CON 1400V: Construction Contracts & Project Administration
Actual Exam 2026/2027: Complete Exam-Style Questions with
Detailed Rationales | 100% Verified | Pass Guaranteed – A+
Graded
Midterm Examination
Time Allowed: 75 Minutes | Total Questions: 50
Domain 1: Contract Types & Legal Principles
1.
Under a lump-sum (fixed-price) contract, which party bears the greatest risk of cost
overruns?
A) The owner, because they must pay for all unforeseen conditions
B) The contractor, because the price is agreed upon before construction begins ✓
C) The architect, because they must redesign at no additional fee
D) The surety, because they guarantee all project costs
Correct Answer: B) The contractor, because the price is agreed upon before
construction begins
Rationale: In a fixed-price contract, the contractor assumes the risk that actual costs
may exceed the agreed-upon lump sum, making cost control critical to profitability.
2.
Which of the following best describes a cost-plus contract with a guaranteed maximum
price (GMP)?
A) The contractor is reimbursed for all costs without any cap
B) The owner pays a fixed fee regardless of project costs
C) The contractor is reimbursed for actual costs plus fee, but the total is capped at the
GMP ✓
D) The owner and contractor share all savings equally
Correct Answer: C) The contractor is reimbursed for actual costs plus fee, but the total
is capped at the GMP
,Rationale: A cost-plus contract with GMP provides cost transparency to the owner while
protecting them from unlimited cost exposure, with the contractor bearing risk above
the GMP.
3.
Under AIA Document A201-2017 General Conditions, a written change order is required
for:
A) Minor adjustments to field dimensions that do not affect cost or time
B) Changes in the work that affect the contract sum or contract time ✓
C) Substitution of equal materials approved by the architect
D) Routine maintenance performed by the contractor during construction
Correct Answer: B) Changes in the work that affect the contract sum or contract time
Rationale: AIA A201 Section 7.2 requires a written change order for modifications
affecting contract sum or time, while minor adjustments not impacting either may be
handled through field orders.
4.
A mechanic's lien is best described as:
A) A voluntary security interest granted by the property owner
B) An involuntary security interest that encumbers real property to secure payment for
labor or materials ✓
C) A claim filed exclusively against public projects
D) A federal tax lien placed on commercial construction projects
Correct Answer: B) An involuntary security interest that encumbers real property to
secure payment for labor or materials
Rationale: Mechanic's liens are statutory rights that allow contractors, subcontractors,
and suppliers to place a claim against property when they have not been paid for work
performed or materials furnished.
5.
In a Time and Materials (T&M) contract, the contractor is typically paid:
A) A predetermined lump sum regardless of actual costs incurred
B) Actual costs for labor and materials plus an agreed-upon markup or fee ✓
C) Only for materials, with labor considered part of overhead
, D) Based on unit prices established before work begins
Correct Answer: B) Actual costs for labor and materials plus an agreed-upon markup or
fee
Rationale: T&M contracts reimburse the contractor for actual direct costs plus an
agreed percentage or fixed fee, making them suitable when the scope of work is not
well defined.
6.
Under the Spearin Doctrine, which statement is most accurate?
A) The contractor is strictly liable for all defects regardless of design adequacy
B) The owner implicitly warrants the accuracy of plans and specifications provided to
the contractor ✓
C) The architect assumes all liability for construction means and methods
D) The surety is responsible for design errors and omissions
Correct Answer: B) The owner implicitly warrants the accuracy of plans and
specifications provided to the contractor
Rationale: Established in United States v. Spearin (1918), this doctrine holds that when
the owner provides detailed plans and specifications, there is an implied warranty of
their sufficiency, and the contractor is not liable for defects resulting from design errors.
7.
Which of the following is a distinguishing feature of a Design-Build contract compared
to traditional Design-Bid-Build?
A) The owner contracts separately with a designer and a contractor
B) A single entity is responsible for both design and construction under one contract ✓
C) Construction cannot begin until 100% of design documents are complete
D) The architect serves as the owner's representative throughout construction
Correct Answer: B) A single entity is responsible for both design and construction under
one contract
Rationale: Design-Build integrates design and construction services under a single
contract, promoting collaboration, reducing change orders, and often accelerating
project delivery through overlapping phases.
8.
Actual Exam 2026/2027: Complete Exam-Style Questions with
Detailed Rationales | 100% Verified | Pass Guaranteed – A+
Graded
Midterm Examination
Time Allowed: 75 Minutes | Total Questions: 50
Domain 1: Contract Types & Legal Principles
1.
Under a lump-sum (fixed-price) contract, which party bears the greatest risk of cost
overruns?
A) The owner, because they must pay for all unforeseen conditions
B) The contractor, because the price is agreed upon before construction begins ✓
C) The architect, because they must redesign at no additional fee
D) The surety, because they guarantee all project costs
Correct Answer: B) The contractor, because the price is agreed upon before
construction begins
Rationale: In a fixed-price contract, the contractor assumes the risk that actual costs
may exceed the agreed-upon lump sum, making cost control critical to profitability.
2.
Which of the following best describes a cost-plus contract with a guaranteed maximum
price (GMP)?
A) The contractor is reimbursed for all costs without any cap
B) The owner pays a fixed fee regardless of project costs
C) The contractor is reimbursed for actual costs plus fee, but the total is capped at the
GMP ✓
D) The owner and contractor share all savings equally
Correct Answer: C) The contractor is reimbursed for actual costs plus fee, but the total
is capped at the GMP
,Rationale: A cost-plus contract with GMP provides cost transparency to the owner while
protecting them from unlimited cost exposure, with the contractor bearing risk above
the GMP.
3.
Under AIA Document A201-2017 General Conditions, a written change order is required
for:
A) Minor adjustments to field dimensions that do not affect cost or time
B) Changes in the work that affect the contract sum or contract time ✓
C) Substitution of equal materials approved by the architect
D) Routine maintenance performed by the contractor during construction
Correct Answer: B) Changes in the work that affect the contract sum or contract time
Rationale: AIA A201 Section 7.2 requires a written change order for modifications
affecting contract sum or time, while minor adjustments not impacting either may be
handled through field orders.
4.
A mechanic's lien is best described as:
A) A voluntary security interest granted by the property owner
B) An involuntary security interest that encumbers real property to secure payment for
labor or materials ✓
C) A claim filed exclusively against public projects
D) A federal tax lien placed on commercial construction projects
Correct Answer: B) An involuntary security interest that encumbers real property to
secure payment for labor or materials
Rationale: Mechanic's liens are statutory rights that allow contractors, subcontractors,
and suppliers to place a claim against property when they have not been paid for work
performed or materials furnished.
5.
In a Time and Materials (T&M) contract, the contractor is typically paid:
A) A predetermined lump sum regardless of actual costs incurred
B) Actual costs for labor and materials plus an agreed-upon markup or fee ✓
C) Only for materials, with labor considered part of overhead
, D) Based on unit prices established before work begins
Correct Answer: B) Actual costs for labor and materials plus an agreed-upon markup or
fee
Rationale: T&M contracts reimburse the contractor for actual direct costs plus an
agreed percentage or fixed fee, making them suitable when the scope of work is not
well defined.
6.
Under the Spearin Doctrine, which statement is most accurate?
A) The contractor is strictly liable for all defects regardless of design adequacy
B) The owner implicitly warrants the accuracy of plans and specifications provided to
the contractor ✓
C) The architect assumes all liability for construction means and methods
D) The surety is responsible for design errors and omissions
Correct Answer: B) The owner implicitly warrants the accuracy of plans and
specifications provided to the contractor
Rationale: Established in United States v. Spearin (1918), this doctrine holds that when
the owner provides detailed plans and specifications, there is an implied warranty of
their sufficiency, and the contractor is not liable for defects resulting from design errors.
7.
Which of the following is a distinguishing feature of a Design-Build contract compared
to traditional Design-Bid-Build?
A) The owner contracts separately with a designer and a contractor
B) A single entity is responsible for both design and construction under one contract ✓
C) Construction cannot begin until 100% of design documents are complete
D) The architect serves as the owner's representative throughout construction
Correct Answer: B) A single entity is responsible for both design and construction under
one contract
Rationale: Design-Build integrates design and construction services under a single
contract, promoting collaboration, reducing change orders, and often accelerating
project delivery through overlapping phases.
8.
