LARE UPDATED 2026 EXAM SCRIPT QUESTIONS AND
SOLUTIONS RATED A+
✔✔Final Completion - ✔✔the status of a project when all punch list items have been
satisfactorily addressed and the owner officially accepts the project. At this point, the
retainage can be released to the contractor.
✔✔Field Change - ✔✔an authorized directive, usually by the owner's representative on
a project, to alter or modify some aspect of the project. Normally, such a directive is not
accompanied by any change in the contract amount or duration.
✔✔Force Account - ✔✔arrangement in which the services of a contractor are
reimbursed on a cost plus basis; also referred to as a time and materials contract.
✔✔General Contract Method - ✔✔a common procedure in which a disproportionate
share of the payments to be made to the contractor is made early in the life of a project.
This is a means of getting the owner to finance a greater share of the project.
✔✔Implied Contract - ✔✔an agreement in which the terms of the agreement are not
clearly stated but are established through inference and deductive.
✔✔Implied Warranty - ✔✔the general interpretation in the courts that a warranty exists
despite the fact that there is no express warranty.
✔✔Inclusion - ✔✔specific items, as stated in an insurance policy, for which coverage is
specifically provided.
✔✔Indemnification - ✔✔an exculpatory provision in which one party to an agreement
agrees to hold the other party harmless. That is, one party assumes the liability that
would normally fall on another party.
✔✔Independent contractor - ✔✔a contractor hired to produce a product without being
specifically supervised or constrained by specific methods and means of performance.
✔✔Instructions to Bidders - ✔✔guidelines or rules enumerated for bidders on a project
concerning proper procedures for bid submittal and relevant project information.
✔✔Included in the Instructions to bidders... - ✔✔Typical instructions, an experience
record, list all documents, construction time, indicate who is responsible for what,
requirements of a bid guarantee, insurance, bonding requirements, conditions of
handling bid irregularities, where and when to deliver bids, closed or public indicated,
pre-bid conference described.
,✔✔Joint Venture - ✔✔a company formed by two or more companies in which the sole
objective is typically to construct a single project.
✔✔Lein - ✔✔a claim placed on a real property
✔✔Limited Partner - ✔✔a partner who contributes to a partnership and share in the
profits and losses, but provides no services and has no vote in matters of management.
✔✔Limits of Liability - ✔✔the maximum coverage for which a specific liability policy is
written.
✔✔Liquidated Damages - ✔✔a specified sum of money that is charged against a
contractor for each day that project completion is delayed. The amount is assumed to
accurately reflect the anticipated costs of late completion.
✔✔Litigation - ✔✔a means of resolving disputes in the judicial system in which a formal
claim is filed and the disputing parties typically obtain the services of lawyers.
✔✔Loss Ratio - ✔✔a quotation that reflects the amount of funds expended by an
insurance company for the claims of a client, divided by the amount of premiums paid
by the client.
✔✔Lump Sum Contract - ✔✔a contract in which the contractor agrees to construct a
project for a specified sum of money.
✔✔Minitrial - ✔✔an alternative to litigation in which one or more individuals are asked to
hear a case and render a decision. The rules for hearing such cases may be
established on an individual basis.
✔✔Mechanic's Lien - ✔✔a right created by law that permits a worker to place a claim on
land on which improvements have been made.
✔✔Mediation - ✔✔an alteration to litigation in which knowledgeable individuals' talents
are used to get the disputing parties to agree on a compromise resolution to the conflict.
✔✔Notice to Proceed - ✔✔a means of notifying the contractor about the decision to
award the contract and of specifying when the contract time will start.
✔✔Open Specification - ✔✔an open or nonrestrictive specification in which a wide
variety (three or more) of products are considered suitable.
✔✔Partnering - ✔✔voluntary arrangement whereby the parties on a construction project
agree to work together as a team with a common objective and to resolve disputes at
the lowest managerial level.
, ✔✔Partnership - ✔✔an association of two or more persons to carry on a business. Each
person acts as an agent for the other partners.
✔✔Penalty Provision - ✔✔a specific sum of money that is charged against a contractor
for each day that project completion is delayed. The amount is greater than the amount
of the liquidated damages because a portion of it is considered a punitive assessment.
To be valid, such provision must also compensate or reward the contractor for early
completion.
✔✔Payment Bond - ✔✔a surety instrument guaranteeing the bearer's payments to
suppliers, laborers or subcontractors.
✔✔Performance Bond - ✔✔a surety instrument in which the faithful performance of a
contractor is guaranteed up to the face value of the bond.
✔✔Performance Specification - ✔✔a descriptive requirement that states the results or
the performance of the finished product rather than the specific methods and means
used to construct the product.
✔✔Postbid bid shopping - ✔✔the efforts of a general contractor to get subcontractors to
lower their bids after the general contractor had been declared the low bidder.
✔✔Preconstruction conference - ✔✔a meeting between the owner, the general
contractor, and the major subcontractors that takes place after the contract is awarded
but before construction begins. This conference addresses various matters deemed to
be of importance to the project.
✔✔Professional construction management method - ✔✔a method in which the over
hires a construction management firm to perform professional services and represent
the owner during the design and construction phases.
✔✔Progress Payment - ✔✔a payment to the contractor that compensates the
contractor for work performed up to a given date. Such payments generally are made
monthly and are reduced by a given percentage that is retained by the owner until final
completion.
✔✔Proprietary Specification - ✔✔a closed specification that names a product made by
a particular manufacturer.
✔✔Proprietorship - ✔✔a firm owned by an individual.
✔✔Punch List - ✔✔a list developed at the time of substantial completion that itemizes
all remaining work tasks that must be performed before a project reaches final
completion.
SOLUTIONS RATED A+
✔✔Final Completion - ✔✔the status of a project when all punch list items have been
satisfactorily addressed and the owner officially accepts the project. At this point, the
retainage can be released to the contractor.
✔✔Field Change - ✔✔an authorized directive, usually by the owner's representative on
a project, to alter or modify some aspect of the project. Normally, such a directive is not
accompanied by any change in the contract amount or duration.
✔✔Force Account - ✔✔arrangement in which the services of a contractor are
reimbursed on a cost plus basis; also referred to as a time and materials contract.
✔✔General Contract Method - ✔✔a common procedure in which a disproportionate
share of the payments to be made to the contractor is made early in the life of a project.
This is a means of getting the owner to finance a greater share of the project.
✔✔Implied Contract - ✔✔an agreement in which the terms of the agreement are not
clearly stated but are established through inference and deductive.
✔✔Implied Warranty - ✔✔the general interpretation in the courts that a warranty exists
despite the fact that there is no express warranty.
✔✔Inclusion - ✔✔specific items, as stated in an insurance policy, for which coverage is
specifically provided.
✔✔Indemnification - ✔✔an exculpatory provision in which one party to an agreement
agrees to hold the other party harmless. That is, one party assumes the liability that
would normally fall on another party.
✔✔Independent contractor - ✔✔a contractor hired to produce a product without being
specifically supervised or constrained by specific methods and means of performance.
✔✔Instructions to Bidders - ✔✔guidelines or rules enumerated for bidders on a project
concerning proper procedures for bid submittal and relevant project information.
✔✔Included in the Instructions to bidders... - ✔✔Typical instructions, an experience
record, list all documents, construction time, indicate who is responsible for what,
requirements of a bid guarantee, insurance, bonding requirements, conditions of
handling bid irregularities, where and when to deliver bids, closed or public indicated,
pre-bid conference described.
,✔✔Joint Venture - ✔✔a company formed by two or more companies in which the sole
objective is typically to construct a single project.
✔✔Lein - ✔✔a claim placed on a real property
✔✔Limited Partner - ✔✔a partner who contributes to a partnership and share in the
profits and losses, but provides no services and has no vote in matters of management.
✔✔Limits of Liability - ✔✔the maximum coverage for which a specific liability policy is
written.
✔✔Liquidated Damages - ✔✔a specified sum of money that is charged against a
contractor for each day that project completion is delayed. The amount is assumed to
accurately reflect the anticipated costs of late completion.
✔✔Litigation - ✔✔a means of resolving disputes in the judicial system in which a formal
claim is filed and the disputing parties typically obtain the services of lawyers.
✔✔Loss Ratio - ✔✔a quotation that reflects the amount of funds expended by an
insurance company for the claims of a client, divided by the amount of premiums paid
by the client.
✔✔Lump Sum Contract - ✔✔a contract in which the contractor agrees to construct a
project for a specified sum of money.
✔✔Minitrial - ✔✔an alternative to litigation in which one or more individuals are asked to
hear a case and render a decision. The rules for hearing such cases may be
established on an individual basis.
✔✔Mechanic's Lien - ✔✔a right created by law that permits a worker to place a claim on
land on which improvements have been made.
✔✔Mediation - ✔✔an alteration to litigation in which knowledgeable individuals' talents
are used to get the disputing parties to agree on a compromise resolution to the conflict.
✔✔Notice to Proceed - ✔✔a means of notifying the contractor about the decision to
award the contract and of specifying when the contract time will start.
✔✔Open Specification - ✔✔an open or nonrestrictive specification in which a wide
variety (three or more) of products are considered suitable.
✔✔Partnering - ✔✔voluntary arrangement whereby the parties on a construction project
agree to work together as a team with a common objective and to resolve disputes at
the lowest managerial level.
, ✔✔Partnership - ✔✔an association of two or more persons to carry on a business. Each
person acts as an agent for the other partners.
✔✔Penalty Provision - ✔✔a specific sum of money that is charged against a contractor
for each day that project completion is delayed. The amount is greater than the amount
of the liquidated damages because a portion of it is considered a punitive assessment.
To be valid, such provision must also compensate or reward the contractor for early
completion.
✔✔Payment Bond - ✔✔a surety instrument guaranteeing the bearer's payments to
suppliers, laborers or subcontractors.
✔✔Performance Bond - ✔✔a surety instrument in which the faithful performance of a
contractor is guaranteed up to the face value of the bond.
✔✔Performance Specification - ✔✔a descriptive requirement that states the results or
the performance of the finished product rather than the specific methods and means
used to construct the product.
✔✔Postbid bid shopping - ✔✔the efforts of a general contractor to get subcontractors to
lower their bids after the general contractor had been declared the low bidder.
✔✔Preconstruction conference - ✔✔a meeting between the owner, the general
contractor, and the major subcontractors that takes place after the contract is awarded
but before construction begins. This conference addresses various matters deemed to
be of importance to the project.
✔✔Professional construction management method - ✔✔a method in which the over
hires a construction management firm to perform professional services and represent
the owner during the design and construction phases.
✔✔Progress Payment - ✔✔a payment to the contractor that compensates the
contractor for work performed up to a given date. Such payments generally are made
monthly and are reduced by a given percentage that is retained by the owner until final
completion.
✔✔Proprietary Specification - ✔✔a closed specification that names a product made by
a particular manufacturer.
✔✔Proprietorship - ✔✔a firm owned by an individual.
✔✔Punch List - ✔✔a list developed at the time of substantial completion that itemizes
all remaining work tasks that must be performed before a project reaches final
completion.
