TEC 226 "CONST. CONTRACTS & LAW" EXAM 2
QUESTIONS AND ACCURATE ANSWERS
When properties are divided into classifications this process is called? - Answers -
Zoning
Who do Mechanics Liens protect? - Answers - Parties who directly improve real estate
Best Way for an Owner to avoid a Lien claim - Answers - Obtain services from a
competent and reputable contractor
What safeguards protect property owners from unfair Imminent Doman use? - Answers
- 1. Can only be taken b Due Process of Law
2. Fair Compensation must be given
What document does a Contractor turn in so an Owner knows the pay application is
Lien Free? - Answers - Final Lien Waiver
4 Types of Payment Processes? - Answers - 1. Unit Price
2. Cost-Plus
3. Lump-Sum
4. T&M
Advantages & Disadvantages of Unit Price / T&M? - Answers - Advantages:
- Contract is specific with pricing
- Used when quantities can't be known till construction is complete
Disadvantages:
- Cost of project in unknown until completion
- Additional people needed to count quantities
Advantages & Disadvantages of Cost-Plus? - Answers - Advantages:
- Used when scope is limited & cost is difficult to estimate
Disadvantages:
- Owner must maintain staff to review Contractors reimbursable costs
- Less idea of cost of project
Advantages & Disadvantages of Lump Sum? - Answers - Advantages:
- Project will be produced for a specific sum
Disadvantages:
- Construction is delayed while plans are being completed
- Errors in plans will be costly (Extras)
What is the contractor paid for if it is a Cost-Plus project? - Answers - Direct
expenditures + Allowance for profit & Overhead (Contract Defines what is approved)
QUESTIONS AND ACCURATE ANSWERS
When properties are divided into classifications this process is called? - Answers -
Zoning
Who do Mechanics Liens protect? - Answers - Parties who directly improve real estate
Best Way for an Owner to avoid a Lien claim - Answers - Obtain services from a
competent and reputable contractor
What safeguards protect property owners from unfair Imminent Doman use? - Answers
- 1. Can only be taken b Due Process of Law
2. Fair Compensation must be given
What document does a Contractor turn in so an Owner knows the pay application is
Lien Free? - Answers - Final Lien Waiver
4 Types of Payment Processes? - Answers - 1. Unit Price
2. Cost-Plus
3. Lump-Sum
4. T&M
Advantages & Disadvantages of Unit Price / T&M? - Answers - Advantages:
- Contract is specific with pricing
- Used when quantities can't be known till construction is complete
Disadvantages:
- Cost of project in unknown until completion
- Additional people needed to count quantities
Advantages & Disadvantages of Cost-Plus? - Answers - Advantages:
- Used when scope is limited & cost is difficult to estimate
Disadvantages:
- Owner must maintain staff to review Contractors reimbursable costs
- Less idea of cost of project
Advantages & Disadvantages of Lump Sum? - Answers - Advantages:
- Project will be produced for a specific sum
Disadvantages:
- Construction is delayed while plans are being completed
- Errors in plans will be costly (Extras)
What is the contractor paid for if it is a Cost-Plus project? - Answers - Direct
expenditures + Allowance for profit & Overhead (Contract Defines what is approved)
