AFSB 152 COMPREHENSIVE TEST
SCRIPT 2026 QUESTIONS WITH
SOLUTIONS 100% CORRECT.
⩥ Due to the scope of the project, Cortland Company and May
Contracting agreed to a cost-plus construction contract. Which one of
the following accurately describes a cost-plus construction contract?
- A cost-plus contract includes cost of work and a fee for overhead and
profit.
- A cost-plus contract is a fixed-price contract with a changes clause.
- A cost-plus contract includes costs of materials plus labor costs.
- A cost-plus contract includes work costs agreed to in advance plus cost
overruns.. Answer: A cost-plus contract includes cost of work and a fee
for overhead and profit.
⩥ Which one of the following correctly describes the right of an owner
or a contractor to terminate a contract?
- An owner or a contractor can terminate a contract at any time for any
reasonable cause.
- Without a termination clause, an owner or a contractor can terminate a
contract only for a material breach of contract.
- Without a termination clause, an owner can terminate a contract, but a
contractor cannot.
,- Without a termination clause, an owner or a contractor cannot
terminate a contract for any reason.. Answer: Without a termination
clause, an owner or a contractor can terminate a contract only for a
material breach of contract.
⩥ A limited liability company is most similar to a:
- Subchapter S corporation.
- Subchapter C corporation.
- Joint venture.
- General partnership.. Answer: Subchapter S corporation:
- Tax liability is passed through to the individual members similar to the
way tax liability is passed to shareholders in S Corps.
⩥ Mediation has become a favored form of dispute resolution. Which
one of the following statements is true regarding mediation?
- Mediation is the most time-consuming form of dispute resolution.
- Mediation encourages parties to make offers and counteroffers.
- Mediation develops a solution which is final and binding.
- Mediation often results in shock verdicts.. Answer: Mediation
encourages parties to make offers and counteroffers.
⩥ Which one of the following is correct regarding the statute of
limitations for filing a lawsuit regarding a claim under the Miller Act?
- The statute of limitations is one year.
,- The statute of limitations is 90 days.
- There is no statute of limitations.
- The statute of limitations is determined by state law.. Answer: The
statute of limitations is one year.
⩥ Contractor Marshall has been presented with a unit-priced contract
from project owner Grayson Properties. A unit-price contract is used
- For most construction contracts.
- To provide a sharing agreement.
- To provide a maximum guaranteed price.
- When the quantity of work cannot be determined in advance.. Answer:
When the quantity of work cannot be determined in advance.
⩥ Which one of the following is true regarding joint ventures?
- All partners must participate equally in a joint venture.
- All partners are always fully responsible for the entire project.
- In a silent joint venture, the silent partner has limited responsibility.
- A limited joint venture can be formed to limit an individual's
participation.. Answer: A limited joint venture can be formed to limit an
individual's participation.
⩥ Which one of the following correctly describes those who must give
notice to the prime contractor under the Miller Act?
, - Only second-tier claimants are required to give notice to the prime
contractor.
- No one filing a claim under the Miller Act is required to give notice to
the prime contractor.
- Only first-tier claimants are required to give notice to the prime
contractor.
- All claimants are required to give notice to the prime contractor..
Answer: Only second-tier claimants are required to give notice to the
prime contractor.
⩥ Ewing General Contracting (EGC) entered a contract to complete a
major renovation for Ralph's Restaurant. Because Ralph's is located in a
tourist town, it was important that the construction work be completed
by May 1. The construction contract included a provision that stated that
if the job was not completed by May 1, EGC would be assessed $500 a
day for each day of delay in completing the project. These damages to be
paid by EGC are known as
- Direct damages.
- Consequential damages.
- Liquidated damages.
- Actual damages.. Answer: Liquidated damages.
⩥ The costliest method of contract dispute resolution is typically
- Contract termination.
- Mediation.
SCRIPT 2026 QUESTIONS WITH
SOLUTIONS 100% CORRECT.
⩥ Due to the scope of the project, Cortland Company and May
Contracting agreed to a cost-plus construction contract. Which one of
the following accurately describes a cost-plus construction contract?
- A cost-plus contract includes cost of work and a fee for overhead and
profit.
- A cost-plus contract is a fixed-price contract with a changes clause.
- A cost-plus contract includes costs of materials plus labor costs.
- A cost-plus contract includes work costs agreed to in advance plus cost
overruns.. Answer: A cost-plus contract includes cost of work and a fee
for overhead and profit.
⩥ Which one of the following correctly describes the right of an owner
or a contractor to terminate a contract?
- An owner or a contractor can terminate a contract at any time for any
reasonable cause.
- Without a termination clause, an owner or a contractor can terminate a
contract only for a material breach of contract.
- Without a termination clause, an owner can terminate a contract, but a
contractor cannot.
,- Without a termination clause, an owner or a contractor cannot
terminate a contract for any reason.. Answer: Without a termination
clause, an owner or a contractor can terminate a contract only for a
material breach of contract.
⩥ A limited liability company is most similar to a:
- Subchapter S corporation.
- Subchapter C corporation.
- Joint venture.
- General partnership.. Answer: Subchapter S corporation:
- Tax liability is passed through to the individual members similar to the
way tax liability is passed to shareholders in S Corps.
⩥ Mediation has become a favored form of dispute resolution. Which
one of the following statements is true regarding mediation?
- Mediation is the most time-consuming form of dispute resolution.
- Mediation encourages parties to make offers and counteroffers.
- Mediation develops a solution which is final and binding.
- Mediation often results in shock verdicts.. Answer: Mediation
encourages parties to make offers and counteroffers.
⩥ Which one of the following is correct regarding the statute of
limitations for filing a lawsuit regarding a claim under the Miller Act?
- The statute of limitations is one year.
,- The statute of limitations is 90 days.
- There is no statute of limitations.
- The statute of limitations is determined by state law.. Answer: The
statute of limitations is one year.
⩥ Contractor Marshall has been presented with a unit-priced contract
from project owner Grayson Properties. A unit-price contract is used
- For most construction contracts.
- To provide a sharing agreement.
- To provide a maximum guaranteed price.
- When the quantity of work cannot be determined in advance.. Answer:
When the quantity of work cannot be determined in advance.
⩥ Which one of the following is true regarding joint ventures?
- All partners must participate equally in a joint venture.
- All partners are always fully responsible for the entire project.
- In a silent joint venture, the silent partner has limited responsibility.
- A limited joint venture can be formed to limit an individual's
participation.. Answer: A limited joint venture can be formed to limit an
individual's participation.
⩥ Which one of the following correctly describes those who must give
notice to the prime contractor under the Miller Act?
, - Only second-tier claimants are required to give notice to the prime
contractor.
- No one filing a claim under the Miller Act is required to give notice to
the prime contractor.
- Only first-tier claimants are required to give notice to the prime
contractor.
- All claimants are required to give notice to the prime contractor..
Answer: Only second-tier claimants are required to give notice to the
prime contractor.
⩥ Ewing General Contracting (EGC) entered a contract to complete a
major renovation for Ralph's Restaurant. Because Ralph's is located in a
tourist town, it was important that the construction work be completed
by May 1. The construction contract included a provision that stated that
if the job was not completed by May 1, EGC would be assessed $500 a
day for each day of delay in completing the project. These damages to be
paid by EGC are known as
- Direct damages.
- Consequential damages.
- Liquidated damages.
- Actual damages.. Answer: Liquidated damages.
⩥ The costliest method of contract dispute resolution is typically
- Contract termination.
- Mediation.
