Deck 10: Construction Liens, Delay and Impact Claims

Question 1

If the contractor is financially strong, and files a letter of credit with the owner stating that she will have no difficulty in paying subcontractors, she need not comply with the lien legislation trust provisions.

Answer 1

False

Question 2

Why can it be said that contractors are in the business of granting credit?

Answer 2

The payment scheme used in construction contracts is generally that the contractor does the work, the work is certified, and then payment is made. Thus, the contractor provides the goods and services before being paid and is therefore effectively granting the owner credit.

Question 3

How does one perfect a lien?

A) file a notice of lien in the land registry office
B) file a certificate of pending litigation in the land registry office
C) commence a legal action and prove the lien
D) provide the owner with notice of the lien within the time set by the applicable lien legislation

Answer 3

commence a legal action and prove the lien

Question 4

Contractor A employed two subcontractors, B and C. The total holdback retained by A is $100. B and C file liens for $60 and $240 respectively. Assuming there are no other liens on the project, the holdback amount is correct and the liens are proven, how much will C recover from the holdback?

A) $80
B) $100
C) $240
D) none of the above

Question 5

Why might a multiple holdback system result in practice even if the legislation only requires a single holdback system?

Question 6

The measured mile approach is suitable for analyzing jobs involving many short tasks all quite different in nature.

Question 7

How are critical path activities defined?

Question 8

What is the common feature of all activities on the critical path?

A) they are all dependent on each other
B) they cannot be performed at the same time
C) they have no float
D) all of the above

Question 9

Which head of damage is generally most difficult to prove?

A) labour costs
B) head office overhead
C) loss of interest on holdback
D) travel expenses