Free NC General Contractor Exam Flashcards

The broadest NC classification — covers commercial, industrial, institutional, and residential building construction, demolition, site work, and specialty work like concrete, roofing, masonry, and pools.

Covers construction and demolition of residential units built to the NC Residential Code, plus ancillary site work. Narrower scope than Building — no commercial work.

Covers highway construction: grading, paving, bridges, culverts, airport runways, guardrails, fencing, and signage, plus specialty work in boring, concrete, and marine construction.

Covers water and wastewater system construction, with 5 subclassifications (communications, fuel distribution, electrical, water/sewer lines, water purification).

Covers a single specialized trade only, as defined by NCLBGC regulations — the narrowest classification scope.

Caps individual projects at $750,000. Requires $17,000 working capital (current asset surplus) or $80,000 net worth, or a $175,000 surety bond as an alternative.

Caps individual projects at $1,500,000. Requires $75,000 working capital (current asset surplus), or a $500,000 surety bond as an alternative.

No dollar cap on individual project value. Requires $150,000 working capital (current asset surplus), or a $1,000,000 surety bond as an alternative.

Any single project valued at $40,000 or more requires a licensed general contractor in North Carolina.

Contracting above the $40,000 threshold without an NC GC license is a Class 1 misdemeanor under GS Chapter 87.

NCLBGC accepts the NASCLA Accredited Examination as credit toward the trade exam for the Building classification ONLY. The NC Business & Law exam is still required.

A claim of lien on real property must be filed no later than 120 days after the last furnishing of labor or materials (GS Chapter 44A).

A lawsuit to enforce a filed mechanics lien must be commenced within 180 days of the last furnishing of labor or materials.

Subcontractors and suppliers must give notice to the project's designated lien agent within 15 days of first furnishing labor or materials to preserve full lien rights.

A performance bond protects the OWNER by guaranteeing job completion. A payment bond protects SUBS AND SUPPLIERS by guaranteeing they get paid.

In NC, a payment/performance bond is required on local (municipal/county) public contracts over $300,000, and on state public contracts over $500,000.

A fixed total price for the entire scope of work, regardless of the contractor's actual cost. The owner bears less price risk; the contractor bears more cost risk.

The owner reimburses the contractor's actual costs plus an agreed fee (fixed amount or percentage). This shifts cost risk to the owner.

Sets a price per measured unit of work (e.g., per linear foot or cubic yard). Common when exact quantities aren't known until work begins.

Bills the owner for actual labor hours worked plus materials used, typically with a markup. Common for smaller or undefined-scope jobs.

A cost-plus contract with a price ceiling — the contractor is paid actual cost plus fee, but total cost cannot exceed the guaranteed maximum.

A prime contractor must pay a subcontractor within 7 days of receiving payment from the owner for that sub's work (GS Chapter 22C).

Pay-if-paid clauses, which make owner payment a condition of paying the subcontractor, are UNENFORCEABLE in North Carolina — owner nonpayment is not a valid defense.

Under GS Chapter 22C, unpaid amounts owed to a subcontractor accrue interest at 1% per month until paid.

A contractor may not withhold retainage from a subcontractor at a higher percentage than the owner withholds from the prime contractor.

Mediation uses a neutral facilitator and is non-binding — parties keep control of the outcome. Arbitration is binding — the arbitrator decides, with limited appeal rights.

A written document that modifies the original contract's scope, price, or schedule. Extra work should always be documented with a change order before it begins.

Fall protection (guardrails, safety nets, or personal fall arrest systems) is required at 6 feet or more above a lower level on construction sites (29 CFR 1926.501).

Excavations 6 feet deep or greater generally require barricades or other fall protection at the edge to protect workers and the public.

OSHA requires a protective system (sloping, shoring, or shielding) for trenches 5 feet deep or greater, unless the excavation is entirely in stable rock.

Trenches 4 feet deep or greater require a ladder, ramp, or other safe means of exit within 25 feet of workers.

Open excavations and wells must be covered, or protected with guardrails or barricades, to prevent falls by workers and the public.

NC requires employers with 3 or more employees (including construction firms) to carry workers' comp insurance. A GC is also statutorily liable for an uninsured subcontractor's injured employees (GS 97-19).

The 2018 NC Building Code is the current edition in effect.

The 2024 NC Building Code edition takes effect July 31, 2026.

A building permit must be obtained from the local jurisdiction before construction work begins.

Construction work must pass inspections at defined code milestones (e.g., footing, framing, final) before work can proceed or the structure can be occupied.

NC's Sedimentation Pollution Control Act requires an erosion and sedimentation control plan for qualifying land-disturbing construction activity.

The process of measuring quantities of materials and labor needed for a project directly from the plans and specifications.

A scheduling method that identifies the longest sequence of dependent tasks (the critical path), which determines the shortest possible project duration.

The amount of time a task can be delayed without delaying the overall project finish date. Critical-path tasks have zero float.

A bar-chart timeline showing project tasks against a calendar, used to visualize schedule, duration, and overlap of activities.

Design-Bid-Build uses two separate, sequential contracts (designer, then contractor) with the owner holding both. Design-Build uses one firm for both roles under a single contract, usually faster.

A delivery method where the construction manager guarantees the project price (a GMP) and holds the trade contracts, taking on cost-overrun risk.

The individual responsible for day-to-day, on-site supervision of the work, coordinating trades, schedule, and site safety.

Accrual accounting records income and expenses when earned or incurred, matching them to the period of work. Cash accounting records them only when cash actually moves.

Working capital = Total Current Assets − Total Current Liabilities. NCLBGC uses this figure to qualify contractors for the Limited, Intermediate, and Unlimited license limits.

NCLBGC requires a CPA-prepared financial statement to document working capital or net worth for higher license limitation tiers (Intermediate and Unlimited).

A percentage of each payment withheld by the owner (or by the prime contractor from a sub) until the work is substantially complete, protecting against defects or non-completion.

A 1099 independent contractor pays self-employment tax and controls their own work methods. A W-2 employee has taxes withheld and works under the employer's direction — misclassification carries legal risk.