5(b)(2) · verified 2026-11-07
5. How must a personal fall arrest system be rigged so that it limits an employee's free fall?
- Free fall of no more than 6 feet, with no contact with any lower level
- Free fall of no more than 10 feet, as long as the harness is rated for it
- Free fall of no more than 2 feet in every case, for all types of systems
- Free fall of any distance, if the lanyard is anchored at the employee's feet
Show answer
Answer: A. Free fall of no more than 6 feet, with no contact with any lower level
A personal fall arrest system must be rigged so the employee can neither free fall more than 6 feet nor contact any lower level. Where practicable, the lanyard must be anchored no lower than the waist. The 2-foot limit applies to positioning devices.
Source: 8 CCR §1670(b)(11)(B) · verified 2026-11-07
What the California contractor Law and Business exam is and who takes it
To get a California contractor license, the applicant must pass both the Law and Business exam and a trade exam for the classification they are applying for, unless they meet the requirements for an exam waiver. The person who takes the exams is the qualifier: the individual who directly supervises and controls the construction operations under the license.
- C-61 Limited Specialty applicants do not take a trade exam, but they still take the Law and Business exam.
- CSLB may waive the exams in some cases. For example, the person may currently be the qualifier for a license in good standing in the same classification, or may have passed both exams in that classification within the last five years. Other waivers are listed in Business and Professions Code sections 7065.1–7065.3.
- CSLB offers the Law and Business exam in Spanish. Note Spanish where the application asks about a translator, then pick the Spanish option when you schedule with PSI.
Source: CSLB, Get Licensed to Build.
CSLB Law and Business exam format: questions, time, and passing score
- Delivery: computer-based at PSI test centers. A system tutorial on screen walks you through how to use it.
- Question type: multiple choice with four choices per question. CSLB writes the questions so that only one answer is the BEST answer.
- Time limit: 3½ hours.
- Closed book: you cannot use any reference materials. Some questions involve math, and a calculator is provided. Textbooks, notes, and reading materials are on CSLB's list of prohibited items.
- Guessing: wrong answers carry no penalty, so answer every question.
- Number of questions: CSLB and PSI do not publish an official count. The figures on unofficial prep sites are not confirmed by CSLB.
- Passing score: CSLB does not publish a fixed percentage. It says the percentage varies for each exam and that applicants can ask CSLB.
Sources: CSLB Law and Business Study Guide (13E-LAW, 03-2026), CSLB Examination FAQ.
Fees and how to register and schedule
- Submit your license application to CSLB. The original application fee is $450 (exam or waiver, one classification).
- After CSLB refers your application for testing, it mails you a Notice to Schedule for Examination.
- Schedule and pay with PSI online at test-takers.psiexams.com/cacon, which is available 24 hours a day, or call PSI at (877) 392-6422. PSI also offers the Law exam in some states outside California, and the FAQ lists which ones.
- You can cancel and reschedule without losing your fee if PSI receives your cancellation two days before the exam date.
If you miss an exam or fail it, each reschedule costs a non-refundable $100 fee. You have 18 months from the date CSLB accepts your application to pass. After that, the application is void and you have to apply again and pay new fees.
Sources: CSLB List of Fees, CSLB Examination FAQ.
Prerequisites: age, experience, and education
- The qualifier must be at least 18 years old.
- The qualifier needs four years of at least journey-level experience in the last 10 years, in the classification they are applying for. People with firsthand knowledge of the work must be able to verify it.
- California has no specific education or course requirement. CSLB is not affiliated with any license preparation school.
No pre-licensing course is required. This practice test is an optional study aid and works alongside CSLB's free study guide and Law Book.
Source: CSLB, Get Licensed to Build.
Topics on the CSLB Law and Business test
The official study guide divides the exam into seven sections. CSLB describes the percentages as approximate.
- Contract Requirements and Execution (21%): bidding, cost control, project organization, contracts (including home improvement contract rules), payments.
- Employment Requirements (20%): hiring, supervising, and training employees; recordkeeping; payroll.
- Business Finances (15%): cash management, budgeting and planning, taxes, financial reporting.
- Safety (14%): training and reporting requirements, general safety, hazardous and unknown materials.
- Business Organization and Licensing (13%): company organization, licensing requirements, advertising and subcontracting.
- Insurance and Liens (12%): workers' compensation, business insurance, mechanics liens and other remedies.
- Public Works (5%): prevailing wage, bonding, and insurance requirements.
Source: CSLB Law and Business Study Guide.
Study tips for the CSLB law and business practice test
- Make the Law Book your main text. The 2026 California Contractors License Law & Reference Book is free from CSLB. Read the sections on licensing, home improvement contracts, and liens in the actual statutory text.
- Use the outside references the study guide lists. For employment questions, use the EDD Employer's Guide (DE 44) and IRS Publication 15. Use the DIR Public Works Manual for public works and Cal/OSHA Title 8 for safety.
- Put deadlines and dollar limits on flashcards. Many questions turn on an exact number of days or dollars, such as lien notice deadlines, cancellation periods, and contract thresholds. Learn each one along with its code section.
- Read for the BEST answer. More than one choice can sound reasonable. Pick the one that matches the statute most exactly.
- Practice the math. Some questions require calculations, such as markup compared with margin, or payroll and financial ratios. Do these on paper under a time limit.
- Take a timed mock exam. Practice in one sitting of 3½ hours or less, with no notes, so the real exam's closed-book format feels familiar.
After you pass: getting your license issued
When you pass, you get a letter at the test site that explains what is left before CSLB can issue the license. The steps include:
- An initial license fee of $200 for a sole owner or $350 for a non-sole owner.
- Completing the asbestos open-book exam.
- Fingerprints for a criminal background check from every first-time applicant listed on the application.
- A $25,000 contractor’s bond or cashier's check (active licenses only).
- Proof of workers' compensation insurance, or an exemption if you have no employees (active licenses only).
Exam results stay valid for five years. If you pass one exam and fail the other, you only need to retake the one you failed.
Source: CSLB, Get Licensed to Build.
Pricing
Practice free with 10 questions. Full access is a one-time payment — no subscription, no auto-renewal, 7-day money-back guarantee.
Full access unlocks all 238 questions with explanations and sources, practice by topic, a timed full-length practice exam and your results by topic. No account is needed: after checkout you get a personal access code — save it to use your access on your other devices. Your access period starts immediately after purchase.
Frequently asked questions
How long is the CSLB Law and Business exam?
You get 3½ hours to complete each CSLB exam.
How many questions are on the California contractor law and business exam?
CSLB and PSI do not publish an official question count. All CSLB says is that the questions are multiple choice, with four choices each.
What score do I need to pass?
CSLB does not publish a fixed passing percentage. It says the percentage varies for each exam, and you can ask CSLB about it.
Is the Law and Business exam open book?
No. It is closed book and you cannot use any reference materials. A calculator is provided for the questions that involve math.
Do I need a pre-licensing course?
No. California has no specific education or course requirement for a contractor license.
What happens if I fail?
You can retake the exam after 21 calendar days. Each reschedule costs a non-refundable $100 fee, and you have to pass within 18 months of CSLB accepting your application.
Is there a free CSLB practice test?
CSLB publishes a free study guide and a free Law Book. ExamCleared has 10 free practice questions you can try without an account. They are original questions, not questions from the real exam.
Can I take the exam in Spanish?
Yes. CSLB offers the Law and Business exam in Spanish. Note Spanish on your application, then choose the Spanish option when you schedule with PSI.
Is the CSLB Law and Business exam hard?
It depends on your preparation. The official passing score is not published; CSLB says it varies for each exam. The most reliable way to check is a timed full-length practice exam: ours has 100 questions and shows your percentage against a practice target, and your results by topic show which areas still need work.
Related practice tests
Sources
- https://www.cslb.ca.gov/About_Us/Examination_FAQ.aspx — Time limit 3½ hours
- https://www.cslb.ca.gov/Resources/StudyGuides/LawStudyGuide.pdf — Four choices per question, one BEST answer, closed book, calculator provided, no guessing penalty
- https://www.cslb.ca.gov/Resources/GuidesAndPublications/GetLicensedToBuild.pdf — Passing percentage not fixed
- https://www.cslb.ca.gov/about_us/library/fees.aspx — $450 original application fee
- https://www.cslb.ca.gov/Resources/IndustryBulletins/2023/23-05SpanishLawExam.pdf — Spanish Law and Business exam
ExamCleared is independent and not affiliated with Contractors State License Board (CSLB), California Department of Consumer Affairs; administered by PSI Exams. Our questions are original practice questions written from public law and official materials — not actual exam questions. Confirm current requirements with the official agency before you register.