Construction Contracting || Already Passed.
Plans correct answers pictorial representations of the project
Specifications correct answers describe quality of work, materials to be used, and installation
procedures
Agreement correct answers names and addresses of parties involved in the contract, dates for
project beginning and completion, price and payment, list of other contract documents
General conditions correct answers things that are the same in every contract, such as how
changes in work or disputes are to be handled
Special conditions correct answers project-specific additions or changes to the general conditions
Warranty correct answers a promise that work will meet certain standards, or be corrected
Change orders correct answers modifications to the contract after it is signed
Addition correct answers modification to the contract before it is signed
Draw schedule correct answers describes when payments are due
Allowance schedule correct answers identifies items for which exact cost has not been
determined
Addendum correct answers modifications to the contract after it is signed
Exclusions correct answers Items specifically listed as not being covered in the scope of work
allowance correct answers money set aside in a contract for items whose cost has not been
determined
arbitration correct answers disputes are submitted to a neutral third party or panel for a final
decision
breach of contract correct answers either party to a contract does not meet their contractual
obligations
change order correct answers alteration in scope of work after construction has begun (normally
requested by the homeowner)
escrow correct answers an account into which funds are deposited in advance, to assure they will
be available when payment is due
,liquidated damages correct answers money paid to cover the losses of the non-breaching party, if
a breach of contract occurs
mechanic's lien correct answers a hold placed on property until debts are paid
mediation correct answers disputes are negotiated with the aid of a neutral third party
punch list correct answers minor work still to be done after the project reaches substantial
conclusion
retainage correct answers a percent of the contract price withheld by the owner until completion
of the project
statute of limitations correct answers period of time during which a lawsuit can be filed
statute of repose correct answers absolute time limit on bringing legal action
substantial completion correct answers the date when the CO is issued, or the project can be used
by the client
The owner of the house you are building has decided to hire an individual to install a whole-
house sound and intercom system. This person will be working on your site both before the
drywall has been installed and after the walls have been painted. What rights does the Long-
Form Fixed Price contract give you regarding this work? correct answers Section III C 2 gives
you the right to supervise, coordinate (schedule) and charge profit and overhead on the work of
any owner-hired contractor who is working on the site while you are.
Section III F 1 gives you the right to supervise the work of any owner-hired contractor who
works on the site during the time of your contract (until you have completed the job). It also
specifies that you will charge profit and overhead on this work, on a percentage basis.
Items listed in the "Standard Exclusions" clause in the example Fixed Price contracts apply to all
projects, and should never be removed. You can use the "Project Specific Exclusions" clause to
add any other exclusions that might apply on a specific project. correct answers False
Which of the following is a risk of providing too detailed a scope of work? correct answers The
owner may demand credit if the actual cost for an item turns out to be (or they perceive it to be)
lower than the quoted price.
The owner may attempt to negotiate for a lower price, effectively turning the contract into a
Time and Materials agreement.
What section of the Fixed Price contracts gives the contractor legal right to refuse responsibility
for work they had no way of knowing about or that was not in the original contract? correct
answers III A - Exclusions
III C 1 - Concealed Conditions
, What paragraph and words in the Fixed Price Contract tell you that the document satisfies the
legal conditions that define a contract, i.e., Offer, Agreement, and Consideration? correct
answers Consideration, Section I Parties: has the phase,"In consideration of the mutual promises
herein, Contractor agrees to perform the following work, subject to the terms and conditions
below." which means that there is a "bargained-for exchange" and the conditions of Offer,
Agreement and Consideration have been met for a valid contract.
Which of the following Standard Exclusions might be important for a remodeling project that
involved a kitchen/living area remodel leading to a more open floor plan for the home? House
footprint will not change. correct answers Testing, removal and disposal of any materials
containing asbestos (or any other hazardous material as defined by the EPA).
Custom milling of any wood for use in project.
Moving owner's property around the site
Rerouting/removal of vents, pipes, ducts, . . . which may be discovered in the removal of walls or
the cutting of openings in walls.
Removal and replacement of materials with existing rot or insect infestation.
In order to place concrete for the monolithic slab for a room addition in the rear of the client's
home, it was necessary for the concrete truck to drive over a portion of the driveway. After the
concrete truck departed, the homeowner noticed a crack in the driveway that had not been there
previously. the homeowner then demanded that you replace the damaged section of the
driveway.
Using the example Fixed Price Contracts, are you or are you not responsible for repairing the
driveway, and why or why not? correct answers You would not be responsible because Section
A II STANDARD EXCLUSIONS includes this phrase: "Repair of damage to roadways,
driveways, or sidewalks that could occur when construction equipment and vehicles are being
used in the normal course of construction," which would release the contractor from
responsibility of fixing the driveway damage caused by the concrete truck. The homeowner
would be responsible.
Which of the following are included in the Long Form Fixed Price contract example, but not
found in the Short-Form contract? correct answers Listing by the owner of anyone who can
authorize change orders.
Language requiring the owner to obtain Builders Risk (Course of Construction) insurance
coverage.
The "Hold back from Final Payment for Punchlist Work" clause in the Long-Form Fixed Price
Contract helps to assure the homeowner that all punch list work will be completed in a timely
manner. correct answers True
Plans correct answers pictorial representations of the project
Specifications correct answers describe quality of work, materials to be used, and installation
procedures
Agreement correct answers names and addresses of parties involved in the contract, dates for
project beginning and completion, price and payment, list of other contract documents
General conditions correct answers things that are the same in every contract, such as how
changes in work or disputes are to be handled
Special conditions correct answers project-specific additions or changes to the general conditions
Warranty correct answers a promise that work will meet certain standards, or be corrected
Change orders correct answers modifications to the contract after it is signed
Addition correct answers modification to the contract before it is signed
Draw schedule correct answers describes when payments are due
Allowance schedule correct answers identifies items for which exact cost has not been
determined
Addendum correct answers modifications to the contract after it is signed
Exclusions correct answers Items specifically listed as not being covered in the scope of work
allowance correct answers money set aside in a contract for items whose cost has not been
determined
arbitration correct answers disputes are submitted to a neutral third party or panel for a final
decision
breach of contract correct answers either party to a contract does not meet their contractual
obligations
change order correct answers alteration in scope of work after construction has begun (normally
requested by the homeowner)
escrow correct answers an account into which funds are deposited in advance, to assure they will
be available when payment is due
,liquidated damages correct answers money paid to cover the losses of the non-breaching party, if
a breach of contract occurs
mechanic's lien correct answers a hold placed on property until debts are paid
mediation correct answers disputes are negotiated with the aid of a neutral third party
punch list correct answers minor work still to be done after the project reaches substantial
conclusion
retainage correct answers a percent of the contract price withheld by the owner until completion
of the project
statute of limitations correct answers period of time during which a lawsuit can be filed
statute of repose correct answers absolute time limit on bringing legal action
substantial completion correct answers the date when the CO is issued, or the project can be used
by the client
The owner of the house you are building has decided to hire an individual to install a whole-
house sound and intercom system. This person will be working on your site both before the
drywall has been installed and after the walls have been painted. What rights does the Long-
Form Fixed Price contract give you regarding this work? correct answers Section III C 2 gives
you the right to supervise, coordinate (schedule) and charge profit and overhead on the work of
any owner-hired contractor who is working on the site while you are.
Section III F 1 gives you the right to supervise the work of any owner-hired contractor who
works on the site during the time of your contract (until you have completed the job). It also
specifies that you will charge profit and overhead on this work, on a percentage basis.
Items listed in the "Standard Exclusions" clause in the example Fixed Price contracts apply to all
projects, and should never be removed. You can use the "Project Specific Exclusions" clause to
add any other exclusions that might apply on a specific project. correct answers False
Which of the following is a risk of providing too detailed a scope of work? correct answers The
owner may demand credit if the actual cost for an item turns out to be (or they perceive it to be)
lower than the quoted price.
The owner may attempt to negotiate for a lower price, effectively turning the contract into a
Time and Materials agreement.
What section of the Fixed Price contracts gives the contractor legal right to refuse responsibility
for work they had no way of knowing about or that was not in the original contract? correct
answers III A - Exclusions
III C 1 - Concealed Conditions
, What paragraph and words in the Fixed Price Contract tell you that the document satisfies the
legal conditions that define a contract, i.e., Offer, Agreement, and Consideration? correct
answers Consideration, Section I Parties: has the phase,"In consideration of the mutual promises
herein, Contractor agrees to perform the following work, subject to the terms and conditions
below." which means that there is a "bargained-for exchange" and the conditions of Offer,
Agreement and Consideration have been met for a valid contract.
Which of the following Standard Exclusions might be important for a remodeling project that
involved a kitchen/living area remodel leading to a more open floor plan for the home? House
footprint will not change. correct answers Testing, removal and disposal of any materials
containing asbestos (or any other hazardous material as defined by the EPA).
Custom milling of any wood for use in project.
Moving owner's property around the site
Rerouting/removal of vents, pipes, ducts, . . . which may be discovered in the removal of walls or
the cutting of openings in walls.
Removal and replacement of materials with existing rot or insect infestation.
In order to place concrete for the monolithic slab for a room addition in the rear of the client's
home, it was necessary for the concrete truck to drive over a portion of the driveway. After the
concrete truck departed, the homeowner noticed a crack in the driveway that had not been there
previously. the homeowner then demanded that you replace the damaged section of the
driveway.
Using the example Fixed Price Contracts, are you or are you not responsible for repairing the
driveway, and why or why not? correct answers You would not be responsible because Section
A II STANDARD EXCLUSIONS includes this phrase: "Repair of damage to roadways,
driveways, or sidewalks that could occur when construction equipment and vehicles are being
used in the normal course of construction," which would release the contractor from
responsibility of fixing the driveway damage caused by the concrete truck. The homeowner
would be responsible.
Which of the following are included in the Long Form Fixed Price contract example, but not
found in the Short-Form contract? correct answers Listing by the owner of anyone who can
authorize change orders.
Language requiring the owner to obtain Builders Risk (Course of Construction) insurance
coverage.
The "Hold back from Final Payment for Punchlist Work" clause in the Long-Form Fixed Price
Contract helps to assure the homeowner that all punch list work will be completed in a timely
manner. correct answers True
