Contract Law

Question 1

For a legally binding agreement to be enforceable by the courts, it needs to meet what requirements

Answer 1

Agreement between the parties

Parties need capacity to enter into a contract

Genuine intention to form a binding legal relationship

Supported by consideration

Lawful intent formalities

Question 2

What are the twin elements of an agreement

Answer 2

Offer

Acceptance

Question 3

Prior to a contract, the parties sometimes exchange communications which is reffered to as what?

Answer 3

Letter of intent

Expresses the intention to enter into a contract BUT an agreement to agree in the future is not a valid contract

Question 4

Example of an owner in breach of a contract?

Answer 4

Do not make proper payments as required in the contract.

Question 5

What could lead to a contractor breaching

Answer 5

Failure to carry out work

Lack of performance

not completing work within reasonable time.

Question 6

Termination of contract by performance?

Answer 6

Contract comes to an end naturally when parties have satisfactorily completed all of the obligations under the contract.

Usually happens after final inspection

Question 7

Termination of contact by agreement?

Answer 7

Contract may be ended anytime effectively by an oral agreement

Question 8

System of settlement of disputes without resorting to the courts, is called what ?

Answer 8

Arbitration

Question 9

What is a Change Order?

Answer 9

Agreement between owner and contractor to make a certain change in the contract work for an agreed price or method of payment such as cost plus, unit price, time and materials.

Question 10

Builders lien rights are created by?

Answer 10

Provincial legislation

Question 11

What do builder liens require?

Answer 11

Owners to maintain a lien fund by holding back a percentage of all payments to contractors for a certain time.

Question 12

Statutory lien holdback in Alberta?

Answer 12

10%

Question 13

Provisions for the interim release of holdback allows?

Answer 13

Owner to release major lien holdback on a subcontractor work when no liens have been registered in connection to the work.

Question 14

Open bidding?

Answer 14

Open form of competitive bidding is most commonly used for public projects.

Question 15

Criteria for selecting a builder/contractor

Answer 15

Price

Reputation

Past Performance

Experience

Safety

Financial Status

Bonding

Question 16

What may be done to ensure contractor is financially stable to ensure good bonding..

Answer 16

Financial status check can be done to ensure contractors are not at there limits of obtaining bonds. so ya dont invite tha fuckas

Question 17

The purpose of a Bid Bond?

Answer 17

Ensures the owner that the contactor Whose bid is accepted will, within the required time period, enter into a contract with the owner and provide contract security (PERFORMANCE BOND)

Question 18

What is a Performance bond?

Answer 18

Commitment by bonding company to compensate for loss sustained to the owner for up to face value of the bond against any losses that result from failure of the contractor to perform in accordance with contract

Question 19

If contractor fails to meet performance bond contract requirements?

Answer 19

Owner has right until bond expiration to call bonding company to rectify the default or compensate the owner by means of damages

Question 20

Labour and Material Payment bond?

Answer 20

Commitment by surety to pay for labour and materials furnished to the contractor for use on the project.

Question 21

What is a Payment bond

Answer 21

Commits surety up to face value of the bond to ensure that the principal pays the obligee.

Question 22

In a payment bond whos the principal whos the obligee

Answer 22

Principal - Owner

Obligee - Contactor

Question 23

When is a payment bond used?

Answer 23

When contractor has concerns about the owner ability to pay for the work.

Question 24

What is this a picture of?

Answer 24

Criteria for selecting a Builder/Contractor