Utah Contractor Practice Exam

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Prepare for the Utah Contractor Exam with comprehensive quizzes and study resources. Gain confidence by accessing multiple-choice questions designed to enhance your knowledge and skills for the licensing exam.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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Which type of bond guarantees that subcontractors and vendors will be compensated for their work?

Payment
Performance
Bid
All of the above

The correct answer is: Payment

The type of bond that guarantees that subcontractors and vendors will be compensated for their work is the payment bond. This bond is essential in construction projects, as it protects suppliers and subcontractors by ensuring they receive payment for their contributions to the project. If the general contractor fails to pay these parties for their work or materials, the payment bond serves as a financial assurance that they can still receive their due compensation. In contrast, a performance bond primarily guarantees that the contractor will fulfill their obligations as outlined in the contract, ensuring that the project is completed according to the specified terms. A bid bond, on the other hand, ensures that a contractor will honor their bid and enter into the contract if awarded the job. Neither the performance bond nor the bid bond directly addresses the compensation of subcontractors and vendors, which is the critical role of the payment bond.