CMGT 3500 FINAL EXAM
QUESTIONS AND ANSWERS
Size and complexity of the construction industry - ANSWER-Approx $2/3 Trillion per
year
5% of GDP
Approx 5% of industrial work force
2.5 million firms
Largest single production activity
• Contrast the differences between Construction and Manufacturing industries. -
ANSWER-Custom built vs. Mass production
Quality control implications
Plant location ( fixed vs. mobile)
Changing partners ( subcontractors)
• Public Construction - ANSWER-Federal, state, county, municipal and other
jurisdictions
1/3 of all construction projects
Competitive bidding required
mostly engineered construction projects
• Compare/contrast the basic contracting methods
General Contract - ANSWER-Consists of contract drawn up between owner and
general contractor. owner usually represented by the firm that was responsible for
drawing up the contract documents. Usually either architectual design firm or or
engineering firm
• Compare/contrast the basic contracting methods
Mulitiple Prime contract - ANSWER-an arrangment by which the owner lets contracts
directly to specialty contractor for the various portions of work.
• Compare/contrast the basic contracting methods
Self Performance - ANSWER-owner provides necessary materials, labor, equipment,
and supervision. Designer plays minor role
• Compare/contrast the basic contracting methods
Design build - ANSWER-the owner lets a single contract for both the design and
construction of a project. This approach has been very popular in constructing large
industrial type projects.
Define contract - ANSWER-an agreement that affects the legal relationship between
two or more persons
A promise or set of promises for the breach of which law in some way recognizes
duty
, Elements of Contract:
Offer and Acceptance - ANSWER-Offer Made: When one person (offerer)signifies to
another person (offeree)a willingness to enter into a binding contract on certain
specified terms.
Acceptance: Creates the contract, provided it is made in the manner and at the time
specified in the offer.
Must be definite, unqualified, and unconditional, if not it is a counteroffer.
Elements of Contract: Meeting of the minds - ANSWER-Contracting parties agree on
the basic meaning and legal implications of the contract.
This is the underlying purpose of a contract.
If a meeting of the minds is not achieved, the parties do not enter into a contract.
Elements of Contract
Consideration - ANSWER-Is something of Value
The primary reason for a person to enter a contract
Both parties must obtain consideration, or the contract is not valid.
Elements of Contract:
Lawful Subject Matter - ANSWER-The Subject of the Contract must be definite and
clearly defined.
Subject Matter cannot violate any fundamental dictates of Common Law.
Cannot be contrary to public policy. (Primary relevance for public works contracts)
Elements of Contract
Competent Parties - ANSWER-Anyone, acting in good faith may enter into a binding
contract
Exceptions: minors, persons determined to be insane, Drunken persons.
If one of the contracting parties is judged incompetent, the contract is nullified.
• Define and explain estoppel. - ANSWER-A principle by which a contract becomes
binding in spite of the fact that NO formal agreement was made between the parties
concerned.
Is a result of a court action asserting that an agreement or contract exists, based
largely on the behavior or actions of the involved parties.
An implied agreement
• Define and fully explain Emiment Domain. - ANSWER-Eminent domain definition:
The power of the government to take private property and convert it into public use.
The Fifth Amendment provides that the government may only exercise this power if
they provide just compensation to the property owners.
The eminent domain process can be stopped if the proposed taking does not meet
the requirements for public necessity or public purpose. If these tests are met, the
government cannot be stopped from taking your property, but the government
cannot dictate the price it will pay, either.
• Fully Explain how highway property can be obtained from private landowners. -
ANSWER-Mutual Agreement:
QUESTIONS AND ANSWERS
Size and complexity of the construction industry - ANSWER-Approx $2/3 Trillion per
year
5% of GDP
Approx 5% of industrial work force
2.5 million firms
Largest single production activity
• Contrast the differences between Construction and Manufacturing industries. -
ANSWER-Custom built vs. Mass production
Quality control implications
Plant location ( fixed vs. mobile)
Changing partners ( subcontractors)
• Public Construction - ANSWER-Federal, state, county, municipal and other
jurisdictions
1/3 of all construction projects
Competitive bidding required
mostly engineered construction projects
• Compare/contrast the basic contracting methods
General Contract - ANSWER-Consists of contract drawn up between owner and
general contractor. owner usually represented by the firm that was responsible for
drawing up the contract documents. Usually either architectual design firm or or
engineering firm
• Compare/contrast the basic contracting methods
Mulitiple Prime contract - ANSWER-an arrangment by which the owner lets contracts
directly to specialty contractor for the various portions of work.
• Compare/contrast the basic contracting methods
Self Performance - ANSWER-owner provides necessary materials, labor, equipment,
and supervision. Designer plays minor role
• Compare/contrast the basic contracting methods
Design build - ANSWER-the owner lets a single contract for both the design and
construction of a project. This approach has been very popular in constructing large
industrial type projects.
Define contract - ANSWER-an agreement that affects the legal relationship between
two or more persons
A promise or set of promises for the breach of which law in some way recognizes
duty
, Elements of Contract:
Offer and Acceptance - ANSWER-Offer Made: When one person (offerer)signifies to
another person (offeree)a willingness to enter into a binding contract on certain
specified terms.
Acceptance: Creates the contract, provided it is made in the manner and at the time
specified in the offer.
Must be definite, unqualified, and unconditional, if not it is a counteroffer.
Elements of Contract: Meeting of the minds - ANSWER-Contracting parties agree on
the basic meaning and legal implications of the contract.
This is the underlying purpose of a contract.
If a meeting of the minds is not achieved, the parties do not enter into a contract.
Elements of Contract
Consideration - ANSWER-Is something of Value
The primary reason for a person to enter a contract
Both parties must obtain consideration, or the contract is not valid.
Elements of Contract:
Lawful Subject Matter - ANSWER-The Subject of the Contract must be definite and
clearly defined.
Subject Matter cannot violate any fundamental dictates of Common Law.
Cannot be contrary to public policy. (Primary relevance for public works contracts)
Elements of Contract
Competent Parties - ANSWER-Anyone, acting in good faith may enter into a binding
contract
Exceptions: minors, persons determined to be insane, Drunken persons.
If one of the contracting parties is judged incompetent, the contract is nullified.
• Define and explain estoppel. - ANSWER-A principle by which a contract becomes
binding in spite of the fact that NO formal agreement was made between the parties
concerned.
Is a result of a court action asserting that an agreement or contract exists, based
largely on the behavior or actions of the involved parties.
An implied agreement
• Define and fully explain Emiment Domain. - ANSWER-Eminent domain definition:
The power of the government to take private property and convert it into public use.
The Fifth Amendment provides that the government may only exercise this power if
they provide just compensation to the property owners.
The eminent domain process can be stopped if the proposed taking does not meet
the requirements for public necessity or public purpose. If these tests are met, the
government cannot be stopped from taking your property, but the government
cannot dictate the price it will pay, either.
• Fully Explain how highway property can be obtained from private landowners. -
ANSWER-Mutual Agreement:
