LO 2

Question 1

What is a contract?

Answer 1

A legally binding agreement between multiple parties.

Question 2

What is invitation to treat?

Answer 2

To invite offers.

Question 3

What is postal acceptance rule?

Answer 3

Acceptance is complete when offer is in the mail.

Question 4

What is recipient rule?

Answer 4

Acceptance is complete when recipient has communication.

Question 5

Parties privy to contract

Answer 5

The parties in the contract are the only ones who can enforce it.

Question 6

Offer made and accepted includes?

Answer 6

Scope, price, timeline, request for proposal, request for offer.

Question 7

Capacity to contract

Answer 7

Understand the contract terms

Question 8

Consideration

Answer 8

Promises and obligations agreed upon by all parties.

Question 9

How can you void a contract?

Answer 9

-Material mistake made by all parties that is significant and existed at time of contract signing.
-Misrepresentation which is an untrue statement made by one party to influence the other parties decisions.
-Duress as a party was subjected to improper pressure, threats or coercion.
-Unconscionability which is an unfair one-sided contract.
-Frustration is unforeseen situation that prevents one party from fulfilling obligations, a force majeure clause.

Question 10

Quasi contract

Answer 10

When compensation falls short for work done.

Question 11

Estoppel clause

Answer 11

One of both parties wave rights to certain conditions.

Question 12

Quantum merit

Answer 12

Parties who have provided services are entitled to compensation.

Question 13

What is an agent?

Answer 13

A person who acts on behalf of someone else.

Question 14

What is authority?

Answer 14

-Expressed authority is actual authority.
-Apparent authority is established on principals.

Question 15

Indemnity

Answer 15

A written agreement between 2 parties, one bearing financial loss, and the agreement is signed by insurance company.

Question 16

Change order

Answer 16

Parties agree on the schedule and price of the change of scope. Will either be a lump sum or cost plus.

Question 17

Possible contracting issues

Answer 17

-Breach can happen when any of the list of subcontractors that were submitted when bidding are replaced.
-Pay-if-paid means that general contractors get paid first if there has been a delay in payment.
-Labour and material bond is to guarantee contractor will pay for materials and subcontractors.