Edgar's Eye Yeah Eye Advanced Review

Question 1

AIA-A201, Article 1 General Provisions

Question: Written notice is considered duly served if delivered:

a. In person to the individual or officer of the business for which it was intended.
b. By means of certified mail to the last business address known to the party serving notice.
c. By courier service with proof of delivery.
d. All of the above.

Answer 1

Question: Written notice is considered duly served if delivered:

• a. In person to the individual or officer of the business for which it was intended.*
• b. By means of certified mail to the last business address known to the party serving notice.*
• c. By courier service with proof of delivery.*
• d. All of the above.*

Answer: d. All of the above.

1.6.1 Except as otherwise provided in Section 1.6.2, where the Contract Documents require one party to notify or give notice to the other party, such notice shall be provided in writing to the designated representative of the party to whom the notice is addressed and shall be deemed to have been duly served if delivered in person, by mail, by courier, or by electronic transmission if a method for electronic transmission is set forth in the Agreement.

Commentary: Section 1.6.1 indicates that you can send notice as required under the contract by electronic transmission, if that method of electronic transmission such as email is allowed in the agreement. That means for every agreement you sign, you need to amend or change the language to include the ability to send a notice via email. If you elect to send notices by some other form of electronic transmission, again, the agreement must be modified. In my judgment, the language should have been changed to include email as a default position as that is certainly the industry standard. On the other hand, since email traffic is so constant and so voluminous, requiring notice by certified mail certainly draws a reader’s attention to the importance of the correspondence. This revision, absent a change to the contract, also prevents the laborious arguments over whether a particular email meets the “notice” requirements as opposed to a mere status of the project, an inquiry, or other ordinary job correspondence.

Question 2

AIA-A201, Article 9 Payments and Completion

Question: The contractor shall pay each subcontractor the amount he is entitled no later than ten days after receipt of payment from the owner.

True or False

Answer 2

Question: The contractor shall pay each subcontractor the amount he is entitled no later than ten days after receipt of payment from the owner.

True or False

Answer: False

9.6.2 The Contractor shall pay each Subcontractor, no later than seven days after receipt of payment from the Owner, the amount to which the Subcontractor is entitled, reflecting percentages actually retained from payments to the Contractor on account of the Subcontractor’s portion of the Work. The Contractor shall, by appropriate agreement with each Subcontractor, require each Subcontractor to make payments to Sub-subcontractors in a similar manner.

Commentary: This precludes the contractor from using money received for subcontractors’ work for other purposes. It does not, however, imply that a subcontractor’s right to be paid for completed work is contingent upon the contractor’s receipt of payment from the owner. This is not a Pay If Paid clause. If the contractor has a legitimate question about the quality of a subcontractor’s work, the proper action would be for the contractor to adjust the application for payment submitted to the owner with regard to that subcontractor for that period. Funds already paid by the owner to the contractor for such subcontractors should either be paid to the subcontractor or returned to the owner. Unless otherwise provided in the subcontract agreement, the contractor may not retain from payments due to subcontractors more than the owner retains from payments due to the contractor relative to that. subcontractor’s work.

Question 3

AIA-A201, Article 9 Payments and Completion

Question: Upon request of a subcontractor the architect will, if feasible, furnish to him payment related information on his portion of the work completed, but limit information to:

a. Owner and architect action upon the amounts requested in the application for payment.
b. Contractor stated percentage of completion.
c. Contractor stated amount requested.
d. All of the above.
e. None of the above.

Answer 3

Question: Upon request of a subcontractor the architect will, if feasible, furnish to him payment related information on his portion of the work completed, but limit information to:

• a. Owner and architect action upon the amounts requested in the application for payment.*
• b. Contractor stated percentage of completion.*
• c. Contractor stated amount requested.*
• d. All of the above.*
• e. None of the above.*

Answer: d. All of the above.

9.6.3 The Architect will, on request, furnish to a Subcontractor, if practicable, information regarding percentages of completion or amounts applied for by the Contractor and action taken thereon by the Architect and Owner on account of portions of the Work done by such Subcontractor.

Commentary: This is one of very few direct contacts between the architect and subcontractors.

Question 4

AIA-A201, Article 9 Payments and Completion

Question: If the architect withholds certifications for payment due to the failure of the contractor to properly pay a subcontractor:

a. The owner may pay the subcontractor directly.
b. The owner may issue joint checks to the contractor and subcontractor’s equipment suppliers.
c. The owner may issue a joint check to the contractor and subcontractor, and then notify the architect to reflect the payment in the next certificate for payment.
d. All of the above.
e. None of the above.

Answer 4

Question: If the architect withholds certifications for payment due to the failure of the contractor to properly pay a subcontractor:

• a. The owner may pay the subcontractor directly.*
• b. The owner may issue joint checks to the contractor and subcontractor’s equipment suppliers.*
• c. The owner may issue a joint check to the contractor and subcontractor, and then notify the architect to reflect the payment in the next certificate for payment.*
• d. All of the above.*
• e. None of the above.*

Answer: c. The owner may issue a joint check to the contractor and subcontractor, and then notify the architect to reflect the payment in the next certificate for payment.

9.5.4 If the Architect withholds certification for payment under Section 9.5.1.3, the Owner may, at its sole option, issue joint checks to the Contractor and to any Subcontractor or supplier to whom the Contractor failed to make payment for Work properly performed or material or equipment suitably delivered. If the Owner makes payments by joint check, the Owner shall notify the Architect and the Contractor shall reflect such payment on its next Application for Payment.

Commentary: A joint check is a check made payable to both the contractor and the subcontractor or supplier who may not have received payment for labor or materials furnished for the project. Neither payee can cash or deposit the check in the absence of consent and endorsement by the other. In this way, satisfaction of a claim by a subcontractor or material supplier can be assured. Otherwise, when the contractor fails to make proper payment to subcontractors, the unpaid subcontractors have reasons to consider filing mechanic’s liens on the project. This provision allows the owner to protect the project from the filing of liens by paying the subcontractors by joint check.

Question 5

AIA-A201, Article 9 Payments and Completion

Question: Once a certificate for payment is issued, the owner will pay the contractor as stipulated in the contract documents and notify the architect payment was made.

True or False

Answer 5

Question: Once a certificate for payment is issued, the owner will pay the contractor as stipulated in the contract documents and notify the architect payment was made.

True or False

Answer: True

9.6.1 After the Architect has issued a Certificate for Payment, the Owner shall make payment in the manner and within the time provided in the Contract Documents, and shall so notify the Architect.

Commentary: The contractor can wait until ten days before the date when payment is due before submitting the application for payment. The architect then has up to seven days to review the application and take action. Thus, the owner may have as little as three days within which to make payment. If the owner needs more time to make payment, this should be covered in the supplementary conditions, if any, and in the owner-contractor agreement. Section 13.6 establishes the requirements for interest on late payments; interest begins to accrue on the date payment is due.

Question 6

AIA‐A201, Article 10 Protection of Persons and Property

Question: If a hazardous material or substance is encountered and not addressed in the contract documents and reasonable precautions will be inadequate to prevent foreseeable injury, the contractor shall:

a. Immediately stop work in the affected area.
b. Immediately notify the Owner and Architect of the condition.
c. Immediately notify the authorities having jurisdiction.
d. All of the above.
e. a and b.

Answer 6

Question: If a hazardous material or substance is encountered and not addressed in the contract documents and reasonable precautions will be inadequate to prevent foreseeable injury, the contractor shall:

• a. Immediately stop work in the affected area.*
• b. Immediately notify the Owner and Architect of the condition.*
• c. Immediately notify the authorities having jurisdiction.*
• d. All of the above.*
• e. a and b.*

Answer: e. a and b. Immediately stop work in the affected area. Immediately notify the Owner and Architect of the condition.

10.3.1 The Contractor is responsible for compliance with any requirements included in the Contract Documents regarding hazardous materials or substances. If the Contractor encounters a hazardous material or substance not addressed in the Contract Documents and if reasonable precautions will be inadequate to prevent foreseeable bodily injury or death to persons resulting from a material or substance, including but not limited to asbestos or polychlorinated biphenyl (PCB), encountered on the site by the Contractor, the Contractor shall, upon recognizing the condition, immediately stop Work in the affected area and notify the Owner and Architect of the condition.

Commentary: It is important for the health of those workers and others who may be exposed to hazardous materials that work stop promptly upon their discovery. The contract documents may recognize the existence of a hazardous material. The material may, in fact, be in the scope of the contractor’s work to remove or encapsulate. The contractor is not permitted to stop the work if the material is addressed in the contract documents, thereby putting the contractor on notice that the material exists on the site.

Question 7

AIA‐A201, Article 10 Protection of Persons and Property

Question: When use or storage of explosives or other hazardous materials are necessary for execution of the work of the contract, those activities are to be provided under supervision of properly qualified personnel.

True or False

Answer 7

Question: When use or storage of explosives or other hazardous materials are necessary for execution of the work of the contract, those activities are to be provided under supervision of properly qualified personnel.

True or False

Answer: True.

10.2.4 When use or storage of explosives or other hazardous materials or equipment, or unusual methods are necessary for execution of the Work, the Contractor shall exercise utmost care and carry on such activities under supervision of properly qualified personnel.

Commentary: The contractor and owner may, under some circumstances, be held strictly liable for harm resulting from use or storage of such hazardous materials—that is, liable even if they are not negligent.

Question 8

AIA‐A201, Article 10 Protection of Persons and Property

Question: Which of the following is the proper sequence for an Addendum?

a. Changes to Procurement Requirements, changes to previous Addenda, Changes to Conditions of the Contract, changes to the Agreement.
b. Changes to previous Addenda, changes to Procurement Requirements, changes to Agreements and other Contract Forms, changes to Drawings.
c. Changes to Drawings, changes to Specifications, changes to previous Addenda.
d. There is no “proper” sequence.

Answer 8

Question: Which of the following is the proper sequence for an Addendum?

• a. Changes to Procurement Requirements, changes to previous Addenda, Changes to Conditions of the Contract, changes to the Agreement.*
• b. Changes to previous Addenda, changes to Procurement Requirements, changes to Agreements and other Contract Forms, changes to Drawings.*
• c. Changes to Drawings, changes to Specifications, changes to previous Addenda.*
• d. There is no “proper” sequence.*

Answer: b. Changes to previous Addenda, changes to Procurement Requirements, changes to Agreements and other Contract Forms, changes to Drawings.

From the CSI Construction Specifications Education Program: Addenda Format: Arrange content of addenda in the same sequence as the project manual & drawings:

• Number & date
• Project Identification
• Name & address of A/E
• To whom Addenda is issued
• Opening remarks & notice to bidders or proposers
• Changes to prior addenda
• Change to procurement requirements
• Changes to contracting requirements
• Changes to specifications, in sequence
• Changes to drawings, in sequence

Question 9

AIA‐A201, Article 10 Protection of Persons and Property

Question: Which is not considered a modification to the contract documents?

a. Change Order.
b. Construction Change Directives/Work Change Directive.
c. Addendum.
d. Architect’s Supplemental Instructions.

Answer 9

Question: Which is not considered a modification to the contract documents?

• a. Change Order.*
• b. Construction Change Directives/Work Change Directive.*
• c. Addendum.*
• d. Architect’s Supplemental Instructions.*

Answer: c. Addendum.

This is a tricky question.

AIA® A701TM, Instructions to Bidders (1997), defines addenda as: 1.3 Addenda are written or graphic instruments issued by the Architect prior to the execution of the Contract which modify or interpret the Bidding Documents by additions, deletions, clarifications or corrections.

EJCDC® C-700, Standard General Conditions of the Construction Contract (2013), defines addenda similarly: Addenda—Written or graphic instruments issued prior to the opening of Bids which clarify, correct, or change the Bidding Requirements or the proposed Contract Documents.

Note:

Addenda are issued for a single purpose: to modify the bidding documents. If there is no modification, there is no addendum.

The Ins and Outs of Addenda
by Kevin O’Beirne, PE, CSI, CCS, CCCA

Managing Addenda and Contract Modifications
by David J. Wyatt, CSI, CCS, CCCA

From the CSI Construction Specifications Education Program:

INSTRUMENTS OF CHANGE

Procurement Stage: Changes documented by addenda issued to clarify, revise, add to, or delete info in procurement documents or in previous addenda.

Portions of addenda related to procurement documents only apply during procurement period

Portions of addenda related to contract documents incorporated into contract documents by listing addenda in executed agreement

Addenda: Typically issued prior to receipt & opening of bids or proposals.

• AIA Documents: Can be issued after bid & before contract execution (record negotiations); many states do not allow this.

Specifier typically responsible for preparing addenda

Construction Stage: Changes made to contract documents after agreement executed modify agreement by modifications.

AIA Modifications: Change order, change directive, and minor change in work (Architect’s Supplemental Instructions).

EJCDC Modifications: Change order, work change directive, field order, and written amendment.

Question 10

AIA‐A201, Article 10 Protection of Persons and Property

Question: Insurance protected claims against the contractor shall include those arising from:

a. The contractor’s operations.
b. The contractor’s completed operations for which he may be legally liable.
c. Acts by anyone directly or indirectly employed by the contractor and his subcontractors.
d. All of the above.
e. a and c.

Answer 10

Question: Insurance protected claims against the contractor shall include those arising from:

• a. The contractor’s operations.*
• b. The contractor’s completed operations for which he may be legally liable.*
• c. Acts by anyone directly or indirectly employed by the contractor and his subcontractors.*
• d. All of the above.*
• e. a and c.*

Answer: d. All of the above.

10.2.5 The Contractor shall promptly remedy damage and loss (other than damage or loss insured under property insurance required by the Contract Documents) to property referred to in Sections 10.2.1.2 and 10.2.1.3 caused in whole or in part by the Contractor, a Subcontractor, a Sub-subcontractor, or anyone directly or indirectly employed by any of them, or by anyone for whose acts they may be liable and for which the Contractor is responsible under Sections 10.2.1.2 and 10.2.1.3. The Contractor may make a Claim for the cost to remedy the damage or loss to the extent such damage or loss is attributable to acts or omissions of the Owner or Architect or anyone directly or indirectly employed by either of them, or by anyone for whose acts either of them may be liable, and not attributable to the fault or negligence of the Contractor. The foregoing obligations of the Contractor are in addition to the Contractor’s obligations under Section 3.18.

Question 11

AIA-A201, Article 11 Insurance and Bonds

Question: The contractor shall protect himself from claims by purchasing insurance from a company lawfully authorized to do business in the jurisdiction in which the project is located.

True or False

Answer 11

Question: The contractor shall protect himself from claims by purchasing insurance from a company lawfully authorized to do business in the jurisdiction in which the project is located.

True or False

Answer: False

11.2.1 The Owner shall purchase and maintain insurance of the types and limits of liability, containing the endorsements, and subject to the terms and conditions, as described in the Agreement or elsewhere in the Contract Documents. The Owner shall purchase and maintain the required insurance from an insurance company or insurance companies lawfully authorized to issue insurance in the jurisdiction where the Project is located.

Commentary: This is a requirement and not an option.

Question 12

AIA-A201, Article 11 Insurance and Bonds, 11.3 Property Insurance

Question: The owner may purchase insurance for the loss of use of his property. Whether or not he purchases this insurance, the owner waives all rights of action against the contractor for loss of use of his property due to fire or other causes.

True or False

Answer 12

Question: The owner may purchase insurance for the loss of use of his property. Whether or not he purchases this insurance, the owner waives all rights of action against the contractor for loss of use of his property due to fire or other causes.

True or False

Answer: True

11.4 Loss of Use, Business Interruption, and Delay in Completion Insurance. The Owner, at the Owner’s option, may purchase and maintain insurance that will protect the Owner against loss of use of the Owner’s property, or the inability to conduct normal operations, due to fire or other causes of loss. The Owner waives all rights of action against the Contractor and Architect for loss of use of the Owner’s property, due to fire or other hazards however caused.

Question 13

AIA-A201, Article 11 Insurance and Bonds

Answer 13

AIA Document A201 addresses issues of insurance and bonds in Article 11 and in the Insurance and Bonds Exhibit, which is Exhibit A to AIA Documents A101, A102, and A103. Section 11.2 of Document A201 and Article A.2 of the Insurance and Bonds Exhibit require the owner to carry standard liability insurance throughout the project. An owner would not be required to carry professional liability insurance. This document does not require the owner to include the architect and the contractor as additional insureds on the owner’s liability insurance policies.

Section A.2.3.1 of the Insurance and Bonds Exhibit requires the contractor to include the architect and owner as additional insureds on the contractor’s commercial liability coverage.

Section 11.4 of AIA Document A201 and Section A.2.4 of the Insurance and Bonds Exhibit discuss loss of use insurance. This coverage may be selected at the owner’s option but is not a contract requirement; if the owner agrees to provide this, it should be indicated on Exhibit A. However, the contract requires the owner to “waive all rights of action against the Contractor and Architect for loss of the Owner’s property, due to fire or other hazards however caused.”

The owner is required to purchase all-risk property insurance per Section A.2.3 of the Insurance and Bonds Exhibit. The owner may choose to purchase additional property insurance; if so, these policies should be indicated in Sections A.2.4 and A.2.5 of the Insurance and Bonds Exhibit.

Architects are not qualified to give clients advice regarding insurance coverage. Owners should be advised to consult with an attorney or insurance agent if they have questions about insurance recommendations for the project. After this consultation architects can use AIA Document G612, Owner’s Instructions to the Architect, to gather information about their client’s insurance requirements for the purposes of preparing the contract documents. – Kaplan

Question 14

AIA-A201, Article 11 Insurance and Bonds

Question: If the owner does not provide property insurance as required by the contract documents:

a. The owner will provide written notice to the contractor prior to commencement of the work of the contract.
b. The contractor may procure such property insurance and the cost be charged to the owner by means of a change order.
c. If the contractor is damaged as a result, the owner is responsible for costs attributable to his failure to comply with those requirements.
d. All of the above.
e. a and c.

Answer 14

Question: If the owner does not provide property insurance as required by the contract documents:

• a. The owner will provide written notice to the contractor prior to commencement of the work of the contract.*
• b. The contractor may procure such property insurance and the cost be charged to the owner by means of a change order.*
• c. If the contractor is damaged as a result, the owner is responsible for costs attributable to his failure to comply with those requirements.*
• d. All of the above.*
• e. a and c.*

Answer d. All of the above.

11.2.2 Failure to Purchase Required Property Insurance.

If the Owner fails to purchase and maintain the required property insurance, with all of the coverages and in the amounts described in the Agreement or elsewhere in the Contract Documents, the Owner shall inform the Contractor in writing prior to commencement of the Work. Upon receipt of notice from the Owner, the Contractor may delay commencement of the Work and may obtain insurance that will protect the interests of the Contractor, Subcontractors, and Sub-Subcontractors in the Work. When the failure to provide coverage has been cured or resolved, the Contract Sum and Contract Time shall be equitably adjusted. In the event the Owner fails to procure coverage, the Owner waives all rights against the Contractor, Subcontractors, and Subsubcontractors to the extent the loss to the Owner would have been covered by the insurance to have been procured by the Owner. The cost of the insurance shall be charged to the Owner by a Change Order. If the Owner does not provide written notice, and the Contractor is damaged by the failure or neglect of the Owner to purchase or maintain the required insurance, the Owner shall reimburse the Contractor for all reasonable costs and damages attributable thereto.

Commentary: No Comparable provision in 2007 Edition
If the Owner fails to purchase and maintain the required insurance, the Contractor has the right to delay commencement of the work. If the Owner fails to maintain the required insurance, it waives all rights against the Contractor and Subcontractors to the extent the Owner’s loss would have been covered by the required insurance. – Zurich Insurance, “Comparison of 2007 and 2017 AIA contract documents: Key changes in AIA A201™ and AIA B101™” https://www.zurichna.com/en/knowledge/articles/2017/10/comparison-of-2007-and-2017-aia-contract-documents

“Section 11.2.2 of AIA Document A201 states that if the owner fails to purchase property insurance, the contractor may delay the start of work and purchase insurance to protect their interests. In this case, the contract time and sum may be adjusted by change order. If the owner does not purchase required insurance and does not notify the contractor of this decision, the owner becomes responsible for all losses that the property insurance would have covered.” – Kaplan, Inc.

Question 15

Insurance and Bonds Exhibit

Question: Contractor’s certificates of insurance shall be:

a. Filed with the owner prior to the commencement of the work.
b. Acceptable to the owner.
c. Filed with the owner during the execution of the work when a policy is renewed or replaced.
d. All of the above.
e. a and c.

Answer 15

Question: Contractor’s certificates of insurance shall be:

• a. Filed with the owner prior to the commencement of the work.*
• b. Acceptable to the owner.*
• c. Filed with the owner during the execution of the work when a policy is renewed or replaced.*
• d. All of the above.*
• e. a and c.*

Answer: b. Acceptable to the owner.

A.3.1.1 Certificates of Insurance. The Contractor shall provide certificates of insurance acceptable to the Owner
 evidencing compliance with the requirements in this Article A.3 at the following times: (1) prior to commencement of
 the Work; (2) upon renewal or replacement of each required policy of insurance; and (3) upon the Owner’s written
 request. An additional certificate evidencing continuation of commercial liability coverage, including coverage for 
completed operations, shall be submitted with the final Application for Payment and thereafter upon renewal or 
replacement of such coverage until the expiration of the periods required by Section A.3.2.1 and Section A.3.3.1. The
 certificates will show the Owner as an additional insured on the Contractor’s Commercial General Liability and excess
or umbrella liability policy or policies.

Question 16

Insurance and Bonds Exhibit

Question: Property insurance shall cover portions of the work stored off the site, but not portions of the work in transit.

True or False

Answer 16

Question: Property insurance shall cover portions of the work stored off the site, but not portions of the work in transit.

True or False

Answer: False

A.3.3.2 The Contractor shall purchase and maintain the following types and limits of insurance in accordance with Section A.3.3.1.

(Long list…)

A.3.3.2.4 Insurance for physical damage to property while it is in storage and in transit to the construction site on an “all-risks” completed value form.

Question 17

Insurance and Bonds Exhibit

Question: If the property insurance requires deductibles, the owner shall pay costs not covered in the deductibles.

True or False

Answer 17

Question: If the property insurance requires deductibles, the owner shall pay costs not covered in the deductibles.

True or False

Answer: True

A.2.3.1.4 Deductibles and Self-Insured Retentions.

If the insurance required by this Section A.2.3 is subject to deductibles or self-insured retentions, the Owner shall be responsible for all loss not covered because of such deductibles or retentions.

Commentary: These costs are assigned to the owner, who directly obtains the benefit of the lower premiums associated with the deductibles.

Question 18

Insurance and Bonds Exhibit

Question: Property insurance shall be on an “all-risk” or equivalent policy form and shall cover reasonable compensation for architect’s and contractor’s services and expenses resulting from an insured loss.

True or False

Answer 18

Question: Property insurance shall be on an “all-risk” or equivalent policy form and shall cover reasonable compensation for architect’s and contractor’s services and expenses resulting from an insured loss.

True or False

Answer: True

A.2.3.1.2 Specific Required Coverages.

The insurance required by this Section A.2.3.1 shall provide coverage for loss or damage to falsework and other temporary structures, and to building systems from testing and startup. The insurance shall also cover debris removal, including demolition occasioned by enforcement of any applicable legal requirements, and reasonable compensation for the Architect’s and Contractor’s services and expenses required as a result of such insured loss, including claim preparation expenses.

Question 19

AIA-A201, Article 12 Uncovering and Correction of Work, 12.2.2 After Substantial Completion

Question: Contractor shall promptly correct work found to be not in accordance with the contract documents upon receipt of written notice from the owner within one year after the date of:

a. Substantial completion of the work.
b. Commencement of warranties.
c. a or b.

Answer 19

Question: Contractor shall promptly correct work found to be not in accordance with the contract documents upon receipt of written notice from the owner within one year after the date of:

• a. Substantial completion of the work.*
• b. Commencement of warranties.*
• c. a or b.*

Answer: c. a or b.

12.2.2.1 In addition to the Contractor’s obligations under Section 3.5, if, within one year after the date of Substantial Completion of the Work or designated portion thereof or after the date for commencement of warranties established under Section 9.9.1, or by terms of any applicable special warranty required by the Contract Documents, any of the Work is found to be not in accordance with the requirements of the Contract Documents, the Contractor shall correct it promptly after receipt of notice from the Owner to do so, unless the Owner has previously given the Contractor a written acceptance of such condition. The Owner shall give such notice promptly after discovery of the condition.

During the one-year period for correction of Work, if the Owner fails to notify the Contractor and give the Contractor an opportunity to make the correction, the Owner waives the rights to require correction by the Contractor and to make a claim for breach of warranty. If the Contractor fails to correct nonconforming Work within a reasonable time during that period after receipt of notice from the Owner or Architect, the Owner may correct it in accordance with Section 2.5.

Commentary: The contractor’s warranty extends until the expiration of the applicable statute of limitations period. The correction period described in Section 12.2.2 is a separate remedy for nonconforming work. To avoid misunderstandings, the introductory language makes it clear that the one-year correction period is in addition to, and not in lieu of, the contractor’s warranty obligations. During the correction period, the owner must give the contractor prompt notice of and the opportunity to correct work discovered not to have been performed in accordance with the contract documents. Thereafter, the owner may have the corrective work performed by anyone selected by the owner. During the one-year correction period, the contractor has the right to be notified about defective work. If the owner discovers nonconforming work and fails to notify the contractor, the owner waives its right against the contractor to require correction of that work and its warranty right with respect to that work. The contractor must act to correct work within a reasonable time.

Question 20

AIA-A201, Article 12 Uncovering and Correction of Work, 12.2.2 After Substantial Completion

Question: Contractor is not obligated to correct specific work found not to be in accordance with the contract documents if the architect has previously given the contractor a written acceptance of the condition of that work.

True or False

Answer 20

Question: Contractor is not obligated to correct specific work found not to be in accordance with the contract documents if the architect has previously given the contractor a written acceptance of the condition of that work.

True or False

Answer: False

12.2.2.1 In addition to the Contractor’s obligations under Section 3.5, if, within one year after the date of Substantial Completion of the Work or designated portion thereof or after the date for commencement of warranties established under Section 9.9.1, or by terms of an applicable special warranty required by the Contract Documents, any of the Work is found to be not in accordance with the requirements of the Contract Documents, the Contractor shall correct it promptly after receipt of written notice from the Owner to do so unless the Owner has previously given the Contractor a written acceptance of such condition. The Owner shall give such notice promptly after discovery of the condition. During the one-year period for correction of Work, if the Owner fails to notify the Contractor and give the Contractor an opportunity to make the correction, the Owner waives the rights to require correction by the Contractor and to make a claim for breach of warranty. If the Contractor fails to correct nonconforming Work within a reasonable time during that period after receipt of notice from the Owner or Architect, the Owner may correct it in accordance with Section 2.4.

Commentary: The contractor’s warranty extends until the expiration of the applicable statute of limitations period. The correction period described in Section 12.2.2 is a separate remedy for nonconforming work. To avoid misunderstandings, the introductory language makes it clear that the one-year correction period is in addition to, and not in lieu of, the contractor’s warranty obligations. During the correction period, the owner must give the contractor prompt notice of and the opportunity to correct work discovered not to have been performed in accordance with the contract documents. Thereafter, the owner may have the corrective work performed by anyone selected by the owner. During the one-year correction period, the contractor has the right to be notified about defective work. If the owner discovers nonconforming work and fails to notify the contractor, the owner waives its right against the contractor to require correction of that work and its warranty right with respect to that work. The contractor must act to correct work within a reasonable time.

Question 21

AIA-A201, Article 12 Uncovering and Correction of Work, 12.2.1 Before and After Substantial Completion

Question: Contractor, at his cost and time, will correct work rejected by the owner or failing to conform to the requirements of the contract documents, whether discovered before or after substantial completion of the contract for construction.

True or False

Answer 21

Question: Contractor, at his cost and time, will correct work rejected by the owner or failing to conform to the requirements of the contract documents, whether discovered before or after substantial completion of the contract for construction.

True or False

Answer: False

• 12.2* Correction of Work
• 12.2.1* Before or After Substantial Completion
• 12.2.1.1* The Contractor shall promptly correct Work rejected by the Architect or failing to conform to the requirements of the Contract Documents, whether discovered before or after Substantial Completion and whether or not fabricated, installed or completed. Costs of correcting such rejected Work, including additional testing and inspections, the cost of uncovering and replacement, and compensation for the Architect’s services and expenses made necessary thereby, shall be at the Contractor’s expense.

Commentary: Work that does not meet the requirements of the contract documents may be rejected even if it has not yet been installed or is only partially completed. The architect also has the option of advising the contractor that work in process, if continued, will not produce acceptable results. The contractor must correct work that does not conform to the requirements of the contract documents even if such work has not been rejected by the architect. Under Section 12.2.4, such costs include costs of removing, replacing and repairing other work or construction of the owner or separate contractors as needed to correct rejected or nonconforming work.

Question 22

AIA-A201, Article 12 Uncovering and Correction of Work, 12.2.1 Before Substantial Completion

Question: Costs for rejected work to be borne by the contractor include:

a. Additional testing and inspection expenses.
b. The cost of uncovering and replacing compliant work concealing rejected work.
c. Compensation for architect and his consultants’ services and expenses necessary to address non-conforming work.
d. All of the above.
e. a and b.

Answer 22

Question: Costs for rejected work to be borne by the contractor include:

• a. Additional testing and inspection expenses.*
• b. The cost of uncovering and replacing compliant work concealing rejected work.*
• c. Compensation for architect and his consultants’ services and expenses necessary to address non-conforming work.*
• d. All of the above.*
• e. a and b.*

Answer: d. All of the above.

• 12.2* Correction of Work
• 12.2.1* Before or After Substantial Completion
• 12.2.1.1* The Contractor shall promptly correct Work rejected by the Architect or failing to conform to the requirements of the Contract Documents, whether discovered before or after Substantial Completion and whether or not fabricated, installed or completed. Costs of correcting such rejected Work, including additional testing and inspections, the cost of uncovering and replacement, and compensation for the Architect’s services and expenses made necessary thereby, shall be at the Contractor’s expense.

Commentary: Work that does not meet the requirements of the contract documents may be rejected even if it has not yet been installed or is only partially completed. The architect also has the option of advising the contractor that work in process, if continued, will not produce acceptable results. The contractor must correct work that does not conform to the requirements of the contract documents even if such work has not been rejected by the architect. Under Section 12.2.4, such costs include costs of removing, replacing and repairing other work or construction of the owner or separate contractors as needed to correct rejected or nonconforming work.

Question 23

AIA-A201, Article 12 Uncovering and Correction of Work, Article 12.1 Uncovering the Work

Question: If work is covered by subsequent construction contrary to architect’s prior request or contract requirements to examine prior to concealment, contractor at his time and expense, will uncover and replace removed construction upon written request for examination by architect.

True or False

Answer 23

Question: If work is covered by subsequent construction contrary to architect’s prior request or contract requirements to examine prior to concealment, contractor at his time and expense, will uncover and replace removed construction upon written request for examination by architect.

True or False

Answer: True

• 12.1* Uncovering of Work
• 12.1.1* If a portion of the Work is covered contrary to the Architect’s request or to requirements specifically expressed in the Contract Documents, it must, if requested in writing by the Architect, be uncovered for the Architect’s examination and be replaced at the Contractor’s expense without change in the Contract Time.

Commentary: The contract documents should list clearly those items the architect expects to examine before they are covered.

Question 24

AIA-A201, Article 12 Uncovering and Correction of Work, Article 12.1 Uncovering the Work

Question: If work is covered that was not specifically requested or required to be examined prior to being covered and architect requests contractor to uncover for examination:

a. Contractor will uncover and recover at owner’s expense.
b. Contractor will uncover and recover at contractor’s expense.
c. Contractor will uncover and recover at architect’s expense.
d. Contractor will uncover and recover at architect’s expense if the work is found to be compliant with the contract documents.
e. None of the above.

Answer 24

Question: If work is covered that was not specifically requested or required to be examined prior to being covered and architect requests contractor to uncover for examination:

• a. Contractor will uncover and recover at owner’s expense.*
• b. Contractor will uncover and recover at contractor’s expense.*
• c. Contractor will uncover and recover at architect’s expense.*
• d. Contractor will uncover and recover at architect’s expense if the work is found to be compliant with the contract documents.*
• e. None of the above.*

Answer: e. None of the above.

• 12.1* Uncovering of Work
• 12.1.2* If a portion of the Work has been covered that the Architect has not specifically requested to examine prior to its being covered, the Architect may request to see such Work and it shall be uncovered by the Contractor. If such Work is in accordance with the Contract Documents, the Contractor shall be entitled to an equitable adjustment to the Contract Sum and Contract Time as may be appropriate. If such Work is not in accordance with the Contract Documents, the costs of uncovering the Work, and the cost of correction, shall be at the Contractor’s expense.

Commentary: Ultimate responsibility for the cost of uncovering, testing and replacing questioned work under this section depends upon whether the uncovered work complies with the contract documents.

Question 25

AIA-A201, Article 10 Protection of Persons and Property, 10.3 Hazardous Materials

Question: The contractor shall indemnify the owner for expenses, except to the extent are due to owner’s fault or negligence:

a. If contractor does not comply with requirements for hazardous materials.
b. If contractor does not notify the owner and architect upon discovery of a hazardous material not addressed in the CDs.
c. If contractor brings hazardous material to the site and handles negligently.
d. All of the above.
e. a and c.

Answer 25

Question: The contractor shall indemnify the owner for expenses, except to the extent are due to owner’s fault or negligence:

• a. If contractor does not comply with requirements for hazardous materials.*
• b. If contractor does not notify the owner and architect upon discovery of a hazardous material not addressed in the CDs.*
• c. If contractor brings hazardous material to the site and handles negligently.*
• d. All of the above.*
• e. a and c.*

Answer: d. All of the above.

10.3.1 The Contractor is responsible for compliance with any requirements included in the Contract Documents regarding hazardous materials or substances. If the Contractor encounters a hazardous material or substance not addressed in the Contract Documents and if reasonable precautions will be inadequate to prevent foreseeable bodily injury or death to persons resulting from a material or substance, including but not limited to asbestos or polychlorinated biphenyl (PCB), encountered on the site by the Contractor, the Contractor shall, upon recognizing the condition, immediately stop Work in the affected area and notify the Owner and Architect of the condition.

Commentary: It is important for the health of those workers and others who may be exposed to hazardous materials that work stop promptly upon their discovery.

The contract documents may recognize the existence of a hazardous material. The material may, in fact, be in the scope of the contractor’s work to remove or encapsulate. The contractor is not permitted to stop the work if the material is addressed in the contract documents, thereby putting the contractor on notice that the material exists on the site.

Question 26

AIA-A201, Article 10 Protection of Persons and Property, 10.3 Hazardous Materials

Question: Once a hazardous material or substance is encountered and notice made by the contractor:

a. The owner will propose to the contractor and architect the names and qualifications of the entities to remediate the hazard and they are to promptly write back whether or not they object to those entities.
b. Contractor or architect will propose to owner acceptable entities to remediate the hazard(s) for his acceptance.
c. Upon remediation of hazard, contract time and sum will be increased by change order for reasonable additional time and costs resulting from the discovery.
d. a and c.

Answer 26

Question: Once a hazardous material or substance is encountered and notice made by the contractor:

• a. The owner will propose to the contractor and architect the names and qualifications of the entities to remediate the hazard and they are to promptly write back whether or not they object to those entities.*
• b. Contractor or architect will propose to owner acceptable entities to remediate the hazard(s) for his acceptance.*
• c. Upon remediation of hazard, contract time and sum will be increased by change order for reasonable additional time and costs resulting from the discovery.*
• d. a and c.*

Answer: d. a and c.

10.3.2 Upon receipt of the Contractor’s notice, the Owner shall obtain the services of a licensed laboratory to verify the presence or absence of the material or substance reported by the Contractor and, in the event such material or substance is found to be present, to cause it to be rendered harmless. Unless otherwise required by the Contract Documents, the Owner shall furnish in writing to the Contractor and Architect the names and qualifications of persons or entities who are to perform tests verifying the presence or absence of the material or substance or who are to perform the task of removal or safe containment of the material or substance. The Contractor and the Architect will promptly reply to the Owner in writing stating whether or not either has reasonable objection to the persons or entities proposed by the Owner. If either the Contractor or Architect has an objection to a person or entity proposed by the Owner, the Owner shall propose another to whom the Contractor and the Architect have no reasonable objection. When the material or substance has been rendered harmless, Work in the affected area shall resume upon written agreement of the Owner and Contractor. By Change Order, the Contract Time shall be extended appropriately and the Contract Sum shall be increased by the amount of the Contractor’s reasonable additional costs of shutdown, delay, and start-up.

Commentary: If the contractor has notified the owner in writing that a hazardous material is present, the owner must retain a qualified laboratory to verify whether such material is present. If hazardous materials do exist, the owner must arrange for their removal or remediation. The owner cannot require the contractor to perform this service, though the contractor may agree to do it by change order. The owner and contractor may choose to negotiate an appropriate adjustment in contract price and time, associated with shut-down, delay, and start-up, or the contractor may assert a claim if no negotiated agreement can be reached. Unlike most other claims, claims relating to hazardous materials are not referred to the architect or other designated initial decision maker for initial determination, but proceed directly to mediation and then to binding dispute resolution. (See Section 15.2.) Once it is deemed safe to do so, work may resume according to the written agreement of the owner and contractor.

Question 27

AIA-A201, Article 10 Protection of Persons and Property, 10.3 Hazardous Materials

Question: The contractor is responsible for compliance with any requirements included in the contract documents regarding hazardous materials.

True or False

Answer 27

Question: The contractor is responsible for compliance with any requirements included in the contract documents regarding hazardous materials.

True or False

Answer: True

10.3.1 The Contractor is responsible for compliance with any requirements included in the Contract Documents regarding hazardous materials or substances. If the Contractor encounters a hazardous material or substance not addressed in the Contract Documents and if reasonable precautions will be inadequate to prevent foreseeable bodily injury or death to persons resulting from a material or substance, including but not limited to asbestos or polychlorinated biphenyl (PCB), encountered on the site by the Contractor, the Contractor shall, upon recognizing the condition, immediately stop Work in the affected area and notify the Owner and Architect of the condition

Commentary: It is important for the health of those workers and others who may be exposed to hazardous materials that work stop promptly upon their discovery. The contract documents may recognize the existence of a hazardous material. The material may, in fact, be in the scope of the contractor’s work to remove or encapsulate. The contractor is not permitted to stop the work if the material is addressed in the contract documents, thereby putting the contractor on notice that the material exists on the site.

Question 28

AIA-A201, Article 12 Uncovering and Correction of Work, 12.2.2 After Substantial Completion

Question: For portions of work performed after the date of substantial completion, the one-year correction period:

a. Shall commence upon completion of all work of the contract.
b. Shall be extended to one year after actual completion for that portion of work; and for that portion of work only.
c. Shall be unaffected.

Answer 28

Question: For portions of work performed after the date of substantial completion, the one-year correction period:

• a. Shall commence upon completion of all work of the contract.*
• b. Shall be extended to one year after actual completion for that portion of work; and for that portion of work only.*
• c. Shall be unaffected.*

Answer: b. Shall be extended to one year after actual completion for that portion of work; and for that portion of work only.

12.2.2.2 The one-year period for correction of Work shall be extended with respect to portions of Work first performed after Substantial Completion by the period of time between Substantial Completion and the actual completion of that portion of the Work.

Commentary: Work first performed after substantial completion is also subject to a one-year correction period, in effect extending the correction period with respect to that work.

Question 29

AIA-A201, Article 12 Correction of Work, 12.2.2 After Substantial Completion

Question: The one-year period for correction of work shall not be extended by corrective work performed by the contractor during the corrective period.

True or False

Answer 29

Question: The one-year period for correction of work shall not be extended by corrective work performed by the contractor during the corrective period.

True or False

• *Answer**: True
• 12.2.2.3* The one-year period for correction of Work shall not be extended by corrective Work performed by the Contractor pursuant to this Section 12.2.

Commentary: When work corrected by the contractor during the correction period needs further correction more than one year after substantial completion, the owner is not obligated to notify the contractor again, but may have the work performed by others. In such an event, the owner may file a proceeding for binding dispute resolution against the contractor if not time-barred under Section 13.7.

The contractor’s activities in correcting work do not extend the correction period.

Question 30

AIA-A201, Article 12 Uncovering and Correction of Work, 12.2.2 After Substantial Completion

Question: The contractor shall bear the cost of correcting damaged construction:

a. Resulting from separate contractor’s correction of work.
b. Of separate contractor’s due to contractor’s removal of work not in accordance with the contract documents.
c. Due to contractor’s removal of compliant work rejected by the owner.
d. All of the above.

Answer 30

Question: The contractor shall bear the cost of correcting damaged construction:

• a. Resulting from separate contractor’s correction of work.*
• b. Of separate contractor’s due to contractor’s removal of work not in accordance with the contract documents.*
• c. Due to contractor’s removal of compliant work rejected by the owner.*
• d. All of the above.*

Answer: b. Of separate contractor’s due to contractor’s removal of work not in accordance with the contract documents.

12.2.4 The Contractor shall bear the cost of correcting destroyed or damaged construction of the Owner or Separate Contractors, whether completed or partially completed, caused by the Contractor’s correction or removal of Work that is not in accordance with the requirements of the Contract Documents.

Question 31

AIA-A201, Article 12 Uncovering and Correction of Work, 12.2.2 After Substantial Completion

Question: The architect may accept work not complying with the contract documents instead of requiring removal or correction, but the contract sum will be reduced as appropriate and equitable, whether or not final payment has been made.

True or False

Answer 31

Question: The architect may accept work not complying with the contract documents instead of requiring removal or correction, but the contract sum will be reduced as appropriate and equitable, whether or not final payment has been made.

True or False

Answer: False

12.3 Acceptance of Nonconforming Work

If the Owner prefers to accept Work that is not in accordance with the requirements of the Contract Documents, the Owner may do so instead of requiring its removal and correction, in which case the Contract Sum will be reduced as appropriate and equitable. Such adjustment shall be effected whether or not final payment has been made.

Commentary: Only the owner can accept nonconforming work because such acceptance constitutes a change in the contract. If the contract sum is to be reduced, this must be done by a change order.

Question 32

AIA-A201, Article 13 Miscellaneous Provisions

Question: The owner may assign the contract for construction to the project’s construction finance lender:

a. With the consent of the contractor.
b. Without consent of the contractor if the lender assumes the owner’s obligations.
c. Without consent of the contractor, but remain legally responsible for his contractual obligations.
d. All of the above.
e. None of the above.

Answer 32

Question: The owner may assign the contract for construction to the project’s construction finance lender:

• a. With the consent of the contractor.*
• b. Without consent of the contractor if the lender assumes the owner’s obligations.*
• c. Without consent of the contractor, but remain legally responsible for his contractual obligations.*
• d. All of the above.*
• e. None of the above.*

Answer: d. All of the above.

13.2.2 The Owner may, without consent of the Contractor, assign the Contract to a lender providing construction financing for the Project, if the lender assumes the Owner’s rights and obligations under the Contract Documents. The Contractor shall execute all consents reasonably required to facilitate the assignment.

Commentary: This is an exception to prohibition of assignment of the contract as a whole, as discussed in Section 13.2.1. Institutional lenders often require contingent assignment of the contract as a condition of the construction loan. Without this provision, the project might have to be terminated by the owner, who may not be able to finance the project without such an assignment. On the other hand, the lender cannot condition the assignment on any waiver of rights on the part of the contractor, such as the right to be paid by the lender for pre-default sums due and owing the contractor.

Question 33

AIA-A201, Article 13 Miscellaneous Provisions

Question: No action or failure to act by the owner, architect or contractor is considered to be a waiver of rights or duties as stated in the contract for construction.

True or False

Answer 33

Question: No action or failure to act by the owner, architect or contractor is considered to be a waiver of rights or duties as stated in the contract for construction.

True or False

Answer: True

13.3.2 No action or failure to act by the Owner, Architect, or Contractor shall constitute a waiver of a right or duty afforded them under the Contract, nor shall such action or failure to act constitute approval of or acquiescence in a breach thereunder, except as may be specifically agreed upon in writing

Commentary: This provision avoids having the contract modified by a party’s action or failure to act.

Question 34

AIA-A201, Article 13 Miscellaneous Provisions

Question: Unless otherwise provided, the contractor makes arrangements for all tests, inspections and approvals:

a. And bears all of the related costs.
b. With independent testing laboratories.
c. With authorities having jurisdiction.
d. All of the above.

Answer 34

Question: Unless otherwise provided, the contractor makes arrangements for all tests, inspections and approvals:

• a. And bears all of the related costs.*
• b. With independent testing laboratories.*
• c. With authorities having jurisdiction.*
• d. All of the above.*

Answer: b.

13.4.1 Tests, inspections, and approvals of portions of the Work shall be made as required by the Contract Documents and by applicable laws, statutes, ordinances, codes, rules, and regulations or lawful orders of public authorities. Unless otherwise provided, the Contractor shall make arrangements for such tests, inspections, and approvals with an independent testing laboratory or entity acceptable to the Owner, or with the appropriate public authority, and shall bear all related costs of tests, inspections, and approvals. The Contractor shall give the Architect timely notice of when and where tests and inspections are to be made so that the Architect may be present for such procedures. The Owner shall bear costs of tests, inspections, or approvals that do not become requirements until after bids are received or negotiations concluded. The Owner shall directly arrange and pay for tests, inspections, or approvals where building codes or applicable laws or regulations so require.

Commentary: Normally, the contractor may not conduct tests and inspections or grant approvals of its own work. In some jurisdictions, the contractor may not even hire the independent testing or inspection agency for this purpose. Additionally, certain building codes proscribe the owner’s delegating the costs of some tests to the contractor.

Question 35

AIA-A201, Article 13 Miscellaneous Provisions

Question: The owner bears the costs of tests, inspections and approvals that become requirements after bids are received.

True or False

Answer 35

Question: The owner bears the costs of tests, inspections and approvals that become requirements after bids are received.

True or False

Answer: True

13.4.1 Tests, inspections, and approvals of portions of the Work shall be made as required by the Contract Documents and by applicable laws, statutes, ordinances, codes, rules, and regulations or lawful orders of public authorities. Unless otherwise provided, the Contractor shall make arrangements for such tests, inspections, and approvals with an independent testing laboratory or entity acceptable to the Owner, or with the appropriate public authority, and shall bear all related costs of tests, inspections, and approvals. The Contractor shall give the Architect timely notice of when and where tests and inspections are to be made so that the Architect may be present for such procedures. The Owner shall bear costs of tests, inspections, or approvals that do not become requirements until after bids are received or negotiations concluded. The Owner shall directly arrange and pay for tests, inspections, or approvals where building codes or applicable laws or regulations so require.

Commentary: Normally, the contractor may not conduct tests and inspections or grant approvals of its own work. In some jurisdictions, the contractor may not even hire the independent testing or inspection agency for this purpose. Additionally, certain building codes proscribe the owner’s delegating the costs of some tests to the contractor.

Question 36

AIA-A201, Article 13 Miscellaneous Provisions

Question: If an AHJ determines a portion of the work requires additional testing:

a. Contractor makes arrangement for such testing.
b. Architect makes arrangement for such testing.
c. Architect, upon written authorization from the owner, instructs the contractor to makes arrangement for such testing.
d. Either a or b.

Answer 36

Question: If an AHJ determines a portion of the work requires additional testing:

• a. Contractor makes arrangement for such testing.*
• b. Architect makes arrangement for such testing.*
• c. Architect, upon written authorization from the owner, instructs the contractor to makes arrangement for such testing.*
• d. Either a or b.*

Answer: c. Architect, upon written authorization from the owner, instructs the contractor to makes arrangement for such testing.

13.4.2 If the Architect, Owner, or public authorities having jurisdiction determine that portions of the Work require additional testing, inspection, or approval not included under Section 13.4.1, the Architect will, upon written authorization from the Owner, instruct the Contractor to make arrangements for such additional testing, inspection, or approval, by an entity acceptable to the Owner, and the Contractor shall give timely notice to the Architect of when and where tests and inspections are to be made so that the Architect may be present for such procedures. Such costs, except as provided in Section 13.4.3, shall be at the Owner’s expense.

Commentary: This section covers special tests, inspections or approvals determined to be necessary due to developments in the course of construction. For example, tests on one part of the work may call into question the integrity of other parts.

Question 37

AIA-A201, Article 13 Miscellaneous Provisions

Question: The contractor gives the architect timely notice of tests and inspections as requested by the architect so that he may be present for such procedures.

True or False

Answer 37

Question: The contractor gives the architect timely notice of tests and inspections as requested by the architect so that he may be present for such procedures.

True or False

Answer: False

• 13.4* Tests and Inspections
• 13.4.2* If the Architect, Owner, or public authorities having jurisdiction determine that portions of the Work require additional testing, inspection, or approval not included under Section 13.4.1, the Architect will, upon written authorization from the Owner, instruct the Contractor to make arrangements for such additional testing, inspection, or approval, by an entity acceptable to the Owner, and the Contractor shall give timely notice to the Architect of when and where tests and inspections are to be made so that the Architect may be present for such procedures. Such costs, except as provided in Section 13.4.3, shall be at the Owner’s expense.

Question 38

AIA-A201, Article 13 Miscellaneous Provisions

Question: The contractor is entitled to interest at the legal prevailing rate on payment received after the contractual due date; unless another rate is agreed upon.

True or False

Answer 38

Question: The contractor is entitled to interest at the legal prevailing rate on payment received after the contractual due date; unless another rate is agreed upon.

True or False

Answer: True

13.5 Interest

Payments due and unpaid under the Contract Documents shall bear interest from the date payment is due at the rate the parties agree upon in writing or, in the absence thereof, at the legal rate prevailing from time to time at the place where the Project is located.

Commentary: To avoid confusion as to what the rate prevailing from time to time is, an agreed-upon rate of interest may be stated in the agreement. The parties should consult legal counsel regarding usury laws and other federal and state requirements that may apply. AIA Owner-Contractor agreement forms have a specific section where the agreed upon rate of interest may be entered.

Question 39

AIA-A201, Article 13 Miscellaneous Provisions

Question: Construction tests and inspections tests and inspections are to be made promptly to avoid delays.

True or False

Answer 39

Question: Construction tests and inspections tests and inspections are to be made promptly to avoid delays.

True or False

Answer: True

13.4.6 Tests or inspections conducted pursuant to the Contract Documents shall be made promptly to avoid unreasonable delay in the Work.

Question 40

AIA-A201, Article 13 Miscellaneous Provisions

Question: If the architect performs construction tests and inspections, he does so promptly and, where practicable, at the normal place of testing.

True or False

Answer 40

Question: If the architect performs construction tests and inspections, he does so promptly and, where practicable, at the normal place of testing.

True or False

Answer: False

The architect observes construction tests and inspections and typically limits CCA inspections to two: to determine substantial completion and final completion of the construction work in accordance with the contract documents.

13.4.5 If the Architect is to observe tests, inspections, or approvals required by the Contract Documents, the Architect will do so promptly and, where practicable, at the normal place of testing.

Question 41

AIA-A201, Article 14 Termination or Suspension of the Contract

Question: The contractor may terminate the contract for construction if the work is stopped for 30 consecutive days, through no fault of the contractor or those performing work on his behalf, for the following reasons:

a. Receipt of an order by an AHJ to stop work on a critical portion of the ALL work.
b. Because the architect has not issued a certificate for payment without notification of reason for withholding certification.
c. Because the owner has not made payment on a certificate of payment in a time period acceptable to the surety REQUIRED IN THE CONTRACT DOCUMENTS.
d. All of the above.
e. None of the above.

Answer 41

Question: The contractor may terminate the contract for construction if the work is stopped for 30 consecutive days, through no fault of the contractor or those performing work on his behalf, for the following reasons:

• a. Receipt of an order by an AHJ to stop work on a critical portion of the ALL work.*
• b. Because the architect has not issued a certificate for payment without notification of reason for withholding certification.*
• c. Because the owner has not made payment on a certificate of payment in a time period acceptable to the surety REQUIRED IN THE CONTRACT DOCUMENTS.*
• d. All of the above.*
• e. None of the above.*

Answer: b. Because the architect has not issued a certificate for payment without notification of reason for withholding certification.

14.1.1 The Contractor may terminate the Contract if the Work is stopped for a period of 30 consecutive days through no act or fault of the Contractor, a Subcontractor, a Sub-subcontractor, their agents or employees, or any other persons or entities performing portions of the Work, for any of the following reasons:

.1 Issuance of an order of a court or other public authority having jurisdiction that requires all Work to be stopped;

.2 An act of government, such as a declaration of national emergency, that requires all Work to be stopped;

.3 Because the Architect has not issued a Certificate for Payment and has not notified the Contractor of the reason for withholding certification as provided in Section 9.4.1, or because the Owner has not made payment on a Certificate for Payment within the time stated in the Contract Documents; or

.4 The Owner has failed to furnish to the Contractor reasonable evidence as required by Section 2.2.

Question 42

AIA-A201, Article 14 Termination or Suspension of the Contract

Question: The architect may issue a written order to the contractor to suspend or delay the work of the contract in whole or in part for a period of time determined by the owner.

True or False

Answer 42

Question: The architect may issue a written order to the contractor to suspend or delay the work of the contract in whole or in part for a period of time determined by the owner.

True or False

Answer: False

14.3.1 The Owner may, without cause, order the Contractor in writing to suspend, delay or interrupt the Work, in whole or in part for such period of time as the Owner may determine.

Question 43

AIA-A201, Article 14 Termination or Suspension of the Contract

Question: The owner may terminate the contract for construction if the contractor:

a. Repeatedly fails to supply enough properly skilled workers.
b. Fails to make payment to subcontractors in accordance with agreements made between the contractor and his subcontractors.
c. Repeatedly disregards applicable laws, codes and regulations.
d. All of the above.
e. a and c.

Answer 43

Question: The owner may terminate the contract for construction if the contractor:

• a. Repeatedly fails to supply enough properly skilled workers.*
• b. Fails to make payment to subcontractors in accordance with agreements made between the contractor and his subcontractors.*
• c. Repeatedly disregards applicable laws, codes and regulations.*
• d. All of the above.*
• e. a and c.*

Answer: d. All of the above.

14.2.1 The Owner may terminate the Contract if the Contractor .1 repeatedly refuses or fails to supply enough properly skilled workers or proper materials; .2 fails to make payment to Subcontractors or suppliers in accordance with the respective agreements between the Contractor and the Subcontractors or Suppliers; .3 repeatedly disregards applicable laws, statutes, ordinances, codes, rules and regulations, or lawful orders of a public authority; or .4 otherwise is guilty of substantial breach of a provision of the Contract Documents.

Commentary: Isolated instances of insufficient numbers of workers or improper materials will not justify termination under this clause. Such conduct must occur repeatedly. Isolated infractions will not justify termination under this clause.

Question 44

AIA-A201, Article 14 Termination or Suspension of the Contract

Question: 1. Once the initial decision maker certifies that sufficient cause exists to justify termination by the owner for cause, and the contractor and surety (if any) have been given 7-days notice of termination, the owner may, subject to the prior rights of the surety,

a. Finish the work of the contract by whatever means he deems expedient.
b. Accept assignment of the contractor’s subcontractors, at his discretion.
c. Prevent contractor access to the site and take possession of all materials, tools and construction equipment owned by the contractor.
d. All of the above.
e. a and b.

Answer 44

Question: 1. Once the initial decision maker certifies that sufficient cause exists to justify termination by the owner for cause, and the contractor and surety (if any) have been given 7-days notice of termination, the owner may, subject to the prior rights of the surety,

• a. Finish the work of the contract by whatever means he deems expedient.*
• b. Accept assignment of the contractor’s subcontractors, at his discretion.*
• c. Prevent contractor access to the site and take possession of all materials, tools and construction equipment owned by the contractor.*
• d. All of the above.*
• e. a and b.*

Answer: d. All of the above.

14.2.2 When any of the reasons described in Section 14.2.1 exist, and upon certification by the Architect that sufficient cause exists to justify such action, the Owner may, without prejudice to any other rights or remedies of the Owner and after giving the Contractor and the Contractor’s surety, if any, seven days’ notice, terminate employment of the Contractor and may, subject to any prior rights of the surety: .1 Exclude the Contractor from the site and take possession of all materials, equipment, tools, and construction equipment and machinery thereon owned by the Contractor; .2 Accept assignment of subcontracts pursuant to Section 5.4; and .3 Finish the Work by whatever reasonable method the Owner may deem expedient. Upon written request of the Contractor, the Owner shall furnish to the Contractor a detailed accounting of the costs incurred by the Owner in finishing the Work.

Question 45

AIA-A201, Article 14 Termination or Suspension of the Contract

Question: After termination by the owner for cause, the contractor may submit a written request to the architect to furnish to the contractor a detailed accounting of the costs incurred by the owner to complete the work.

True or False

Answer 45

Question: After termination by the owner for cause, the contractor may submit a written request to the architect to furnish to the contractor a detailed accounting of the costs incurred by the owner to complete the work.

Answer: False

14.2.2 When any of the reasons described in Section 14.2.1 exist, and upon certification by the Architect that sufficient cause exists to justify such action, the Owner may, without prejudice to any other rights or remedies of the Owner and after giving the Contractor and the Contractor’s surety, if any, seven days’ notice, terminate employment of the Contractor and may, subject to any prior rights of the surety: .1 Exclude the Contractor from the site and take possession of all materials, equipment, tools, and construction equipment and machinery thereon owned by the Contractor; .2 Accept assignment of subcontracts pursuant to Section 5.4; and .3 Finish the Work by whatever reasonable method the Owner may deem expedient. Upon written request of the Contractor, the Owner shall furnish to the Contractor a detailed accounting of the costs incurred by the Owner in finishing the Work.

Question 46

AIA-A201, Article 14 Termination or Suspension of the Contract

Question: When the owner terminates the contract for cause,

a. If the unpaid balance of the contract sum exceeds costs of finishing the work of the contract, compensation for the architect’s related additional services and expenses, and other damages incurred by the owner, this difference will be paid to the contractor.
b. If costs and damages to complete the work exceed the unpaid balance, the contractor pays the difference to the owner.
c. In either a or b, the amount paid to the contractor or owner will typically be certified by the architect and this obligation for payment shall survive termination of the contract.
d. All of the above.
e. a and b.

Answer 46

Question: When the owner terminates the contract for cause,

• a. If the unpaid balance of the contract sum exceeds costs of finishing the work of the contract, compensation for the architect’s related additional services and expenses, and other damages incurred by the owner, this difference will be paid to the contractor.*
• b. If costs and damages to complete the work exceed the unpaid balance, the contractor pays the difference to the owner.*
• c. In either a or b, the amount paid to the contractor or owner will typically be certified by the architect and this obligation for payment shall survive termination of the contract.*
• d. All of the above.*
• e. a and b.*

Answer: d. All of the above.

14.2.4 If the unpaid balance of the Contract Sum exceeds costs of finishing the Work, including compensation for the Architect’s services and expenses made necessary thereby, and other damages incurred by the Owner and not expressly waived, such excess shall be paid to the Contractor. If such costs and damages exceed the unpaid balance, the Contractor shall pay the difference to the Owner. The amount to be paid to the Contractor or Owner, as the case may be, shall be certified by the Initial Decision Maker, upon application, and this obligation for payment shall survive termination of the Contract.

Question 47

AIA-A201, Article 14 Termination or Suspension of the Contract

Question: When the owner terminates the contract for cause, the contractor is not entitled to receive further payment until the work is finished.

True or False

Answer 47

Question: When the owner terminates the contract for cause, the contractor is not entitled to receive further payment until the work is finished.

True or False

Answer: True

14.2.3 When the Owner terminates the Contract for one of the reasons stated in Section 14.2.1, the Contractor shall not be entitled to receive further payment until the Work is finished.

Question 48

AIA-A201, Article 14 Termination or Suspension of the Contract

Question: The contract sum and time, including profit, are adjusted for increases in the cost and time caused by interruption (suspensions and delays as well) of the work not caused by the contractor. However, no adjustment is made if:

a. Performance is, was or would have been so interrupted by another cause for which the contractor is responsible.
b. An equitable adjustment is made or denied under another provision of the contract for construction.
c. All of the above.
d. None of the above.

Answer 48

Question: The contract sum and time, including profit, are adjusted for increases in the cost and time caused by interruption (suspensions and delays as well) of the work not caused by the contractor. However, no adjustment is made if:

• a. Performance is, was or would have been so interrupted by another cause for which the contractor is responsible.*
• b. An equitable adjustment is made or denied under another provision of the contract for construction.*
• c. All of the above.*
• d. None of the above.*

Answer: c. All of the above.

14.3.2 The Contract Sum and Contract Time shall be adjusted for increases in the cost and time caused by suspension, delay, or interruption under Section 14.3.1. Adjustment of the Contract Sum shall include profit. No adjustment shall be made to the extent .1 that performance is, was, or would have been, so suspended, delayed, or interrupted, by another cause for which the Contractor is responsible; or .2 that an equitable adjustment is made or denied under another provision of the Contract.

Question 49

AIA-A201, Article 14 Termination or Suspension of the Contract

Question: The owner may, without cause, order the contractor to suspend the work of the construction contract for any period of time.

True or False

Answer 49

Question: The owner may, without cause, order the contractor to suspend the work of the construction contract for any period of time.

True or False

Answer: True

14.3.1 The Owner may, without cause, order the Contractor in writing to suspend, delay or interrupt the Work, in whole or in part for such period of time as the Owner may determine.

Question 50

AIA-A201, Article 14 Termination or Suspension of the Contract

Question: Upon receipt of written notice from the architect of termination for convenience, the contractor shall:

a. Cease operations as directed by the architect in the notice.
b. Take actions necessary, or as the architect may direct, for the protection and preservation of the work in place.
c. All of the above.
d. None of the above.

Answer 50

Question: Upon receipt of written notice from the architect of termination for convenience, the contractor shall:

• a. Cease operations as directed by the architect in the notice.*
• b. Take actions necessary, or as the architect may direct, for the protection and preservation of the work in place.*
• c. All of the above.*
• d. None of the above.*

Answer: d. None of the above.

14.4.2 Upon receipt of notice from the Owner of such termination for the Owner’s convenience, the Contractor shall

.1 cease operations as directed by the Owner in the notice;

.2 take actions necessary, or that the Owner may direct, for the protection and preservation of the Work; and .3 except for Work directed to be performed prior to the effective date of termination stated in the notice, terminate all existing subcontracts and purchase orders and enter into no further subcontracts and purchase orders.

Question 51

AIA-A201, Article 14 Termination or Suspension of the Contract

Question: The architect may, at any time, terminate the contract for construction for the owner’s convenience and without cause.

True or False

Answer 51

Question: The architect may, at any time, terminate the contract for construction for the owner’s convenience and without cause.

True or False

Answer: False

14.4.1 The Owner may, at any time, terminate the Contract for the Owner’s convenience and without cause.

Question 52

AIA-A201, Article 14 Termination or Suspension of the Contract

Question: Upon receipt of written notice from the owner of termination for convenience, with the exception for work to be performed prior to the effective date of termination as stated in the notice, the contractor is to:

a. Terminate all existing subcontracts.
b. Terminate purchase orders and enter into no further subcontracts and purchase orders.
c. All of the above.
d. None of the above.

Answer 52

Question: Upon receipt of written notice from the owner of termination for convenience, with the exception for work to be performed prior to the effective date of termination as stated in the notice, the contractor is to:

• a. Terminate all existing subcontracts.*
• b. Terminate purchase orders and enter into no further subcontracts and purchase orders.*
• c. All of the above.*
• d. None of the above.*

Answer: c. All of the above.

14.4.2 Upon receipt of notice from the Owner of such termination for the Owner’s convenience, the Contractor shall .1 cease operations as directed by the Owner in the notice; .2 take actions necessary, or that the Owner may direct, for the protection and preservation of the Work; and .3 except for Work directed to be performed prior to the effective date of termination stated in the notice, terminate all existing subcontracts and purchase orders and enter into no further subcontracts and purchase orders.

Question 53

AIA-A201, Article 14 Termination or Suspension of the Contract

Question: In the case of termination for the owner’s convenience, the contractor is entitled to receive payment for work of the contract performed and costs incurred by termination; along with reasonable overhead and profit on the work not executed.

True or False

Answer 53

Question: In the case of termination for the owner’s convenience, the contractor is entitled to receive payment for work of the contract performed and costs incurred by termination; along with reasonable overhead and profit on the work not executed.

True or False

Answer: False

14.4.3 In case of such termination for the Owner’s convenience, the Owner shall pay the Contractor for Work properly executed; costs incurred by reason of the termination, including costs attributable to termination of Subcontracts; and the termination fee, if any, set forth in the Agreement.

Commentary: In the 2017 revision of A201, the Contractor is not longer entitled to “reasonable overhead and profit on the work not executed” but is instead to receive a “termination fee” if any has been established during negotiation of the contract originally.

The Contractor is no longer entitled to “reasonable overhead and profit on the work not executed” but is instead to receive a “termination fee” if any has been established during negotiation of the contract originally.” – Zurich Insurance, “Comparison of 2007 and 2017 AIA contract documents: Key changes in AIA A201™ and AIA B101™- https://www.zurichna.com/en/knowledge/articles/2017/10/comparison-of-2007-and-2017-aia-contract-documents

Upon a termination for convenience, the traditional standard provisions permitted the contractor to recover its lost overhead and profit for work not performed beyond the date of termination. Unsurprisingly, owners would strike that provision consistent with a belief that it was inequitable to allow contractors to profit on unperformed work. In response, contractors began negotiating a termination fee to be paid upon a termination of convenience.
What was once a contractor request is now a market provision recognized in the document. Section 14.1.3 of the A102-2017 and Article 14 of the A201-2017 include distinct provisions to define the termination fee and require the owner to reimburse the contractor for the costs incurred when terminating subcontracts. Rather than merely striking the contractor’s right to profit for unperformed work, these default provisions will force the parties to negotiate fair compensation to the contractor in the event of termination without cause.” – Schwabe, Williamson & Wyatt, “The 2017 AIA Construction Documents Are Here. Contractors, Here Are the Helpful ‎Provisions. https://www.schwabe.com/newsroom-publications-14803

Question 54

AIA-A201, Article 15 Claims and Disputes

Question: The owner and contractor will commence all contractual related claims and causes of action against the other:

a. In no case more than 10 years after the date of substantial completion.
b. Within the time period specified by governing laws.
c. In accordance with the final dispute resolution method found in the contract.
d. All of the above.
e. None of the above.

Answer 54

Question: The owner and contractor will commence all contractual related claims and causes of action against the other:

• a. In no case more than 10 years after the date of substantial completion.*
• b. Within the time period specified by governing laws.*
• c. In accordance with the final dispute resolution method found in the contract.*
• d. All of the above.*
• e. None of the above.*

Answer: d. All of the above.

15.1.2 Time Limits on Claims The Owner and Contractor shall commence all Claims and causes of action against the other and arising out of or related to the Contract, whether in contract, tort, breach of warranty or otherwise, in accordance with the requirements of the binding dispute resolution method selected in the Agreement and within the period specified by applicable law, but in any case not more than 10 years after the date of Substantial Completion of the Work. The Owner and Contractor waive all Claims and causes of action not commenced in accordance with this Section 15.1.2.

Commentary: When an owner seeks to bring a cause of action against a contractor, it must be initiated within the applicable state statute of limitations. In many states, owners have the benefit of the discovery rule, which provides that the time period within which legal proceedings must be initiated begins to run when the alleged injury is discovered or should reasonably have been discovered. A201–2007 requires that binding dispute resolution be initiated in accordance with time periods specified in the applicable state law, or within ten years of the date of substantial completion, whichever occurs first. As a result, the owner will have the benefit of the discovery rule in states that follow it, but the contractor will have the benefit of knowing it will not be exposed to potential liability for more than ten years after the date of substantial completion even in states that follow the discovery rule.

Question 55

AIA-A201, Article 15 Claims and Disputes

Question: The responsibility to substantiate claims rests upon the owner or contractor making the claim.

True or False

Answer 55

Question: The responsibility to substantiate claims rests upon the owner or contractor making the claim.

True or False

Answer: True

15.1.1 Definition
A Claim is a demand or assertion by one of the parties seeking, as a matter of right, payment of money, a change in the Contract Time, or other relief with respect to the terms of the Contract. The term “Claim” also includes other disputes and matters in question between the Owner and Contractor arising out of or relating to the Contract. The responsibility to substantiate Claims shall rest with the party making the Claim. This Section 15.1.1 does not require the Owner to file a Claim in order to impose liquidated damages in accordance with the Contract Documents.

Question 56

AIA-A201, Article 15 Claims and Disputes

Question: The term “claim” is a demand or assertion by one of the parties of the contract for construction, as a matter of right,

a. Seeking payment of money.
b. Seeking relief with respect to the terms of the contract.
c. Also includes other disputes in question between the owner and contractor relating to the contract.
d. All of the above.
e. a and b.

Answer 56

Question: The term “claim” is a demand or assertion by one of the parties of the contract for construction, as a matter of right,

• a. Seeking payment of money.*
• b. Seeking relief with respect to the terms of the contract.*
• c. Also includes other disputes in question between the owner and contractor relating to the contract.*
• d. All of the above.*
• e. a and b.*

Answer: d. All of the above.

15.1.1 Definition
A Claim is a demand or assertion by one of the parties seeking, as a matter of right, payment of money, a change in the Contract Time, or other relief with respect to the terms of the Contract. The term “Claim” also includes other disputes and matters in question between the Owner and Contractor arising out of or relating to the Contract. The responsibility to substantiate Claims shall rest with the party making the Claim. This Section 15.1.1 does not require the Owner to file a Claim in order to impose liquidated damages in accordance with the Contract Documents.

Question 57

Disclaimer

Answer 57

Priscilla Lee is not responsible for any errors or omissions, or for the results obtained from the use of the information in the flashcards. All information in these flashcards is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.