Utah Contractor Practice Exam

When does the contractor typically pay for delivered materials?

1. 30 days after delivery

2. C.O.D.

3. Before delivery

4. After the materials are installed

The correct answer is: Before delivery

The contractor typically pays for delivered materials before delivery to ensure that the supplier is compensated for the materials prior to them being handed over. This practice establishes a trust-based relationship and helps ensure the timely procurement of necessary supplies for a project. Additionally, paying upfront can sometimes secure favorable pricing or terms, as suppliers are more willing to negotiate when they have assurance of payment. In many cases, contractors will order materials in advance of needing them on the job site to prevent delays in the construction schedule. This approach allows for any potential issues, such as backorders or delivery delays, to be addressed before the construction timeline is impacted. Other payment options, such as cash on delivery or payment after installation, are less common. Cash on delivery may create a situation where the contractor could be left without the materials needed if the payment isn't made immediately, and paying after installation could disrupt cash flow management for the contractor and lead to resource allocation issues on the job site.