Construction Contracts Exam Questions With Complete
Solutions
a bid without a bid security (bid bond,
check, or cash), or one with a bid security that is too low, will
not be considered.
Bids without a signature are often
considered, because of the obvious intent of the bidder
"No Excuse Bonus" Correct Answers
• Field overhead Correct Answers (project superintendent, field
supervisors, clerks, inspectors).
3 C's Correct Answers Character, Capacity, Capital
a CM at risk project Correct Answers the CM bond covers only
the CM's fee, the general conditions, the insurance (builder's risk
insurance) on the facility being constructed, and other items not
normally covered by the bonds of specialty contractors.
The specialty contractors would then provide 100 percent
performance and payment bonds for their
own work.
double bonding
a maintenance bond / warranty Correct Answers
,a stop notice to owner by subcontractors and suppliers Correct
Answers the subcontractors and suppliers have not been paid
and that further payments
are to be withheld by law from the contractor
Acceptance of the contractor's shop drawings Correct Answers
it does not relieve the contractor of liability
acceptance does not relieve the contractor of responsibility
for complying with the plans and specifications. The only
exception here occurs
when the contractor can clearly demonstrate that the owner was
fully aware that
the shop drawings altered the original plans.
addenda Correct Answers the issuance of an addendum or
several addenda
formal changes or clarifications issued by the owner or owner's
representative to all identified bidders during the bidding period.
If assumptions will have a significant impact on the final
tabulation of the bid, it is prudent for the bidding contractor to
request an interpretation
that is typically made by the designer in the form of an
addendum.
adhesion contract Correct Answers A standard-form contract in
which the stronger party dictates the terms.
general contractor-sub-contractor
,agency Correct Answers principal- agent
voluntary relationship, unilateral termination without breaching
the contract
ratification ( official) of an unauthorized act and estoppel
act within the stated scope of authority
exercise discretion(the freedom to decide what should be done
in a particular situation.), enter into contracts
The principal is liable for the criminal acts of the agent if assent
is given prior to their occurrence,
Alternates Correct Answers bidding process, modifications to
the base bid
alternative dispute resolution(ADR) Correct Answers
an Initial
Decision Maker (IDM) Correct Answers an outside third party
who can be selected by the
disputing contractor and owner; if none is selected, the architect
will become the IDM
by default.
arbitration Correct Answers binding
, arbitration, particularly construction contracts in the private
sector. Binding arbitration
means that the disputing parties will agree to adhere to the
decision
reached.
that the
procedures of the American Arbitration Association be used.
Provisions mandating binding arbitration for resolving disputes
The American Arbitration Association maintains a slate of
prequalified potential
arbitrators, including lawyers, contractors, claims consultants,
architects, and
engineers, who can be hired to resolve disputes
three arbitrators for larger disputes
the arbitration hearings
Arbitration differs from litigation in that the rules of evidence
are eased and
the discovery proceedings are not formally defined.
is, the disputing parties cannot appeal the decision unless they
can prove fraud, lack of impartiality, conflict of interest, or bad
faith, or show that
the scope of authority of the arbitrators was exceeded. Unlike
litigation, the rationale
for an arbitration decision does not become public record
Solutions
a bid without a bid security (bid bond,
check, or cash), or one with a bid security that is too low, will
not be considered.
Bids without a signature are often
considered, because of the obvious intent of the bidder
"No Excuse Bonus" Correct Answers
• Field overhead Correct Answers (project superintendent, field
supervisors, clerks, inspectors).
3 C's Correct Answers Character, Capacity, Capital
a CM at risk project Correct Answers the CM bond covers only
the CM's fee, the general conditions, the insurance (builder's risk
insurance) on the facility being constructed, and other items not
normally covered by the bonds of specialty contractors.
The specialty contractors would then provide 100 percent
performance and payment bonds for their
own work.
double bonding
a maintenance bond / warranty Correct Answers
,a stop notice to owner by subcontractors and suppliers Correct
Answers the subcontractors and suppliers have not been paid
and that further payments
are to be withheld by law from the contractor
Acceptance of the contractor's shop drawings Correct Answers
it does not relieve the contractor of liability
acceptance does not relieve the contractor of responsibility
for complying with the plans and specifications. The only
exception here occurs
when the contractor can clearly demonstrate that the owner was
fully aware that
the shop drawings altered the original plans.
addenda Correct Answers the issuance of an addendum or
several addenda
formal changes or clarifications issued by the owner or owner's
representative to all identified bidders during the bidding period.
If assumptions will have a significant impact on the final
tabulation of the bid, it is prudent for the bidding contractor to
request an interpretation
that is typically made by the designer in the form of an
addendum.
adhesion contract Correct Answers A standard-form contract in
which the stronger party dictates the terms.
general contractor-sub-contractor
,agency Correct Answers principal- agent
voluntary relationship, unilateral termination without breaching
the contract
ratification ( official) of an unauthorized act and estoppel
act within the stated scope of authority
exercise discretion(the freedom to decide what should be done
in a particular situation.), enter into contracts
The principal is liable for the criminal acts of the agent if assent
is given prior to their occurrence,
Alternates Correct Answers bidding process, modifications to
the base bid
alternative dispute resolution(ADR) Correct Answers
an Initial
Decision Maker (IDM) Correct Answers an outside third party
who can be selected by the
disputing contractor and owner; if none is selected, the architect
will become the IDM
by default.
arbitration Correct Answers binding
, arbitration, particularly construction contracts in the private
sector. Binding arbitration
means that the disputing parties will agree to adhere to the
decision
reached.
that the
procedures of the American Arbitration Association be used.
Provisions mandating binding arbitration for resolving disputes
The American Arbitration Association maintains a slate of
prequalified potential
arbitrators, including lawyers, contractors, claims consultants,
architects, and
engineers, who can be hired to resolve disputes
three arbitrators for larger disputes
the arbitration hearings
Arbitration differs from litigation in that the rules of evidence
are eased and
the discovery proceedings are not formally defined.
is, the disputing parties cannot appeal the decision unless they
can prove fraud, lack of impartiality, conflict of interest, or bad
faith, or show that
the scope of authority of the arbitrators was exceeded. Unlike
litigation, the rationale
for an arbitration decision does not become public record
