CON 496: Construction Contract Administration With
Correct Answers
1. What is the "Eichleay Formula" used to calculate?
A) The amount of concrete needed for a foundation.
B) Home office overhead damages during a project delay.
C) The interest rate on late payments.
D) The structural load-bearing capacity of a beam.
Correct Answer: B. This legal formula helps contractors recover unabsorbed home
office overhead when a project is suspended or delayed by the owner.
2. Which party typically owns the "Float" in a project schedule?
A) The Contractor exclusively.
B) The Owner exclusively.
C) The party that uses it first, unless the contract states otherwise.
D) The Architect.
Correct Answer: C. Most modern contracts specify that float is a shared resource for
the benefit of the project.
3. What is a "Cardinal Change"?
A) A change involving the color red.
B) A change so fundamental that it is considered outside the original scope of the
contract.
C) A change ordered by the lead architect.
D) A minor adjustment to the electrical plan.
Correct Answer: B. A cardinal change can be considered a breach of contract by the
owner because it forces the contractor to perform work they didn't bargain for.
4. What does the "No Damage for Delay" clause mean?
A) The contractor cannot be sued for delays.
B) The contractor's only remedy for an owner-caused delay is a time extension, not
money.
C) The project cannot be delayed for any reason.
D) Weather delays are not allowed.
Correct Answer: B. While common, many states limit the enforceability of these
clauses if the owner acted in bad faith.
5. What is "Quasi-Contract" (Contract implied-in-law)?
, A) A contract signed by a ghostwriter.
B) An obligation imposed by law to prevent unjust enrichment when no formal
contract exists.
C) A verbal agreement between friends.
D) A contract that is only half-finished.
Correct Answer: B. It allows a party to recover the value of work performed even if a
written contract is missing or void.
6. What is "Course of Performance"?
A) The speed at which a contractor works.
B) The way parties have acted during the current contract, used to interpret
ambiguous terms.
C) A training class for managers.
D) The path of the heavy machinery on site.
Correct Answer: B. If an owner consistently accepted a certain material, they may be
legally barred from rejecting it later.
7. What is "Indemnity" in a construction context?
A) A type of tax.
B) A requirement to compensate another party for loss or damage.
C) A bonus for finishing early.
D) The right to fire a subcontractor.
Correct Answer: B. Contractors often indemnify owners against lawsuits resulting
from on-site accidents.
8. What is the "Mirror Image Rule" in contract law?
A) The drawings must look like the building.
B) An acceptance of an offer must exactly match the terms of the offer.
C) Both parties must have the same insurance.
D) The contractor must provide two copies of every report.
Correct Answer: B. If the acceptance changes a term, it is technically a counter-offer,
not an acceptance.
9. What is "Substantial Performance"?
A) Doing a great job on the project.
B) When a contractor has performed the work well enough that only minor defects
remain.
, C) When the owner pays half the bill.
D) When the contractor buys all the materials.
Correct Answer: B. It prevents an owner from refusing to pay the entire contract
sum over a few missing doorknobs.
10. What is a "Flow-Through" clause?
A) A plumbing requirement.
B) A clause that passes the obligations of the prime contract down to the
subcontractors.
C) A way to move water off-site.
D) An automatic payment system.
Correct Answer: B. It ensures the subcontractor is bound by the same safety and
quality standards as the general contractor.
11. What is "Proprietary Data"?
A) Information that is publicly available.
B) Confidential information or trade secrets belonging to a company.
C) Data about the property taxes.
D) The contractor's phone list.
Correct Answer: B. Contracts usually have clauses to protect this information during
the design phase.
12. What is "Anticipatory Repudiation"?
A) Predicting a project will be successful.
B) When one party clearly states or demonstrates they will not fulfill their contract
obligations before the deadline.
C) A request for a change order.
D) Signing the contract early.
Correct Answer: B. The non-breaching party can sue immediately rather than
waiting for the actual deadline to pass.
13. What is a "Miller Act" bond?
A) A bond for a beer company.
B) A federal requirement for payment and performance bonds on federal
construction projects.
C) A bond for small residential jobs.
D) Insurance for a truck fleet.
Correct Answers
1. What is the "Eichleay Formula" used to calculate?
A) The amount of concrete needed for a foundation.
B) Home office overhead damages during a project delay.
C) The interest rate on late payments.
D) The structural load-bearing capacity of a beam.
Correct Answer: B. This legal formula helps contractors recover unabsorbed home
office overhead when a project is suspended or delayed by the owner.
2. Which party typically owns the "Float" in a project schedule?
A) The Contractor exclusively.
B) The Owner exclusively.
C) The party that uses it first, unless the contract states otherwise.
D) The Architect.
Correct Answer: C. Most modern contracts specify that float is a shared resource for
the benefit of the project.
3. What is a "Cardinal Change"?
A) A change involving the color red.
B) A change so fundamental that it is considered outside the original scope of the
contract.
C) A change ordered by the lead architect.
D) A minor adjustment to the electrical plan.
Correct Answer: B. A cardinal change can be considered a breach of contract by the
owner because it forces the contractor to perform work they didn't bargain for.
4. What does the "No Damage for Delay" clause mean?
A) The contractor cannot be sued for delays.
B) The contractor's only remedy for an owner-caused delay is a time extension, not
money.
C) The project cannot be delayed for any reason.
D) Weather delays are not allowed.
Correct Answer: B. While common, many states limit the enforceability of these
clauses if the owner acted in bad faith.
5. What is "Quasi-Contract" (Contract implied-in-law)?
, A) A contract signed by a ghostwriter.
B) An obligation imposed by law to prevent unjust enrichment when no formal
contract exists.
C) A verbal agreement between friends.
D) A contract that is only half-finished.
Correct Answer: B. It allows a party to recover the value of work performed even if a
written contract is missing or void.
6. What is "Course of Performance"?
A) The speed at which a contractor works.
B) The way parties have acted during the current contract, used to interpret
ambiguous terms.
C) A training class for managers.
D) The path of the heavy machinery on site.
Correct Answer: B. If an owner consistently accepted a certain material, they may be
legally barred from rejecting it later.
7. What is "Indemnity" in a construction context?
A) A type of tax.
B) A requirement to compensate another party for loss or damage.
C) A bonus for finishing early.
D) The right to fire a subcontractor.
Correct Answer: B. Contractors often indemnify owners against lawsuits resulting
from on-site accidents.
8. What is the "Mirror Image Rule" in contract law?
A) The drawings must look like the building.
B) An acceptance of an offer must exactly match the terms of the offer.
C) Both parties must have the same insurance.
D) The contractor must provide two copies of every report.
Correct Answer: B. If the acceptance changes a term, it is technically a counter-offer,
not an acceptance.
9. What is "Substantial Performance"?
A) Doing a great job on the project.
B) When a contractor has performed the work well enough that only minor defects
remain.
, C) When the owner pays half the bill.
D) When the contractor buys all the materials.
Correct Answer: B. It prevents an owner from refusing to pay the entire contract
sum over a few missing doorknobs.
10. What is a "Flow-Through" clause?
A) A plumbing requirement.
B) A clause that passes the obligations of the prime contract down to the
subcontractors.
C) A way to move water off-site.
D) An automatic payment system.
Correct Answer: B. It ensures the subcontractor is bound by the same safety and
quality standards as the general contractor.
11. What is "Proprietary Data"?
A) Information that is publicly available.
B) Confidential information or trade secrets belonging to a company.
C) Data about the property taxes.
D) The contractor's phone list.
Correct Answer: B. Contracts usually have clauses to protect this information during
the design phase.
12. What is "Anticipatory Repudiation"?
A) Predicting a project will be successful.
B) When one party clearly states or demonstrates they will not fulfill their contract
obligations before the deadline.
C) A request for a change order.
D) Signing the contract early.
Correct Answer: B. The non-breaching party can sue immediately rather than
waiting for the actual deadline to pass.
13. What is a "Miller Act" bond?
A) A bond for a beer company.
B) A federal requirement for payment and performance bonds on federal
construction projects.
C) A bond for small residential jobs.
D) Insurance for a truck fleet.
