Updated January 12, 2026 · 13 min read
California Law & Business Exam: Complete Study Guide
Every California contractor takes the same 115-question Law & Business exam regardless of classification. It's open to any applicant and covers the business, legal, and financial mechanics of running a licensed contracting business. Passing score is 72%.
Exam format
115 multiple-choice questions, 3.5 hours, closed-book, computer-based at a PSI center. Only 100 are scored — 15 are pretest items you won't be told about.
Seven content areas
1) Business Organization & Licensing (~13%), 2) Business Finances (~15%), 3) Employment Requirements (~16%), 4) Bonds & Insurance (~10%), 5) Contract Requirements & Execution (~19%), 6) Public Works (~7%), 7) Safety (~20%).
Top failure topics
Mechanic's liens (20-day preliminary notice deadlines), employee vs. independent-contractor classification (ABC test), workers' comp thresholds, and contract disclosure language required by B&P §7159.
Four-week study plan
Week 1: read the CSLB Law & Business study guide end-to-end. Week 2: drill flashcards on payroll, bonds, insurance. Week 3: take three full timed practice exams; review every miss. Week 4: focus practice on your two weakest content areas; take one final full exam 48 hours before your PSI appointment.
Applies to these licenses
Frequently asked
Is Law & Business the same for every classification?
Yes. One exam, taken once. If you already passed it for a prior CSLB license within the last five years, CSLB waives it on your next application.
What's the passing score?
72%. Score reports are pass/fail only — you don't see your exact number.
How many people fail?
Roughly 30-40% of first-time takers fail Law & Business. Nearly all failures cluster in the Contracts and Employment sections.
Ready to prep for your CSLB exam?
Full course, unlimited practice exams, AI tutor, and flashcards, built for every California classification. $399 one-time.