Residential Builder's Salesperson Practice Exam 2025 - Free Residential Builder's Salesperson Practice Questions and Study Guide

Question: 1 / 400

If a construction contractor is unable to fulfill a contract, what could be an outcome of good faith payments made by a customer?

The customer is entitled to a full refund

The customer may forfeit their payment

A subcontractor may claim from the construction lien recovery fund

Selecting that subcontractors may claim from the construction lien recovery fund aligns with principles of how construction contracts and payment structures operate. If a construction contractor fails to fulfill a contract, good faith payments made by the customer can often be an area of contention.

In this situation, subcontractors, who may not have received their payments due to the contractor's inability to complete the work, can seek compensation from the construction lien recovery fund. This fund is established to protect subcontractors and suppliers in cases where the primary contractor defaults or is unable to pay them, ensuring that those who provided labor or materials are compensated for their contributions.

The other outcomes presented do not directly relate to the mechanism provided by lien laws. While customers may expect refunds or have rights related to their contracts, these are typically determined by the specific terms of the contract and local laws rather than automatically triggering a claim to a recovery fund. Thus, understanding the role of the construction lien recovery fund is vital in scenarios where a contractor is unable to fulfill their obligations.

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The contract is automatically voided

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