Chap 10 - Claims and Disputes

Question 1

The successful project is one that is:

Answer 1

• completed on time,
• within budget, and
• with all claims resolved.

CAPG 10.1

Question 2

A request for compensation for dealing with a situation that differs materially from what was anticipated by the parties at the time of entering into the contract is called a ___________ .

Answer 2

….a claim.

CAPG 10.1

Question 3

Claims are initial requests for __________

Answer 3

….adjustment in contract sum or time.

CAPG 10.1

Question 4

T/F: Change order requests and proposal requests are claims.

Answer 4

TRUE

CAPG 10.1

Question 5

Disputes are claims that cannot be resolved by the parties to the construction contract without ___________

Answer 5

….the intervention of an independent third party.

CAPG 10.1

Question 6

Generally, three sources of claims may occur on a project. They are:

Answer 6

• claims by the contractor against the owner,
• claims by the owner against the contractor or the A/E
• claim by someone other than a party to the construction contract. (third party claims)

CAPG 10.2.1

Question 7

If, during the course of the project, the contractor encounters conditions contrary to those stipulated or inferred in the contract documents, a claim may be initiated. Changed conditions include:

Answer 7

• Active interference by the owner or A/E
• Conditions beyond the control of either the contractor or the owner
• Unknown or concealed conditions that affect the extent of the work
• Modifications made to the contract documents
• Errors and omissions in the contract documents

CAPG 10.2.2

Question 8

To file a claim, the contractor is required to provide clear documentation that a changed condition _____________

Answer 8

• was not foreseeable at the time of pricing, and
• resulted in demonstrable damages.

CAPG 10.2.2

Question 9

Claims resulting from changed conditions may also be submitted by the contractor on behalf of:

Answer 9

….the contractor’s subcontractors and suppliers.

CAPG 10.2.2

Question 10

Two types of claims relating to breach of contract are:

Answer 10

• claims for untimely payment or nonpayment
• claims for improper or ineffective construction contract administration

CAPG 10.2.2

Question 11

Claims initiated by the owner may include:

Answer 11

• Correction of nonconforming or defective work
• Repair of damages to existing property
• Liquidated or compensatory damages for late performance
• Ineffective management and/or control of the work by the
contractor resulting in added costs for:
• Inordinate re-reviews of shop drawings
• Reviews of substitution requests
• Interferences with the owner’s operations
• Additional site visits, inspections, and related
administrative time

CAPG 10.2.3

Question 12

The most common examples of third-party claims are ___________

Answer 12

…. injury or death to persons, and property damage .

CAPG 10.2.4

Question 13

Under the provisions of AIA A201 and EJCDC C-700, the contractor agrees to indemnify ___________ against ______________.

Answer 13

….indemnify the owner and A/E against all third-party claims resulting from the contractor’s performance of work on the project.

CAPG 10.2.4

Question 14

Under the legal concept of privity of contract, only the contractor and the owner may make a claim against the other. Therefore, ______________

Answer 14

….subcontractors, suppliers, and other participants rely on the contractor to pursue claims on their behalf.

CAPG 10.2.5

Question 15

If either party takes exception to the decision of the initial decision maker, the claim may be ______ (4 items)

Answer 15

….negotiated, mediated, arbitrated, or litigated

CAPG 10.2.6

Question 16

T/F: AIA Document A201 and EJCDC C-700 stipulate a time limit for submitting claims, and require the A/E to make an initial response within a specified period of time.

Answer 16

TRUE:

CAPG 10.2.6

Question 17

In analyzing claims, the A/E may:

Answer 17

• request additional information,
• submit a schedule for resolution to which the parties may agree, or
• propose other actions that would initiate new time frames.

CAPG 10.2.6

Question 18

A claim should be initially addressed by reviewing the contract documents to determine _____

Answer 18

….entitlement.

CAPG 10.2.7

Question 19

The contractor’s entitlement to a claim involves two separate determinations. What are they?

Answer 19

• determination whether the contract documents adequately identify the claim as being within the contractor’s contractual obligations.
• determination of the timing of the claim.

CAPG 10.3.1

Question 20

Regarding a Contractor’s claim….
If the work in question is found not to be reasonably inferred, then ____________.
If the work in question is found to be reasonably inferred, then ___________.

Answer 20

….If not reasonably inferred, the contractor is entitled to a contract modification.
….If reasonably inferred, the entitlement to the claim is denied.

CAPG 10.3.1

Question 21

Failure to properly notify the A/E and the owner of a claim can result in _____________

Answer 21

….forfeiture of entitlement to the claim.

CAPG 10.3.1

Question 22

Regarding an Owner’s claim….

If the work in question may be reasonably inferred, then _____________.

If the work in question cannot be reasonably inferred, then _______________.

Answer 22

…. If reasonably inferred, the owner’s claim is upheld.

….If not reasonably inferred, the owner’s claim is denied.

CAPG 10.3.2

Question 23

Claims avoidance has become a common term applied to the management of claims and disputes, but perhaps a better term would be:

Answer 23

….dispute avoidance.

CAPG 10.4.1

Question 24

Three keys to dispute avoidance are:

Answer 24

• communication,
• documentation, and
• claim resolution action plans.

CAPG 10.4.1

Question 25

Initial notification of a claim event should be oral and followed by __________

Answer 25

….a written notice as specified by the general conditions.

CAPG 10.4.1

Question 26

Action plans encourage claim resolution at the ___________

Answer 26

….lowest possible and appropriate level.

CAPG 10.4.1

Question 27

Claim resolution action plans establish a system for:

Answer 27

• Prioritizing claims and promptly submitting documentation
• Identifying parties with responsibility and authority for settling claims
• Advancing the claim to a higher authority when the initial parties are in dispute

CAPG 10.4.1

Question 28

T/F: Disputes often occur when the A/E’s decision on a claim is not accepted by one or both parties and the claim cannot be resolved through negotiation.

Answer 28

TRUE:

CAPG 10.5 Intro

Question 29

Failure to negotiate effectively is due to one or more of the participants failing to _________

Answer 29

….understand and accept the rights, responsibilities, and requirements established by the contract documents.

CAPG 10.5 Intro

Question 30

T/F: The parties are not obligated under the conditions of the contract to use the specified method of dispute resolution indicated in the contract documents.

Answer 30

FALSE

CAPG 10.5.1

Question 31

AIA A201 states that either party can demand the other party file for mediation. If the other party does not file for mediation, then ____________

Answer 31

….both parties waive mediation and any other dispute resolution method

CAPG 10.5.1

Question 32

Arbitration and mediation are examples of __________

Answer 32

….alternative dispute resolution (ADR) methods.

CAPG 10.5.1

Question 33

AIA Document A201 stipulates binding arbitration. In those states where this is enforceable, then _________

Answer 33

….either party will be allowed to litigate the dispute.

CAPG 10.5.1

Question 34

If the A/E has failed to render a decision in the required time period, ____________

Answer 34

….a demand for dispute resolution may be made by either party.

CAPG 10.5.2

Question 35

Litigation can, in many instances, be the least desirable method of dispute resolution because _______

Answer 35

….the parties to the contract lose control of the outcome.

CAPG 10.5.3

Question 36

When a binding method of ADR is indicated, most judicial jurisdictions do not allow ______

Answer 36

….the parties to litigate a dispute.

CAPG 10.5.4

Question 37

Binding dispute resolution methods include:

Answer 37

• Binding arbitration
• Judicial Reference

CAPG 10.5.4

Question 38

Nonbinding dispute resolution methods include:

Answer 38

• Mediation
• Nonbinding Arbitration
• Mini-trial
• Disputes Review Board

CAPG 10.5.4

Question 39

When a claim has been decided by the initial decision maker, either party dissatisfied with the decision may __________

Answer 39

….make a demand for arbitration after an attempt at mediation.

CAPG 10.5.4

Question 40

One advantage of arbitration over litigation is that the arbitrator’s panel __________

Answer 40

….is composed of individuals with experience in the construction industry and its idiosyncrasies, and therefore is better able to understand and evaluate the claim

CAPG 10.5.4