Exam 1 Flashcards
1
Q
- An item joint venture requires working capital
A
F
2
Q
- An item joint venture is when each joint venturer has a specific part of the project to do.
A
T
3
Q
- Insurance and bonds are purchased in the name of a conventional joint venture.
A
T
4
Q
- A conventional joint venture does not require working capital.
A
F
5
Q
- The participation percentage may be disproportional in a conventional joint venture.
A
T
6
Q
- Joint venturers do not have to agree on the terms of the bid in a conventional joint venture.
A
F
7
Q
- A conventional joint venture has at least one joint venturer that does work onsite
A
T
8
Q
- Joint and several liability is known as “in solido” in Louisiana.
A
T
9
Q
- A joint venture is a partnership for more than one project.
A
F
10
Q
- A joint venture is a pooling of resources, sharing risk and profit.
A
T
11
Q
- An LLC may be member managed or manager managed.
A
T
12
Q
- An LLC may select whether to be taxed as a C corporation, an S corporation, or a partnership.
A
T
13
Q
- “LLC” stands for limited liability corporation.
A
F
14
Q
- A C corporation is taxed as an entity separate from its shareholders
A
T
15
Q
- Shareholders of a corporation have liability for corporate actions.
A
F
16
Q
- A corporation has perpetual duration (until dissolved by some action).
A
T
17
Q
- A joint venture is a partnership for multiple business ventures.
A
F
18
Q
- A partnership has flow-through tax characteristics.
A
T
19
Q
- A partnership in Louisiana must be in writing.
A
F
20
Q
- The simplest form of business is the proprietorship
A
T
21
Q
- Building codes are enforced by use of permits, inspections, and testing reports.
A
T
22
Q
- The prime contractor determines the delivery method to be used.
A
F
23
Q
- The owner is the “prime contractor” when a force account (day labor) project
A
T
24
Q
- Integrated Project Delivery is the Team Approach to project delivery
A
T
25
6. "Fast-track" works best when the delivery method is design/bid/build
F
26
5. Construction financing is short-term financing.
T
27
4. An architect is usually the lead designer on a commercial project.
T
28
3. A material supplier may do extensive work onsite.
F
29
2. An "at-risk" agent may act as a prime contractor during construction
T
30
1. An A/E's principal job is to be the owner's representative during construction.
F
31
10. A subcontract should always have a 24 hour clause.
F
32
9. Subcontractors do not like "flow of contract" provisions
T
33
8. The subcontractor controls when it does its work.
F
34
7. The subcontract work must be included in the prime contract work.
F
35
6. The prime contract must exist to have a subcontract.
T
36
5. "No pay until paid" language means that the contractor does not have to pay until it has received payment.
T
37
4. A description of the project is not necessary in a purchase order.
F
38
3. Purchase orders should include "flow down" language.
T
39
2. A material supplier's quote will have controlling language unless the purchase order states otherwise.
T
40
1. A purchase order may be used for work onsite if the work is minimal.
T
41
10. A Change Directive requires the contractor's signature
F
42
9. A subcontractor is an entity in contract with the prime contractor to perform a portion of the Work onsite.
T
43
8. If the Architect is the Owner's rep during construction, he or she must be onsite at all times of construction.
F
44
7. Indemnification is considered to be intermediate.
T
45
6. The Owner designates the superintendent to be used by the contractor
F
46
5. Usually the contractor determines means, methods, techniques, sequences, and procedures.
T
47
3. The Architect is the owner of the plans and spec's even though the Owner paid for them.
T
48
4. The contractor has no rights to know the Owner's finances for the project.
F
49
2. The Contract Documents include more than just the signed Agreement
T
50
1. The Index in the General Conditions is three pages long.
F
51
10. An "escalation" clause may be included in a short-term, lump sum contract
F
52
9. A "variation-in-quantities" clause may be included in a unit-price contract.
T
53
8. There is an implied obligation for the owner to provide access to the construction site.
T
54
7. The time provisions in a construction contract are usually measured in calendar days.
T
55
6. Contractors prefer a limited list of excusable delays in the contract
F
56
5. Usually, an owner may terminate a contract for convenience.
T
57
4. The absence of a differing site conditions clause is advantageous to the contractor.
F
58
3. The changes clause usually gives the owner the unilateral right to make changes to the contract.
T
59
2. A limited waiver of sovereign immunity is important on private (non-governmental) projects.
F
60
1. Threshold red flag clauses need to be addressed before starting estimating on a project.
T
61
10. The completed bid form is the offer.
T
62
9. In an AIA standard form contract, if there is any bias it is in favor of the owner
T
63
8. A fixed price contract holds more risk for the contractor than a cost-plus contract
T
64
7. Fast-track construction works especially well in a design-build approach.
T
65
6. If an owner contracts with an A/E for design services, the A/E is the owner's agent in that contract.
F
66
5. The traditional approach is for the owner to have one contract with a design-build company.
F
67
4. A prime contract is any contract in which one of the parties is the contractor.
F
68
3. Cost-plus-fixed fee contracts encourage the contractor to finish quickly.
T
69
2. A cost-plus-percentage fee contract encourages the contractor to hold down costs.
F
70
1. Most negotiated contracts use a cost-plus fee arrangement.
T
71
10. A warranty period may last for more than one year.
T
72
9. An owner-caused delay may entitle the contractor to extra money and extra time
T
73
8. "Time ... of the essence" means finishing late may be a material breach of the contract
T
74
7. The owner has the responsibility of providing funding for a construction project
T
75
6. The textbook covers all possible contract clauses.
F
76
5. "Differing site conditions" may be called "Concealed Conditions."
T
77
4. If a provision is in the contract, liquidated damages may be used in lieu of actual damages.
T
78
A contractor always has the right to select a subcontractor without approval of the owner.
F
79
2. Broad indemnification of the owner is riskier to the contractor than limited indemnification
T
80
1. There is only one form of negotiated contract.
F
81
7. An unconditional agreement with an offer is an acceptance
T
82
10. A Louisiana requirement for a contract is a certain object
T
83
9. A Louisiana requirement for a contract is consent legally given
T
84
8. An offer is a conditional willingness to enter into a contract.
F
85
6. Consideration is always measured in money.
F
86
5. Privity is the existence of a contractual relationship.
T
87
4. A third-party beneficiary relationship must be intended
T
88
3. Apparent authority must be the same as expressed authority for it to be valid
F
89
2. The three sources of liability are contract, tort, and strict.
F
90
1. With strict liability proof of fault is unnecessary
T
91
a 48 hour clause gives a prime contractor the right to terminate a subcontract if the subcontractor does not remedy faulty work within 48 hours of being notified by the prime contractor
False- not terminate
92
it is a good idea for a prime contractor to include indemnification language in a subcontract if the prime contract has indemnified the owner
True
93
flow of contract liability may subject a subcontractor to more damages than just the liquidated damages suffered by the prime contractor for a problem caused by the subcontractor
True
94
for a subcontract to be valid, a prime contract must exist first
True
95
the prime contractor has to have control over when a subcontractor foes its work because of the prime contractors schedule and time requirements
True
| `
96
a subcontractors work is always specified if the prime contract
False- Not always
97
a subcontract should be used if an entity is going to be doing significant onsite work
True
98
handwritten provisons usually control over preprinted provisions if there is a conflict in a purchase order
True
99
Dispute resolution, termination provisions, and indemnification are three of the many provisions that may be in a purchase orders general conditions
True
100
FOB jobsite means that the contractor is liable for damage during transportation to the jobsite
False- Not liable
101
FOB means freight over board
False- Freight on Board
102
if a purchase order has a no-pay-until-paid provison, the supplier will not get paid at all if the owner does not pay the contractor
False- Supplier will get paid
103
how materials are packaged and marked is usually not part of shipping instructions
False- usually are
104
flow-down language incorporates the prime contract provisions in a contract on a lower tier
True
105
the servicing of chemical toilets at a construction site is an example of a purchase order for services
True
106
determination of what law is applicable often hinges upon whether the sale is of materials or service
True
107
on a construction project purchase orders are used only for the sale of materials used at the sight
False- Used for other thinfs as well
108
a purchase order is a second tier contract
True
109
so long as a contractor has a written contract with an individual to provide services for the contractor the individual will not be considered a statutory employee of the contractor
False- Will be considered
110
OSHA rules exempt construction work from its requirement of a work environment free from hazards because construction work is hazardous by nature
False- Do not exempt
111
a steward gets paid at the top rate for his craft
False-
112
a steward is a union employee on a particular project
False- Union representative
113
manning rules may require an equipment operator to be present when repairs are being made to his equipment
True
114
a graveyard shift worker gets paid more for 8 hours of work than a swing shift worker
True
115
unions prefer a 40-hour workweek to an 8 hour workday when it comes to overtime pay
False- Prefer an 8-hour workday to a 40-hour workweek
116
benefits cost the contruction contractor more on an hours-worked basis, as opposed to the hours-paid basis
False- Cost them MORE on the hours-paid basis then it does on the hours-worked basis
117
a subcontracting clause in a labor agreement requires a subcontractor on a project subject to the labor agreement to agree to be bound by the terms of the labor agreement
True
118
a lockout is when a union goes on strike illegally
False- legally
119
the union hiring hall provisions prohibit a contruction contractor from specifying any particular employees from the union
False- States that they have a referral system and provide works for control
120
union jurisdiction has to do with the type of work and the geographical extent
True
121
union security provisions require membership in the union as a condition of employment
True
122
the united auto workers is an example of an industrial labor union
True
123
a labor agreement cannot involve more than one craft
False- can include
124
a non-union construction contractor has no need to be familiar with labor agreements
False- has some need
125
escalation clauses are used on long term contracts to allow for increased labor and material cost
True
126
a variation in quantities clause is intended to prevent an unfair gain or loss by the contractor due to a difference in the quantities actually incorporated into the project compared to what was estimated in the contract
True
127
an indemnification clause can hold an owner harmless from losses on the project even if they are caused by the owner
True
128
retainage or retention is an amount kept by the owner from the progress payments to the contractor in order to penalize the contractor for completing the project late
False- NOT penalize the contractor, Made for remedial work, not to penalize, It is to make sure that the work is completed correctly!
129
the contractor my rely on physical conditions reports provided by the owner, supported by pre-bid inspection, unless the contract states otherwise
True
130
unless provided otherwise in a contract, the contractor is entitled to be paid for the invoice cost of materials delivered to the site even though they may not have been incorporated into the project at the time of billing the owner
False- Paid for work performed or material incorporated in the project at the time of billing
131
there is no implied obligation for the owner to provide access to the contruction site
False- is an implied right
132
it is normal for a contract to provide for monthly progress payments to the contractor
True
133
liquidated damages is the amount per day that a contractor owes for completing the contract late
True
134
Liquidated damages are assessed based on the actual damages suffered by the owner
False- suffered by the contractor
135
a contractor cannot be assessed damages for missing milestone completion dates provided that he completes the entire contract timely
False- If he completes the milestones on time he is fine, if not then he CAN be assessed damages regardless of when he finished the project
136
a default termination by the owner may be justified if the contractor is doing unsatisfactory work
True
137
the time provisions in a contruction contract are usually measured in work days
False- Calendar days
138
the owner usually has the unilateral right to terminate a construction contract
True
139
if the contract contains a no-damages-for-delay clause the contractor will not be entitles to either a time adjustment nor a cost adjustment in the contract caused by a delay
False- Will be entitled ( time extensions only)
140
if a contract has no differing site conditions clause, then the contractor is responsible for the cost if conditions are encountered that are more costly to overcome
True
141
contractors prefer a contract to have a narrow list of excusable delays
False- Broad list
142
in the dispute resolution clause of a private project contract, it is important to know whether or not sovereign immunity has been waived
False- public project
143
the changes clause usually gives the owner the unilateral right to make changes to the contract
True
144
the contractor does not need to inspect the site prior to submitting a bid unless the bid doc expressly require such an inspection
False- does need to inspect
145
the five threshold red flag construction contract clauses are 1. dispute resolution 2. changes 3. differing site conditions 4. payments and progress payments 5. terminations and partial terminations
False- 4) delays
146
supplementary conditions supplement the general conditions and usually remain the same from contract to contract
False- does not remain the same
147
whether a project will require union labor or not is something that will be found in the general conditions
False- supplementary conditions
148
the bid form itself is drafted and completed by the contractor
False- drafted by the owner
149
bid forms may require information about the contractor's work history and financial strength
True
150
instructions to bidders is where prospective bidders find out how to get to the owners office to pick up the bid docs
False- Advertisement
151
the completed bid form is the contract is a construction project
False- is not the contract
152
in an AIA standard form contract, if there is any bias it is in favor of the contractot
`
False- is not the contractor
153
the four most important things that should be in an advertisement are 1. project identification 2. contractor identification 3. time and place for the bid opening 4. instructions how to get the bud documents
False- 2) Owner identification
154
standard form contracts are used because they contain provisions deemed to be fair to the parties
True
155
a schedule-of-items contract is a type of cost-plus-incentive fee contract
False- Fixed fee
156
a fixed price contract golds more risk for the owner than a cost-plus contract
False- Less risk for the owner
157
in a cost-plus-incentive fee contract the contractor can lose money
True
158
on a guaranteed-maximum-price contract the contractor can never lose money
False- Can loose money
159
in a cost-plus-percentage fee contract, there is a profit incentive for the contractor to hold down the cost of the construction
False- no incentive because they receive a percentage of the total cost
160
in a cost-plus-fixed fee contract the contractor is incented to complete the project as soon as possible
True
161
fast track services work best when there are separate contracts for design and construction
False- prime contract is design build contract
162
in the traditional approach to construction there will be one prime contract
False- have one with the architect and one with the contractor
163
a design-construct contract reduces the likelihood of a disagreement between the designer and the contractor
True
164
a prime contract is any contract in which one of the parties is a construction contractor
False- has to be owner
165
if a contract is intended to benefit a third-party, the third-party may have rights under the contract provided that the third party has privity
False- cant have privity
166
a contractual requirement of strict adherence to a schedule may give rise to a third-party beneficiary relationship
True
167
a unconditional acceptance is a counter offer
False- conditional acceptance
168
privity is the result of a contractual relationship between two or more parties to a contract
True
169
an offer is an unconditional willingness to enter into a contract
True
170
In LA, a 17 year old can never legally enter into a contract
False- can with permission of a legal gardian
171
statutory liability may be expressed or implied
True
172
strict liability requires proof of fault or negligence
False- does not require proof
173
contract liability is always a result of a breach of the express conditions of the contract
False- or implied liability
174
tort liability is always the result of an accident
False- can be the result
175
in a prime construction contract, the architect has control over the means, methods, techniques, and sequences of the construction work
False- contractor
176
in a prime construction contract, the owner is the source of the funding for a project
True
177
in the construction document sequence, joint venture contracts come into being after the prime contract is signed
False- before the prime contract is signed
178
suppliers may be required to be licensed as contractors in LA in order to be able to succeed in a lawsuit for non-payment for those supplies
True
179
a licensed contractor in LA may lose its license if it performs contruction work in areas in which it is not licensed
True
180
one of the reasons for licensing of contractors is to keep trained people out of the industry
False- to keep trained people in the industry
181
one of the principal disadvantages of a corporate form of business is that dividends paid to the shareholders are not deductible by the corp.
True
182
one of the defining characteristics of a corporation is that it has decentralized management
False- Centralized Management
183
commingling of funds between a sole shareholder and the corporation is not a basis for piercing the corporate veil
False-Is basis for piercing the corporate veil
184
a louisiana LLC must be in writing, but it does not have to be filed in order to do business
False-And MUST be filed in order to do business
185
LLC stands for limited liability corperation
False- Limited Liability Company
186
LLC's are always taxed like a partnership
False-Not always
187
in general, louisiana partnership agreements do not have to be in writing
True
188
a sole proprietorship is a business owned by one corporation
False-Owned by ONE PERSON
189
a joint venture is like a partnership, but it is for more than one project
False- It is for ONE PROJECT
