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CeeCeeCeeAye > Domain 5: Claims And Disputes > Flashcards

Domain 5: Claims And Disputes Flashcards

1
Q

A. Identify construction issues and procedures for resolving them.
B. Interpret contract documents for compliance.
C. Notify parties of non-conforming work.
D. Review and determine legitimacy of a claim.
E. Review and process proposed changes for effect on cost, time, and quality.
F. Participate in the development of revisions, changes, additions, and deletions, related to the
enforcement of the construction contract.
G. Follow procedures for change order requests.
H. Evaluate change order requests.
I. Evaluate the effect of non-conforming work.
J. Participate in dispute resolution measures.

A
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2
Q

Claim

A

A demand or assertion by one of the parties seeking, as a matter of right, payment of money or other relief with respect to the terms of the contract.

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3
Q

Claims are initial requests for adjustment in: ____ or ____

A

contract sum or time

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4
Q

What are the 3 sources of claims that may occur on a project?

A
  1. claims by the contractor (often on behalf of the subcontractors/ suppliers) against the owner
  2. claims by the owner against the contractor or A/E
  3. claims initiated by someone other than a party to the construction contract
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5
Q

During the course of the project, what changed or conditions contrary to those stipulated in the contract documents, may initiate a claim?

A

* interference by owner or A/E

* conditions beyond control of contractor or owner

* unknown or concealed conditions that affect extent of work

* modifications made to the contract documents

* errors and omissions in the contract documents

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6
Q

What conditions may cause an owner to initiate a claim?

A

* correction of non–conforming/defective work

* repair of damages to existing property

* liquidated or compensatory damages for late performance

* ineffective management or control of the work by the contractor resulting in added costs.

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7
Q

Under AIA Document A201, and EJCDC C–700, the contractor agrees to indemnify the owner and A/E against what?

A

all third–party claims resulting from the contractor’s performance of work on the project

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8
Q

Generally, third–party claims arise from construction activities that ____

A

affect the interests of others in areas adjacent to or in the vicinity of the project

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9
Q

What is the legal concept of privity?

A

Under the legal concept of privity of contract, only the contractor and owner may make a claim against the other. Subcontractors, suppliers, and other participants rely on the contractor to pursue claims on their behalf.

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10
Q

All claims are initially decided by the ____ or ___.

A

Initial Decision Maker or Architect

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11
Q

If either party takes exception to the decision of the decision maker regarding, a claim may be: _________, _________, _________, or _________ between the parties as provided for in the contract documents.

A

* Negotiated

* Mediated

* Arbitrated

* Litigated

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12
Q

Time limits for initiating claims are established in ____.

A

General Conditions

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13
Q

Timely notification is a right reserved for the party to whom a claim is directed. Why?

A

So that the party has an opportunity to mitigate the consequences of the claim situation.

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14
Q

The procedures for processing and settling claims are contractually based and focused on ____.

A

Timely and Equitable Resolution

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15
Q

A claim should be initially addressed by ________________________________.

A

reviewing the contract documents to determine entitlement

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16
Q

Once entitlement is established, what should happen next?

A

Cost or Time Adjustments should be determined and documented as required by the contract documents.

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17
Q

What are the two separate determinations involved in the contractor’s entitlement to a claim?

A
  1. claim is evaluated to determine whether the contract documents adequately identify the claim as being within the contractor’s contractual obligation.
  2. the timing of the claim (notification to owner or A/E before performing extra work)
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18
Q

Receipt of proper notification by the contractor is a right reserved by who?

A

the owner

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19
Q

Failure to properly notify the A/E and the owner can result in ___.

A

a forfeiture of entitlement to the claim

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20
Q

Determination of owner entitlement involves determining whether the work in question required of the contractor by the owner _____.

A

may be reasonably inferred from the contract documents

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21
Q

A successful project is?

A

A project completed on time, within budget, and with all claims resolved

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22
Q

An unresolved claim may lead to a ____.

A

dispute

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23
Q

Generally speaking, what is a claim?

A

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

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24
Q

According to the EJCDC C–700 Standard General Conditions, what is “a demand or assertion by owner or contractor seeking an adjustment of contract price or contract times, or both”?

A

a claim

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25
Q

Define “claim”

A

initial request for adjustment in contract sum or time

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26
Q

True or False

A change order request is a claim.

A

True

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27
Q

True or False

A proposal request is a claim.

A

True

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28
Q

What is a dispute?

A

A claim that cannot be resolved by the parties to the construction contract without the intervention of an independent third party.

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29
Q

True or False

During construction, participants relate to the contract documents as ___.

A

they are (not as they would like them to be)

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30
Q

True or False

Deciding claims will and should take a substantial amount of time.

A

False

* deciding claims quickly aids the progress of the work by providing the contractor with certain and specific direction.

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31
Q

What document establishes procedures and requirements for filing, settling, and disputing claims?

A

AIA Doc 201 (and EJCDC C–700)

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32
Q

Give six methods that promote dispute resolution.

A
  1. documenting interpretations, conversations, and decisions
  2. understanding the rights and obligations of each party to the construction contract
  3. acknowledging and dealing with dispute promptly and fairly
  4. listening carefully and communicating
  5. finding mutually beneficial solutions
  6. considering outside or expert help
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33
Q

State the steps the initial decision maker must follow for review of a claim. State them in the correct sequential order.

A
  1. event occurs
  2. written notice of claim
  3. A/E receives claim
  4. A/E requests additional information
  5. A/E proposes schedule to take action
  6. A/E rejects claims or recommends approval
  7. claimant appeals or A/E recommends compromise and parties negotiate
  8. dispute resolution or parties reach a compromise
  9. claim settled
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34
Q

Whose responsibility is it to prove a claim?

A

the party making the claim

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35
Q

Whose responsibility is it to evaluate the supporting documentation?

A

A/E or Initial Decision Maker

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36
Q

Claims involving adjustments in contract sum or time require what?

A

supporting documentation

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37
Q

On stipulated sum contracts, claims for additional cost are reviewed against what?

A

the A/E’s independent estimate of cost, based on contractor’s schedule of values and published estimating guides

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38
Q

What must be established if additional time is requested by the contractor in a dispute?

A

detrimental impact to the original project “critical path”

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39
Q

What documentation should the contractor provide for a claim of extra time?

A

* planned schedules,

* historical or baseline schedules,

* contemporaneous project site records of events that support the extent and duration of activities on the planned schedule

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40
Q

What may the A/E require in the case of a claim arising from defective or nonconforming work?

A

testing and sampling of the work (by independent testing lab); contractor should have the right to observe the testing

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41
Q

Whose responsibility is special testing to determine a claim arising from defective or nonconforming work?

A

the party against whom the claim is decided

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42
Q

Coordinating observations and inspections so that interested parties have the opportunity to participate often leads to _____?

A

discovery of mutually acceptable solutions that are not initially apparent at the negotiation table.

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43
Q

When resolution of a claim is reached, a ____________ may be issued to reflect the terms of the settlement.

A

change order

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44
Q

Because unresolved claims, or disputes, have become so commonplace in the construction industry, _________ ____________ has become a common term applied to the management of claims and disputes.

A

claims avoidance

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45
Q

Because a claim is defined as a request for adjustment to the contract, it is more appropriate to think in terms of ________ avoidance.

A

dispute

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46
Q

Claim resolution action plans establish a system for:

A

* prioritizing claims and quickly submitting documentation for evaluation

* identifying parties with responsibility and authority

* advancing claim to a higher authority when parties are in dispute

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47
Q

What are the advantages of action plans during claim resolution?

A

* encourage claim resolution at lowest possible and appropriate level

* help to reduce the time needed to reach resolution

* lower tensions that can lead to unresolved claims that become disputes

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48
Q

What is the FIRST step to avoiding disputes?

A

each party understanding the interests and limitations of the other

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49
Q

The owner may hold the contractor responsible for costs which are ___.

A

reasonably documented or foreseeable at the time of pricing

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50
Q

True or False

The owner should understand the contractor’s need for thorough documentation justifying a claim.

A

False

* The CONTRACTOR should understand the OWNER’S need for thorough documentation justifying a claim

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51
Q

The contractor must accept that the owner has the right to claim compensation for ______.

A

nonperformance, poor performance, or negligence resulting in damages to the owner

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52
Q

What is the A/E’s role during resolving claims or disputes?

A

interpret the contract documents impartially and recommend a settlement to the parties

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53
Q

What can make the difference between a claim being settled or becoming a dispute?

A

the A/E’s integrity and sense of accountability to both parties of the contract (owner and contractor)

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54
Q

What are three keys to dispute avoidance?

A

* communication

* documentation

* claim resolution action plans

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55
Q

Initial notification of a claim event should be oral and followed by a written notice, as specified in ____.

A

the general conditions

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56
Q

What is the ideal forum for establishing communication methods and protocols in an effort to avoid a dispute?

A

the pre–construction conference

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57
Q

True or False

In an effort to keep lines of communication ever open, direct communication between subcontractor and supplier with A/E is encouraged.

A

False

* Direct communication between subcontractor and supplier with A/E should NOT occur without the participation of the contractor, unless the contractor has suggested or approved it.

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58
Q

In most cases, the failure to negotiate effectively is due to one or more of the participants failing to ________.

A

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

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59
Q

AIA Document 201 states that if no resolution is reached after the initial decision maker’s decision, then either party can _____.

A

demand the other party file for mediation

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60
Q

If mediation is unsuccessful, the parties may choose to do what?

A

* invoke any dispute resolution process provided for in the supplementary conditions

* submit the claim to another dispute resolution process acceptable to both parties

* submit the claim to a court of competent jursidiction

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61
Q

What two alternative dispute resolution (ADR) methods may be used to avoid litigation?

A

arbitration and mediation

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62
Q

In most states, binding arbitration means what?

A

binding arbitration will be exercised to the exclusion of litigation; neither party will be allowed to litigate the dispute.

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63
Q

What document requires that the A/E make a final determination on a claim and then notify the owner and contractor?

A

Standard General Conditions (AIA/EJCDC)

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64
Q

If the A/E has failed to render a decision in the required time period, a demand for dispute resolution may be made by whom?

A

either party (owner or contractor)

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65
Q

If, after receiving a final determination on a claim, there is disagreement with the determination, the appealing party may within a stipulated time period ________.

A

provide the other party with written notification of its demand for dispute resolution

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66
Q

Failure to make written demand for arbitration within 30 days after the A/E’s final decision results in what?

A

this will make the A/E’s final decision binding on both the owner and the contractor

67
Q

What is the least desirable method of dispute resolution and WHY?

A

litigation; because the parties to the contract lose control of the outcome

68
Q

Why is it important that the parties advance a claim to ADR as soon as they agree they have reached an impasse in negotiations?

A

The project team’s objective should be to avoid having the uncertainties of unresolved issues adversely affect the contractor’s planning, scheduling, and performance of the work on the project.

69
Q

What are the forms of binding dispute resolution methods?

A

* binding arbitration

* judicial reference

70
Q

Describe the disputes Review board method of dispute resolution.

A

Non–Binding Method which establishes a 3–member board of construction experts who periodically convene to review the status of the project in order to detect areas of potential conflict and make recommendations for resolution of issues before they become conflicts.

71
Q

Which of the following is not an alternative dispute resolution method?

* litigation

* arbitration

* mediation

* mini–trial

* dispute review board

A

Litigation

72
Q

Describe the Mini–Trial method of dispute resolution.

A

Non–Binding Method in which a structured process allows parties to present necessary facts of the claim and concepts of applicable law to claim in a compressed time period. A neutral party hearing the case can render an opinion based on established case law and the limits of the contract documents.

73
Q

Define “Non–Binding Arbitration”.

A

A form of arbitration that can be appealed in other venues.

74
Q

What are the forms of non–binding dispute resolution?

A

* mediation

* non–binding arbitration

* mini–trial

* disputes review board

75
Q

What is mediation?

A

Mediation is a non–binding dispute resolution method. It is an extension of negotiation whereby a neutral party acts as a facilitator to aid the parties in finding a mutually acceptable settlement of the claim.

76
Q

When a binding method of ADR is indicated, most judicial jurisdictions _____.

A

do not allow the parties to the construction contract to litigate a dispute

77
Q

Describe Judicial Reference process. What are it’s advantages?

A

* A binding dispute resolution method that is provided for by state statute, which establishes the authority for an independent private party to be retained to decide the matter.

* Advantages are that cases can be resolved in less time, and persons better versed in construction and construction law can be selected to hear the case.

78
Q

True or False

The contract documents prevent parties to the contract from appealing through a court having jurisdiction.

A

False

79
Q

True or False

The A/E has the authority to reject non–conforming work.

A

True

80
Q

True or False

The A/E has the right to accept non–conforming work.

A

False

81
Q

What should the A/E do upon discovering non–conforming work?

A

document the deficiencies in a field observation report and present copies to the contractor and owner

82
Q

Who is responsible for the cost of corrective work?

A

Contractor

83
Q

The contractor is responsible for the cost of corrective costs for additional testing and inspection. Who pays for inspections?

A

The CONTRACTOR pays for additional inspections or tests if the work fails the inspection. The OWNER pays for the inspection if the suspect work passes the inspection or testing.

84
Q

What should the owner do if the contractor refuses to correct non–conforming work within a reasonable amount of time?

A

The owner may, after written notice to contractor, correct or remedy defective work and charge the cost of the remedy to the contractor.

85
Q

What document is used to deduct the costs of remedies to non–conforming work from the amount remaining on the construction contract?

A

change order

86
Q

If the cost of the remedy for non–conforming work exceeds the balance of the contract amount, what happens?

A

the contractor is obliged to pay the difference to the owner

87
Q

True or False

The standard General Conditions give the A/E authority to order the contractor to stop work.

A

False

88
Q

The standard General Conditions stipulate that if a contractor fails to correct work that is not in compliance with the contract documents, _________.

A

the owner may order the contractor to stop work until the reason for the stoppage has been eliminated

89
Q

When is an owner with in their rights to order a contractor to stop construction?

A

When the contractor fails to correct work, or persistently fails to carry out work that is in accordance with the requirements of the construction documents.

90
Q

Contractor may stop work, within 7 days notice, if:

A

* Architect does not issue certificate for payment within 7 days after receipt of contractor application

* Owner does not pay the contractor withon 7 days after established date in the contract documents the amount of the payment owed for the work or awarded by a binding dispute resolution

91
Q

When does the contractor have the right to stop the work?

A

if the owner has failed to pay the contractor within the time stipulated in the contract documents

92
Q

When does the contractor have the right to terminate the contract?

A

If work has stopped, through no fault of the contractor, for a stipulated period of time. The Conditions of the Contract describe conditions under and procedures for doing so.

93
Q

The A/E has the right to withhold certification of the whole or any part of the payment application, in order to protect the owner.

A

withhold certification of the whole or any part of the payment application

94
Q

The A/E should recommend withholding payments that are _____.

A

only in the amount necessary to protect the owner from loss, and not in amounts constituting punitive damages

95
Q

Excessive withholding of payment by the A/E may _____.

A

be deemed as nonpayment and result in the contractor’s exercising the contractor’s right to stop work

96
Q

If the A/E determines that partial or whole payments should be withheld, general conditions require the architect to ____.

A

so notify the owner and contractor in writing

97
Q

Standard general conditions give authority to _________ to recommend the ______________________ for damaged or non–conforming work requiring repair or correction.

A

A/E; withholding of payment

98
Q

What must the owner do if he/she exercises their right to withhold payment?

A

Owner must give contractor written notice stating reasons for withholding payment and provide A/E with a copy of this notice.

99
Q

What helps to resolve problems and conflicts quickly during construction?

A

A good working relationship among the owner, A/E, and contractor with the primary focus on the quality of the construction.

100
Q

Who insists that the requirements of the contract documents are met by the contractor?

A

A/E

101
Q

How can the A/E help prevent delays or hardships for the contractor?

A

by providing timely responses

102
Q

What is true about communications to subcontractors from the A/E, consultants or owner?

A

Such communications should always pass through the contractor.

* The A/E should NOT give instructions to the contractor’s employees.

103
Q

The contractor is responsible to the owner for ____.

A

performance of said contract

104
Q

Informal oral communications should be ___.

A

documented in writing

105
Q

True or False

The A/E should give instructions to the contractor’s employees.

A

False

106
Q

Instructions from the A/E to anyone other than the contractor should be ______.

A

in writing; directed to the contractor’s project manager or superintendent who will direct the construction personnel

107
Q

Changes that do not affect the contract sum or time are minor changes in the work and may take the form of _________.

A

* substitutions

* supplemental instructions

* field orders

108
Q

Changes to contract sum or time require what?

A

a change order

109
Q

What do the standard general conditions prescribe as the role of the A/E?

A

* to act as the impartial interpreter of the documents

* to render decisions regarding the documents’ intent

110
Q

Information in drawings and specifications should _____.

A

compliment each other

111
Q

General Conditions of the Contract for Construction state what with regard to each of the contract documents?

A

The contract documents are complimentary; what is required by one is as binding as if required by all.

112
Q

How are Contract Documents defined?

A

“Legally enforceable requirements that become part of the contract when the agreement is executed.”

113
Q

Contracting Documents include:

A

* contracting forms

* specifications

* drawings

* addenda

* modifications

* conditions of the contract

114
Q

Summarize what AIA Document 201 states regarding the contract documents.

A

* Contract documents are intended to include all items necessary for the contractor to complete the work.

* What is required by one is as binding as if it were required by all

* The contractor is required to do only what is reasonably consistent with the contract documents and what is reasonably inferable as being required to produce the intended results

115
Q

What should the contractor do upon discovering an error or omission in the contract documents?

A

report the error or omission to the A/E (according to the conditions of the contract)

116
Q

What are the 3 items the A/E may issue as an interpretation of an error or omission which is reported by the contractor?

A
  1. interpretation
  2. minor change
  3. proposal request
117
Q

What should RFI’s be limited to?

A

requesting an interpretation of the documents; may also be a request for information that is missing

118
Q

According to CSI, what does RFI stand for?

A

Request for Interpretation (NOT information)

119
Q

Who may initiate an RFI?

A

owner or contractor

120
Q

RFIs allow the A/E to ____.

A

respond with an interpretation or minor change that does not require a change to the contract sum or time.

121
Q

RFIs allow the contractor or owner to ____.

A

inquire about an item of work insufficiently described or detailed in the contract documents and to seek an interpretation

122
Q

AIA Document 201 states that the Architect’s decisions regarding aesthetic effect are final, unless ____.

A

they are inconsistent with the intent expressed in the contract documents

123
Q

Excessive numbers of RFIs may be an indication of what?

A

* inadequate contract documents by the A/E

* incomplete study and comparison of the contract documents by the contractor

* evidence of ineffective use of project meetings

124
Q

If an item is not clearly indicated or reasonably infer–able, the A/E may respond to an RFI with a _____.

A

proposal request for a designated solution that anticipates an adjustment of the contract sum or time

125
Q

When should the A/E answer an RFI directly on the RFI form?

A

* if the form is designed for such a response

* if the response does not have an impact on the contract sum or time

126
Q

True or False

Modifications to the contract documents affecting the contract sum or time should be prepared as a minor change in the work.

A

False

127
Q

Why is it better to address issues not involving time or cost in project meetings than to issue RFIs?

A

Issues addressed in meeting are usually resolved quickly by responses documented in the minutes, whereas writing and responding to RFIs is time consuming.

128
Q

True or False

RFIs are a logical way to make a product, material, or system substitution.

A

False

* The contractor should not attempt to transfer the contractor’s responsibility for a timely and thorough review of the contract documents to the A/E through the issuance of RFI’s, or to attempt to make a substitution after expiration of the time limit for submitting requests for substitutions.

129
Q

True or False

RFIs and the responses to them should be referenced to the contract documents if possible.

A

True

130
Q

Prior to starting mobilization, what should be established?

A

site conditions

131
Q

Why is it important to establish the site conditions prior to starting construction activities?

A

The documented conditions establish the existing circumstances in case damage occurs to existing facilities or adjacent properties, or if unknown or concealed conditions are encountered later in the project.

132
Q

True or False

The geotechnical data and subsurface condition reports from boring logs are a part of the contract documents.

A

False

* geotechnical data should not be used as a basis for bid preparation concerning the site, and are not usually a part of the contract documents

133
Q

True or False

Drawings previously prepared for an existing facility’s construction may be included in Division 02–Existing Conditions.

A

True

134
Q

What is the benefit of including “Available Information”?

A

When the information is made available, it can reduce the likelihood of unknown or concealed conditions claims during the project.

135
Q

A. Identify construction issues and procedures for resolving them.
B. Interpret contract documents for compliance.
C. Notify parties of non-conforming work.
D. Review and determine legitimacy of a claim.
E. Review and process proposed changes for effect on cost, time, and quality.
F. Participate in the development of revisions, changes, additions, and deletions, related to the
enforcement of the construction contract.
G. Follow procedures for change order requests.
H. Evaluate change order requests.
I. Evaluate the effect of non-conforming work.
J. Participate in dispute resolution measures.

A
136
Q

What is included for photographs taken of existing conditions?

A

* date taken

* location

* description of the subject

137
Q

What is the benefit of recording pre–construction photographs?

A

* may assist in resolving disputes later in the project

* especially important in renovation/remodeling projects

138
Q

The contractor is required to supervise and direct the work when the contractor is under contract with the owner.

A

supervise and direct the work

139
Q

True or False

The contractor is required to ensure that the work is done according to the contract documents.

A

True

140
Q

Prior to performing subsequent work, what should the contractor do?

A

inspect each portion of previous work

141
Q

What should the contractor correlate a review of the contract documents with?

A

observed conditions at the site affecting the work

142
Q

True or False

The contractor should inspect work performed by the owner or separate contractor if the contractor’s work depends on that work.

A

True

143
Q

Who prepares and submits a comprehensive list of items to be completed or corrected prior to final payment?

A

Contractor

144
Q

Which documents require the contractor to visit the site to become familiar with existing conditions and to study and compare the contract documents?

A

* Bidding Requirements

* General Conditions

145
Q

True or False

The A/E is responsible for supervising the work.

A

False

146
Q

What is a form of arbitration that can be appealed in other venues?

A

Non–Binding Arbitration

147
Q

According to AIA Document 201, who has the authority to accept non–conforming work?

A

owner

148
Q

What party is responsible for substantiating a claim?

A

the party making the claim

149
Q

What are AIA instruments of change?

A

* Change Order

* Architect’s Supplemental Instructions

* Construction Change Directive

150
Q

Changes that affect cost or time may take the form of what?

A

change orders

151
Q

True or False

Orders for Minor Changes affect cost or time.

A

False

152
Q

True or False

The contract document stipulates that communication between the owner and contractor is through the A/E.

A

True

153
Q

In the absence of a A/E, who would fulfill the role of attempting to resolve disputes between the owner and the contractor?

A

“initial decision maker” (IDM)

154
Q

What terms bind work performed by subcontractors?

A

the same terms of the contract that bind the contractor

155
Q

What is a request for compensation for dealing with a situation that is different materially from what was anticipated by the parties at the time the contract was entered into?

A. dispute

B. claim

C. entitlement

D. query

A

B. claim

156
Q

True or False: The A/E is responsible for supervising the work.

A

False

157
Q

What is a form of arbitration that can be appealed in other venues?

A. Mediation

B. Mini–trial

C. Nonbinding arbitration

D. Judicial reference

A

C. Nonbinding arbitration

158
Q

According to AIA Document A201 who has the authority toaccept nonconforming work?

A. Architect

B. Contractor

C. Owner

D. Subcontractor

A

C. Owner

159
Q

What party is responsible for substantiating a claim?

A. The party defending the claim

B. The party making the claim

C. The appointed mediator

D. The Contractor

A

B. The party making the claim

160
Q

Which of the following are AIA instruments of change?

A. Change Order

B. Architect’s Supplemental Instructions

C. Construction Change Directive

D. All of the above

A

D. All of the above

161
Q

Changes that affect cost or time may take the form of:

A. Clarifications

B. Substitutions

C. Change Orders

D. Orders for minor changes

A

C. Change Orders

162
Q

True or False: In a traditional contract, even though the owner and the contractor have a direct contract, the contract document stipulates that communication between them is through the A/E.

A

True

163
Q

In the absence of a designated “initial decision maker”(IDM), who would fulfill the role of attempting to resolve disputes between theowner and the contractor?

A. Contractor

B. Owner

C. A/E

D. Arbitrator

A

C. A/E

164
Q

True or False: Work performed by subcontractors and suppliers is bound by the same terms of the contract that bind the contractor.

A

True

CeeCeeCeeAye (8 decks)

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