Chapter 8 Flashcards
Contract Management (26 cards)
What are the four key elements that must be in effect to make a contract binding?
Offer & Acceptance, Consideration, Competent Parties, and Legal Purpose
If a deadline for acceptance is not outlined in an offer, it expires in a _______________. This is up to court interpretation and is considered on an individual case basis.
Reasonable Time
What payments are generally calculated by taking the difference between the completed work and materials delivered and a predetermined schedule of unit costs?
Progress Payments
What type of payments protect the owner by holding the contractor responsible for following the planned schedule and allowing the contractor to pay for labor and material expenditures as they occur?
Progress Payments
What is used by the owner to ensure completion of the construction project and provide protection against liens, claims, and defaults?
Retainage
How much retainage is generally held from each progress payment?
10%
Once the structure can be used for its intended purpose, the architect issues a __________________________.
Certificate of Substantial Completion
What type of certificate is issued by the building inspector and deems the structure meets all applicable codes and is safe for occupancy?
Certificate of Occupancy
A _____________ may occur when a party: refuses to perform the contract, performs an act prohibited by the contract, or prevents the other party from performing its obligations.
Breach
What are the two types of breaches?
Material and Immaterial
What term refers to the standard language or clauses generally appearing at the end of a contract with the purpose to protect the business in the even of a lawsuit?
Boilerplate
Force majeure, indemnification, differing site conditions, warranties or guarantees, delays and extension of time, schedule acceleration, and an artistic changes clause are all examples of what?
Risk Allocation
What risk allocation addresses “acts of God” and other external events such as war or labor strikes?
Force Majeure
What risk allocation absolves the party from any payment for losses and damaged incurred by a third party?
Indemnification
In what type of contract does the contractor agree to complete a project for a predetermined, specified price?
Lump-Sum Contract
What type of contract may be used for jobs where the extent of work cannot be fully determined, or the actual quantities of required items cannot be accurately calculated in advance?
Unit-Price Contract
In what type of contract is the contractor reimbursed for the actual cost of labor and materials and is paid a markup fee for overhead and profit?
Cost-Plus Contract
The _________________ contracting method is the traditional form of contracting.
Single Prime Method
What type of contracting method has the owner contract with one company to complete the process from start to finish?
Design/Build Method
Under the _____________________, the project owner contracts with a professional construction manager to coordinate and manage the project.
Construction Management Method
What type of construction is similar to the design/build construction model in which the contractor also obtains financing and land?
Turnkey
What is a written agreement between the owner and contractor to change the contract, whether to add to, delete from, or otherwise alter the work set forth in the construction documents?
Change Order
What are changes prior to the contract award called?
Addenda
What are changes made after the contract is signed and executed called?
Modifications
