1
CM 4211 MIDTERM EXAM
QUESTIONS WITH VERIFIED
SOLUTIONS 2026/2027
What is the next step in the construction contract process after the contract has
been drafted and reviewed by all parties? - correct-answer - Negotiations
There is no difference between lump sum and fixed price. - correct-answer - True
What is a Guaranteed Maximum Price contract? - correct-answer - The maximum
amount the owner will have to pay the contractor is capped and is not to exceed
Safety awards for no injuries, fast-tracking, and zero-quality defects are possible
examples of incentives in a unit price contract. - correct-answer - False
What does contract termination mean? - correct-answer - When either party can
legally terminate the contract and any penalties that may apply to the decision to
terminate
, 2
Of the three contracts LS, LSTK, and GMP, which once affords the most protection
financially and allows the owner to secure investors and loans? - correct-answer -
GMP
What are examples of construction contract clauses for escalation? - correct-
answer - (A.Fuel and gas
B.Construction materials and equipment
C.Steel)
All of these answers
Who is responsible for selecting and managing the sub-contractor on a project? -
correct-answer - Prime/General Contractor
The right to subcontract any project work has to be outlined by which of the
following. Select all that apply. - correct-answer - The contract
The advantage of cost plus is that the Prime Contractor will incur a profit. -
correct-answer - True
Select the best definition for Owner. - correct-answer - The individual or company
hiring the general contractor and entering into the contract to have construction
work done
Negotiating a contract with no compromise can affect which of the following. -
correct-answer - Delay the start date
, 3
A construction contract is an agreement that is between the OWNER and which of
the following. - correct-answer - Prime/General Contractor
The Prime Contractor can terminate its contract when the owner is in breach of
contract or acting in bad faith. - correct-answer - True
You can have a multiple-contract method under one project. - correct-answer -
True
What does Indemnification mean? - correct-answer - The responsibility of the
contractor for any damages or loss incurred by the owner due to the work of the
contractor
What are examples of contract documents? - correct-answer - (A. Scope of Work
B.Technical specifications
C.Blueprints
D.Design drawings)
All of these answers
The advantages of Time and Material contracts consist of which of the following.
Select all that apply. - correct-answer - (a.Helps budget overall costs
b.Reduce risk to Prime Contractor of fluctuating material and labor cost
c.Reduces cost-cutting methods by the owner
d.Incurs a known profit to the Prime Contractor)
CM 4211 MIDTERM EXAM
QUESTIONS WITH VERIFIED
SOLUTIONS 2026/2027
What is the next step in the construction contract process after the contract has
been drafted and reviewed by all parties? - correct-answer - Negotiations
There is no difference between lump sum and fixed price. - correct-answer - True
What is a Guaranteed Maximum Price contract? - correct-answer - The maximum
amount the owner will have to pay the contractor is capped and is not to exceed
Safety awards for no injuries, fast-tracking, and zero-quality defects are possible
examples of incentives in a unit price contract. - correct-answer - False
What does contract termination mean? - correct-answer - When either party can
legally terminate the contract and any penalties that may apply to the decision to
terminate
, 2
Of the three contracts LS, LSTK, and GMP, which once affords the most protection
financially and allows the owner to secure investors and loans? - correct-answer -
GMP
What are examples of construction contract clauses for escalation? - correct-
answer - (A.Fuel and gas
B.Construction materials and equipment
C.Steel)
All of these answers
Who is responsible for selecting and managing the sub-contractor on a project? -
correct-answer - Prime/General Contractor
The right to subcontract any project work has to be outlined by which of the
following. Select all that apply. - correct-answer - The contract
The advantage of cost plus is that the Prime Contractor will incur a profit. -
correct-answer - True
Select the best definition for Owner. - correct-answer - The individual or company
hiring the general contractor and entering into the contract to have construction
work done
Negotiating a contract with no compromise can affect which of the following. -
correct-answer - Delay the start date
, 3
A construction contract is an agreement that is between the OWNER and which of
the following. - correct-answer - Prime/General Contractor
The Prime Contractor can terminate its contract when the owner is in breach of
contract or acting in bad faith. - correct-answer - True
You can have a multiple-contract method under one project. - correct-answer -
True
What does Indemnification mean? - correct-answer - The responsibility of the
contractor for any damages or loss incurred by the owner due to the work of the
contractor
What are examples of contract documents? - correct-answer - (A. Scope of Work
B.Technical specifications
C.Blueprints
D.Design drawings)
All of these answers
The advantages of Time and Material contracts consist of which of the following.
Select all that apply. - correct-answer - (a.Helps budget overall costs
b.Reduce risk to Prime Contractor of fluctuating material and labor cost
c.Reduces cost-cutting methods by the owner
d.Incurs a known profit to the Prime Contractor)
