Deck 4: The Basics of Construction Contracts

Question 1

A promise constitutes a Contract

Answer 1

False

Question 2

Prior understandings to remain valid between two parties

A) should be made a part of the Contract
B) are important to remember
C) depend on how well each party trusts the other
D) cannot be made a part of the contract

Answer 2

A

Question 3

Mistakes made preparing a bid proposal

A) are too bad
B) cannot be a reason to withdraw an offer
C) can be reason to withdraw an offer so long as the mistake was not judgmental
D) are costly

Answer 3

C

Question 4

The most common form of payment is

A) Time and Material
B) lump sum
C) cost plus a fee
D) not to exceed

Question 5

Front-end loading costs on a project

A) is no longer done since the 2004 law banned it
B) can cause disruption of work
C) requires the Contract Administrator to be extra careful regarding costs and profits
D) Should be done whenever possible to maximize profits

Question 6

A Subcontractor often will not be paid until the General Contractor is paid based on

A) Pay when Paid clause
B) Pay if Paid clause
C) an architectural error
D) A and B

Question 7

Unit cost payments are

A) often used for highway work
B) never a good way to get a fair price
C) used when the Architects do not know what they want
D) another form of Time and Material billing

Question 8

A condition precedent

A) requires certain conditions be met before other conditions are required
B) is not legal in Contracts
C) should be avoided since it will usually delay payment
D) requires an attorney to mitigate the issue

Question 9

A change order

A) affects cost
B) affects time
C) can affect both cost and time
D) can affect either cost and/or time

Question 10

Estoppel

A) is a great way to force an Owner to pay promptly
B) requires previous acts to have set a pattern
C) is good for the Owner more than the Contractor
D) is one way to improve slow payment

Question 11

quid pro quo

A) is no longer used in contracts
B) stands for money (quid) for whom-meaning who should be paid
C) means this for that
D) is a way to challenge slow payment

Question 12

There is no Contract

A) to commit an illegal act
B) between underage persons
C) for mentally impaired individuals
D) all of these

Question 13

A contract begins with a promise and

A) money exchanged
B) two signatures
C) one signature
D) an acceptance

Question 14

There cannot be a Contract to commit an illegal act

Question 15

Oral agreements prior to a Contract are important to understand the Contract once the Contract is signed

Question 16

The parties to a Contract have the implied duty to cooperate

Question 17

Lump sum is a common form of payment in construction

Question 18

Front-end loading a payment structure can have significant consequences toward the end of the project

Question 19

Pay when Paid clauses and Pay if Paid clauses are intended to protect the Contractor's cash flow

Question 20

Time and Material payments are based on the actual costs plus a mark-up for overhead and profit

Question 21

Unit Cost Contracts for the most part are restricted to Heavy and Highway work as well as itemized units within lump Sum contracting for Building Contractors

Question 22

To seek relief from a Performance Specification, one would have to prove ""impossibility""

Question 23

A Contract can never be voided simply because one party could not have know the scope required

Question 24

Retainage

A) is always held by the Owner
B) is usually held back as a percentage of the invoicing
C) will not be paid until final acceptance
D) is illegal in several states and on Federal work involving military projects