Contractor License Practice Exam

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Prepare for the Contractor License Exam with comprehensive quizzes. Study with multiple choice questions, flashcards, and detailed explanations to ensure you're ready for success on exam day!

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What must the owner do before legally withholding payment to a Prime Contractor for a Subcontractor's claim?

Consult with a lawyer
Check payment records
Ask the subcontractor for proof
Notify the Prime Contractor verbally

The correct answer is: Check payment records

Before an owner can legally withhold payment from a Prime Contractor due to a Subcontractor's claim, it is crucial for them to check payment records. This step is essential because it ensures that the owner is fully aware of the payment statuses and obligations associated with the project. By examining the payment records, the owner can verify whether the Subcontractor has indeed not been compensated for the work performed or if there are any discrepancies in the payments made. Understanding the payment history also provides clarity regarding the financial relationships and contractual obligations between all parties involved—this knowledge is vital in making informed decisions about withholding payment. Owners must ensure that their actions are grounded in accurate information to avoid potential disputes or legal issues that may arise from incorrect assumptions about payment status.