CMGT385 FINAL EXAM REVIEW
Contract - Answers - An enforceable agreement that defines the relationship, roles, and
responsibilities between two parties.
Elements of Contract Formation - Answers - The key requirements: Offer, Acceptance,
and Consideration (often called Mutual Assent, Consideration, and Capacity).
Mutual Assent - Answers - The 'meeting of the minds,' requiring a valid offer and an
unqualified acceptance of the same terms.
Consideration - Answers - Something of value given by each party to the other, creating
a bargain-for-exchange.
Statute of Frauds - Answers - Law requiring certain types of contracts, such as those
that cannot be completed within one year, to be in writing to be enforceable.
Prime Agreement - Answers - The main contract between the Owner and the
Contractor/CM/GC.
Subcontract - Answers - The contract between the Contractor/CM/GC and a
Subcontractor.
AIA A201 - Answers - The widely used General Conditions of the Contract for
Construction, which governs the basic relationship between the Owner, Contractor, and
Architect.
Promissory Estoppel - Answers - A legal principle that prevents a party from breaking a
promise if the other party reasonably relied on that promise to their detriment.
Breach of Contract - Answers - A failure, without legal excuse, to perform any promise
that forms all or part of a contract.
D-B-B (Design-Bid-Build) - Answers - The traditional project delivery method with
separate contracts for design and construction.
DB (Design-Build) - Answers - A project delivery method where one entity contracts with
the owner to provide both design and construction services.
CM/GC (CM@R) - Answers - Construction Manager/General Contractor or CM at Risk;
acts as an advisor during design and as the contractor during construction.
CM as Agent - Answers - A Construction Manager who acts purely as an advisor to the
owner and does not hold the trade contracts.
, IPD (Integrated Project Delivery) - Answers - A delivery method where key participants
are bound by a single contract and share risk and reward.
Lump-Sum (Fixed Price) - Answers - A pricing method where the contractor agrees to
complete the work for a single, fixed price.
Cost-Plus - Answers - A pricing method where the contractor is reimbursed for all
incurred costs plus an agreed-upon fee.
Guaranteed Maximum Price (GMP) - Answers - A fixed price ceiling for a Cost-Plus
contract; the contractor is responsible for costs that exceed this price (barring contract
changes).
Unit Pricing - Answers - A pricing method where the contractor is paid a specific price
for each measured unit of work (e.g., price per square foot).
Privity of Contract - Answers - The direct legal relationship between two parties that
allows them to enforce contractual rights and remedies against each other.
Project Delivery Method - Answers - The overall process for organizing, contracting for,
and completing a construction project.
Defined Term - Answers - A word or phrase given a specific, controlling meaning within
the contract (often capitalized).
Ambiguity - Answers - A contractual term is susceptible to more than one reasonable
interpretation.
Parol Evidence Rule - Answers - A rule that generally bars extrinsic evidence (like
verbal agreements) that contradicts or modifies the final written agreement.
Integrated Contract - Answers - A contract intended by the parties to be the complete
and final expression of their entire agreement.
Contra Proferentem - Answers - A rule of interpretation that states if a contract is
ambiguous, it should be construed against the party who drafted it.
Spearin Doctrine - Answers - An owner who provides design plans and specifications
implicitly warrants that they are suitable for their intended purpose.
Order of Precedence - Answers - Rules established in a contract for determining which
document governs in case of conflict (e.g., specifications over drawings).
Delegated Design - Answers - A risk where the contractor assumes design liability for a
specific portion of the work (e.g., fire sprinklers).
Contract - Answers - An enforceable agreement that defines the relationship, roles, and
responsibilities between two parties.
Elements of Contract Formation - Answers - The key requirements: Offer, Acceptance,
and Consideration (often called Mutual Assent, Consideration, and Capacity).
Mutual Assent - Answers - The 'meeting of the minds,' requiring a valid offer and an
unqualified acceptance of the same terms.
Consideration - Answers - Something of value given by each party to the other, creating
a bargain-for-exchange.
Statute of Frauds - Answers - Law requiring certain types of contracts, such as those
that cannot be completed within one year, to be in writing to be enforceable.
Prime Agreement - Answers - The main contract between the Owner and the
Contractor/CM/GC.
Subcontract - Answers - The contract between the Contractor/CM/GC and a
Subcontractor.
AIA A201 - Answers - The widely used General Conditions of the Contract for
Construction, which governs the basic relationship between the Owner, Contractor, and
Architect.
Promissory Estoppel - Answers - A legal principle that prevents a party from breaking a
promise if the other party reasonably relied on that promise to their detriment.
Breach of Contract - Answers - A failure, without legal excuse, to perform any promise
that forms all or part of a contract.
D-B-B (Design-Bid-Build) - Answers - The traditional project delivery method with
separate contracts for design and construction.
DB (Design-Build) - Answers - A project delivery method where one entity contracts with
the owner to provide both design and construction services.
CM/GC (CM@R) - Answers - Construction Manager/General Contractor or CM at Risk;
acts as an advisor during design and as the contractor during construction.
CM as Agent - Answers - A Construction Manager who acts purely as an advisor to the
owner and does not hold the trade contracts.
, IPD (Integrated Project Delivery) - Answers - A delivery method where key participants
are bound by a single contract and share risk and reward.
Lump-Sum (Fixed Price) - Answers - A pricing method where the contractor agrees to
complete the work for a single, fixed price.
Cost-Plus - Answers - A pricing method where the contractor is reimbursed for all
incurred costs plus an agreed-upon fee.
Guaranteed Maximum Price (GMP) - Answers - A fixed price ceiling for a Cost-Plus
contract; the contractor is responsible for costs that exceed this price (barring contract
changes).
Unit Pricing - Answers - A pricing method where the contractor is paid a specific price
for each measured unit of work (e.g., price per square foot).
Privity of Contract - Answers - The direct legal relationship between two parties that
allows them to enforce contractual rights and remedies against each other.
Project Delivery Method - Answers - The overall process for organizing, contracting for,
and completing a construction project.
Defined Term - Answers - A word or phrase given a specific, controlling meaning within
the contract (often capitalized).
Ambiguity - Answers - A contractual term is susceptible to more than one reasonable
interpretation.
Parol Evidence Rule - Answers - A rule that generally bars extrinsic evidence (like
verbal agreements) that contradicts or modifies the final written agreement.
Integrated Contract - Answers - A contract intended by the parties to be the complete
and final expression of their entire agreement.
Contra Proferentem - Answers - A rule of interpretation that states if a contract is
ambiguous, it should be construed against the party who drafted it.
Spearin Doctrine - Answers - An owner who provides design plans and specifications
implicitly warrants that they are suitable for their intended purpose.
Order of Precedence - Answers - Rules established in a contract for determining which
document governs in case of conflict (e.g., specifications over drawings).
Delegated Design - Answers - A risk where the contractor assumes design liability for a
specific portion of the work (e.g., fire sprinklers).
