The answer to this question is both yes and no.

The contractor is responsible for making a thorough inspection of the area of the remodel to identify any problems that can be anticipated. Unless the contractor actually knocks holes in walls and tears out wiring or plumbing, it might not be possible to identify all problems before the contract is written.

Termite damage inside walls or faulty wiring inside walls cannot be anticipated in many cases. Discovering a problem as the work progresses is not all that uncommon.

It does not mean a contractor is incompetent.