Oregon Construction Contractors (CCB) Practice Test

What is the primary purpose of a residential construction or improvement contract?

1. To manage labor costs

2. To agree on the construction or improvement of a residential property

3. To sell the property

4. To maintain appurtenant structures

The correct answer is: To agree on the construction or improvement of a residential property

The primary purpose of a residential construction or improvement contract is to agree on the construction or improvement of a residential property. This type of contract outlines the scope of work to be performed, the materials to be used, timelines for completion, payment terms, and other essential details that both parties must adhere to during the project. Such agreements ensure that all parties involved have a clear understanding of their responsibilities and expectations, which helps in reducing misunderstandings and disputes. While managing labor costs is important in a construction project, it is typically a specific objective rather than the primary purpose of the contract. Selling the property and maintaining appurtenant structures are also relevant considerations in real estate and construction, but they do not encompass the broader intent of a construction contract, which is fundamentally about defining and agreeing upon the work to be undertaken on a residential property.