AFSB 152 UPDATED 2026 EXAM SCRIPT QUESTIONS AND
SOLUTIONS RATED A+
✔✔Mediation has become a favored form of dispute resolution. Which one of the
following statements is true regarding mediation?
- Mediation is the most time-consuming form of dispute resolution.
- Mediation encourages parties to make offers and counteroffers.
- Mediation develops a solution which is final and binding.
- Mediation often results in shock verdicts. - ✔✔Mediation encourages parties to make
offers and counteroffers.
✔✔Which one of the following is correct regarding the statute of limitations for filing a
lawsuit regarding a claim under the Miller Act?
- The statute of limitations is one year.
- The statute of limitations is 90 days.
- There is no statute of limitations.
- The statute of limitations is determined by state law. - ✔✔The statute of limitations is
one year.
✔✔Contractor Marshall has been presented with a unit-priced contract from project
owner Grayson Properties. A unit-price contract is used
- For most construction contracts.
- To provide a sharing agreement.
- To provide a maximum guaranteed price.
- When the quantity of work cannot be determined in advance. - ✔✔When the quantity
of work cannot be determined in advance.
✔✔Which one of the following is true regarding joint ventures?
- All partners must participate equally in a joint venture.
- All partners are always fully responsible for the entire project.
- In a silent joint venture, the silent partner has limited responsibility.
- A limited joint venture can be formed to limit an individual's participation. - ✔✔A limited
joint venture can be formed to limit an individual's participation.
✔✔Which one of the following correctly describes those who must give notice to the
prime contractor under the Miller Act?
- Only second-tier claimants are required to give notice to the prime contractor.
- No one filing a claim under the Miller Act is required to give notice to the prime
contractor.
- Only first-tier claimants are required to give notice to the prime contractor.
- All claimants are required to give notice to the prime contractor. - ✔✔Only second-tier
claimants are required to give notice to the prime contractor.
✔✔Ewing General Contracting (EGC) entered a contract to complete a major
renovation for Ralph's Restaurant. Because Ralph's is located in a tourist town, it was
,important that the construction work be completed by May 1. The construction contract
included a provision that stated that if the job was not completed by May 1, EGC would
be assessed $500 a day for each day of delay in completing the project. These
damages to be paid by EGC are known as
- Direct damages.
- Consequential damages.
- Liquidated damages.
- Actual damages. - ✔✔Liquidated damages.
✔✔The costliest method of contract dispute resolution is typically
- Contract termination.
- Mediation.
- Arbitration.
- Litigation. - ✔✔Litigation.
✔✔A proprietor of a sole proprietorship is
- Entitled to all the profits and responsible for a portion of liabilities.
- Entitled to all the profits and is not responsible for any liability.
- Entitled to a portion of the profits and responsible for all liabilities.
- Entitled to all the profits and responsible for all liabilities. - ✔✔Entitled to all the profits
and responsible for all liabilities.
✔✔Which one of the following correctly describes a state mechanic's lien law?
- A state mechanic's lien law allows a laborer to file a lien against a contractor or
subcontractor.
- A state mechanic's lien law allows a contractor to file a lien against the state
government.
- A state mechanic's lien law allows a subcontractor to file a lien against the primary
contractor.
- A state mechanic's lien law allows a supplier of labor or materials to file a lien against
the property owner's real estate. - ✔✔A state mechanic's lien law allows a supplier of
labor or materials to file a lien against the property owner's real estate.
✔✔The construction industry most commonly uses the
- Cost-plus contract.
- Unit-price contract.
- Guaranteed maximum price contract.
- Fixed-price contract. - ✔✔Fixed-price contract.
✔✔Which one of the following correctly describes the employer-employee relationship
in the construction industry?
- The National Labor Relations Act determines all aspects of the employer-employee
relationship in the construction industry.
- The employer-employee relationship in the construction industry is the same as in
most other industries.
, - There are typically employees of different employers, some of whom may be union
members, in the construction industry.
- The employer-employee relationship in the construction industry is always influenced
by unions. - ✔✔There are typically employees of different employers, some of whom
may be union members, in the construction industry.
✔✔Which one of the following correctly describes a contractor's responsibility for
workmanship or materials after completion of a contract?
- The contractor has no responsibility for workmanship or materials after a contract is
completed.
- The contractor under implied warranty is responsible for workmanship or materials for
a reasonable time after a contract has been completed.
- The contractor, unless there is an express warranty with a time limit, is responsible
indefinitely for workmanship or materials after a contract has been completed.
- The contractor is responsible for workmanship or materials after a contract is
completed only if there is an express warranty clause. - ✔✔The contractor under
implied warranty is responsible for workmanship or materials for a reasonable time after
a contract has been completed.
✔✔If a general indemnity agreement covers joint ventures,
- The surety's rights are limited to the indemnity agreement's parties.
- The surety's rights extend to all parties to the joint venture.
- The agreement automatically extends to the surety's reinsurers.
- Each surety can rely on its general indemnity agreements. - ✔✔The surety's rights are
limited to the indemnity agreement's parties.
✔✔Lido Roofing's work is generally subject to an implied warranty. Which one of the
following statements is correct regarding an implied warranty for a roofing contractor?
- It typically applies for a 20-year period.
- It begins with the purchase of the materials.
- It does not begin until installation is completed.
- It includes coverage for excessive wear and tear. - ✔✔It does not begin until
installation is completed.
✔✔Which one of the following is correct regarding the contractor's risk in a cost-plus
contract?
- The contractor's risk in a cost-plus contract is higher than it would be in a fixed-price
contract.
- There is more risk in a cost-plus contract than in a unit-price contract.
- Cost-plus contracts expose the contractor to little or no risk because costs are
reimbursed.
- The "plus" in a cost-plus contract is a fixed amount and is not related to the
contractor's risk. - ✔✔Cost-plus contracts expose the contractor to little or no risk
because costs are reimbursed.
SOLUTIONS RATED A+
✔✔Mediation has become a favored form of dispute resolution. Which one of the
following statements is true regarding mediation?
- Mediation is the most time-consuming form of dispute resolution.
- Mediation encourages parties to make offers and counteroffers.
- Mediation develops a solution which is final and binding.
- Mediation often results in shock verdicts. - ✔✔Mediation encourages parties to make
offers and counteroffers.
✔✔Which one of the following is correct regarding the statute of limitations for filing a
lawsuit regarding a claim under the Miller Act?
- The statute of limitations is one year.
- The statute of limitations is 90 days.
- There is no statute of limitations.
- The statute of limitations is determined by state law. - ✔✔The statute of limitations is
one year.
✔✔Contractor Marshall has been presented with a unit-priced contract from project
owner Grayson Properties. A unit-price contract is used
- For most construction contracts.
- To provide a sharing agreement.
- To provide a maximum guaranteed price.
- When the quantity of work cannot be determined in advance. - ✔✔When the quantity
of work cannot be determined in advance.
✔✔Which one of the following is true regarding joint ventures?
- All partners must participate equally in a joint venture.
- All partners are always fully responsible for the entire project.
- In a silent joint venture, the silent partner has limited responsibility.
- A limited joint venture can be formed to limit an individual's participation. - ✔✔A limited
joint venture can be formed to limit an individual's participation.
✔✔Which one of the following correctly describes those who must give notice to the
prime contractor under the Miller Act?
- Only second-tier claimants are required to give notice to the prime contractor.
- No one filing a claim under the Miller Act is required to give notice to the prime
contractor.
- Only first-tier claimants are required to give notice to the prime contractor.
- All claimants are required to give notice to the prime contractor. - ✔✔Only second-tier
claimants are required to give notice to the prime contractor.
✔✔Ewing General Contracting (EGC) entered a contract to complete a major
renovation for Ralph's Restaurant. Because Ralph's is located in a tourist town, it was
,important that the construction work be completed by May 1. The construction contract
included a provision that stated that if the job was not completed by May 1, EGC would
be assessed $500 a day for each day of delay in completing the project. These
damages to be paid by EGC are known as
- Direct damages.
- Consequential damages.
- Liquidated damages.
- Actual damages. - ✔✔Liquidated damages.
✔✔The costliest method of contract dispute resolution is typically
- Contract termination.
- Mediation.
- Arbitration.
- Litigation. - ✔✔Litigation.
✔✔A proprietor of a sole proprietorship is
- Entitled to all the profits and responsible for a portion of liabilities.
- Entitled to all the profits and is not responsible for any liability.
- Entitled to a portion of the profits and responsible for all liabilities.
- Entitled to all the profits and responsible for all liabilities. - ✔✔Entitled to all the profits
and responsible for all liabilities.
✔✔Which one of the following correctly describes a state mechanic's lien law?
- A state mechanic's lien law allows a laborer to file a lien against a contractor or
subcontractor.
- A state mechanic's lien law allows a contractor to file a lien against the state
government.
- A state mechanic's lien law allows a subcontractor to file a lien against the primary
contractor.
- A state mechanic's lien law allows a supplier of labor or materials to file a lien against
the property owner's real estate. - ✔✔A state mechanic's lien law allows a supplier of
labor or materials to file a lien against the property owner's real estate.
✔✔The construction industry most commonly uses the
- Cost-plus contract.
- Unit-price contract.
- Guaranteed maximum price contract.
- Fixed-price contract. - ✔✔Fixed-price contract.
✔✔Which one of the following correctly describes the employer-employee relationship
in the construction industry?
- The National Labor Relations Act determines all aspects of the employer-employee
relationship in the construction industry.
- The employer-employee relationship in the construction industry is the same as in
most other industries.
, - There are typically employees of different employers, some of whom may be union
members, in the construction industry.
- The employer-employee relationship in the construction industry is always influenced
by unions. - ✔✔There are typically employees of different employers, some of whom
may be union members, in the construction industry.
✔✔Which one of the following correctly describes a contractor's responsibility for
workmanship or materials after completion of a contract?
- The contractor has no responsibility for workmanship or materials after a contract is
completed.
- The contractor under implied warranty is responsible for workmanship or materials for
a reasonable time after a contract has been completed.
- The contractor, unless there is an express warranty with a time limit, is responsible
indefinitely for workmanship or materials after a contract has been completed.
- The contractor is responsible for workmanship or materials after a contract is
completed only if there is an express warranty clause. - ✔✔The contractor under
implied warranty is responsible for workmanship or materials for a reasonable time after
a contract has been completed.
✔✔If a general indemnity agreement covers joint ventures,
- The surety's rights are limited to the indemnity agreement's parties.
- The surety's rights extend to all parties to the joint venture.
- The agreement automatically extends to the surety's reinsurers.
- Each surety can rely on its general indemnity agreements. - ✔✔The surety's rights are
limited to the indemnity agreement's parties.
✔✔Lido Roofing's work is generally subject to an implied warranty. Which one of the
following statements is correct regarding an implied warranty for a roofing contractor?
- It typically applies for a 20-year period.
- It begins with the purchase of the materials.
- It does not begin until installation is completed.
- It includes coverage for excessive wear and tear. - ✔✔It does not begin until
installation is completed.
✔✔Which one of the following is correct regarding the contractor's risk in a cost-plus
contract?
- The contractor's risk in a cost-plus contract is higher than it would be in a fixed-price
contract.
- There is more risk in a cost-plus contract than in a unit-price contract.
- Cost-plus contracts expose the contractor to little or no risk because costs are
reimbursed.
- The "plus" in a cost-plus contract is a fixed amount and is not related to the
contractor's risk. - ✔✔Cost-plus contracts expose the contractor to little or no risk
because costs are reimbursed.
