Exam 1

Question 1

10. An item joint venture requires working capital

Answer 1

F

Question 2

9. An item joint venture is when each joint venturer has a specific part of the project to do.

Answer 2

T

Question 3

8. Insurance and bonds are purchased in the name of a conventional joint venture.

Answer 3

T

Question 4

7. A conventional joint venture does not require working capital.

Answer 4

F

Question 5

6. The participation percentage may be disproportional in a conventional joint venture.

Answer 5

T

Question 6

5. Joint venturers do not have to agree on the terms of the bid in a conventional joint venture.

Answer 6

F

Question 7

4. A conventional joint venture has at least one joint venturer that does work onsite

Answer 7

T

Question 8

3. Joint and several liability is known as “in solido” in Louisiana.

Answer 8

T

Question 9

2. A joint venture is a partnership for more than one project.

Answer 9

F

Question 10

1. A joint venture is a pooling of resources, sharing risk and profit.

Answer 10

T

Question 11

10. An LLC may be member managed or manager managed.

Answer 11

T

Question 12

9. An LLC may select whether to be taxed as a C corporation, an S corporation, or a partnership.

Answer 12

T

Question 13

8. “LLC” stands for limited liability corporation.

Answer 13

F

Question 14

7. A C corporation is taxed as an entity separate from its shareholders

Answer 14

T

Question 15

6. Shareholders of a corporation have liability for corporate actions.

Answer 15

F

Question 16

5. A corporation has perpetual duration (until dissolved by some action).

Answer 16

T

Question 17

4. A joint venture is a partnership for multiple business ventures.

Answer 17

F

Question 18

3. A partnership has flow-through tax characteristics.

Answer 18

T

Question 19

2. A partnership in Louisiana must be in writing.

Answer 19

F

Question 20

1. The simplest form of business is the proprietorship

Answer 20

T

Question 21

10. Building codes are enforced by use of permits, inspections, and testing reports.

Answer 21

T

Question 22

9. The prime contractor determines the delivery method to be used.

Answer 22

F

Question 23

8. The owner is the “prime contractor” when a force account (day labor) project

Answer 23

T

Question 24

7. Integrated Project Delivery is the Team Approach to project delivery

Answer 24

T

Question 25

6. “Fast-track” works best when the delivery method is design/bid/build

Answer 25

F

Question 26

5. Construction financing is short-term financing.

Answer 26

T

Question 27

4. An architect is usually the lead designer on a commercial project.

Answer 27

T

Question 28

3. A material supplier may do extensive work onsite.

Answer 28

F

Question 29

2. An “at-risk” agent may act as a prime contractor during construction

Answer 29

T

Question 30

1. An A/E’s principal job is to be the owner’s representative during construction.

Answer 30

F

Question 31

10. A subcontract should always have a 24 hour clause.

Answer 31

F

Question 32

9. Subcontractors do not like “flow of contract” provisions

Answer 32

T

Question 33

8. The subcontractor controls when it does its work.

Answer 33

F

Question 34

7. The subcontract work must be included in the prime contract work.

Answer 34

F

Question 35

6. The prime contract must exist to have a subcontract.

Answer 35

T

Question 36

5. “No pay until paid” language means that the contractor does not have to pay until it has received payment.

Answer 36

T

Question 37

4. A description of the project is not necessary in a purchase order.

Answer 37

F

Question 38

3. Purchase orders should include “flow down” language.

Answer 38

T

Question 39

2. A material supplier’s quote will have controlling language unless the purchase order states otherwise.

Answer 39

T

Question 40

1. A purchase order may be used for work onsite if the work is minimal.

Answer 40

T

Question 41

10. A Change Directive requires the contractor’s signature

Answer 41

F

Question 42

9. A subcontractor is an entity in contract with the prime contractor to perform a portion of the Work onsite.

Answer 42

T

Question 43

8. If the Architect is the Owner’s rep during construction, he or she must be onsite at all times of construction.

Answer 43

F

Question 44

7. Indemnification is considered to be intermediate.

Answer 44

T

Question 45

6. The Owner designates the superintendent to be used by the contractor

Answer 45

F

Question 46

5. Usually the contractor determines means, methods, techniques, sequences, and procedures.

Answer 46

T

Question 47

3. The Architect is the owner of the plans and spec’s even though the Owner paid for them.

Answer 47

T

Question 48

4. The contractor has no rights to know the Owner’s finances for the project.

Answer 48

F

Question 49

2. The Contract Documents include more than just the signed Agreement

Answer 49

T

Question 50

1. The Index in the General Conditions is three pages long.

Answer 50

F

Question 51

10. An “escalation” clause may be included in a short-term, lump sum contract

Answer 51

F

Question 52

9. A “variation-in-quantities” clause may be included in a unit-price contract.

Answer 52

T

Question 53

8. There is an implied obligation for the owner to provide access to the construction site.

Answer 53

T

Question 54

7. The time provisions in a construction contract are usually measured in calendar days.

Answer 54

T

Question 55

6. Contractors prefer a limited list of excusable delays in the contract

Answer 55

F

Question 56

5. Usually, an owner may terminate a contract for convenience.

Answer 56

T

Question 57

4. The absence of a differing site conditions clause is advantageous to the contractor.

Answer 57

F

Question 58

3. The changes clause usually gives the owner the unilateral right to make changes to the contract.

Answer 58

T

Question 59

2. A limited waiver of sovereign immunity is important on private (non-governmental) projects.

Answer 59

F

Question 60

1. Threshold red flag clauses need to be addressed before starting estimating on a project.

Answer 60

T

Question 61

10. The completed bid form is the offer.

Answer 61

T

Question 62

9. In an AIA standard form contract, if there is any bias it is in favor of the owner

Answer 62

T

Question 63

8. A fixed price contract holds more risk for the contractor than a cost-plus contract

Answer 63

T

Question 64

7. Fast-track construction works especially well in a design-build approach.

Answer 64

T

Question 65

6. If an owner contracts with an A/E for design services, the A/E is the owner’s agent in that contract.

Answer 65

F

Question 66

5. The traditional approach is for the owner to have one contract with a design-build company.

Answer 66

F

Question 67

4. A prime contract is any contract in which one of the parties is the contractor.

Answer 67

F

Question 68

3. Cost-plus-fixed fee contracts encourage the contractor to finish quickly.

Answer 68

T

Question 69

2. A cost-plus-percentage fee contract encourages the contractor to hold down costs.

Answer 69

F

Question 70

1. Most negotiated contracts use a cost-plus fee arrangement.

Answer 70

T

Question 71

10. A warranty period may last for more than one year.

Answer 71

T

Question 72

9. An owner-caused delay may entitle the contractor to extra money and extra time

Answer 72

T

Question 73

8. “Time … of the essence” means finishing late may be a material breach of the contract

Answer 73

T

Question 74

7. The owner has the responsibility of providing funding for a construction project

Answer 74

T

Question 75

6. The textbook covers all possible contract clauses.

Answer 75

F

Question 76

5. “Differing site conditions” may be called “Concealed Conditions.”

Answer 76

T

Question 77

4. If a provision is in the contract, liquidated damages may be used in lieu of actual damages.

Answer 77

T

Question 78

A contractor always has the right to select a subcontractor without approval of the owner.

Answer 78

F

Question 79

2. Broad indemnification of the owner is riskier to the contractor than limited indemnification

Answer 79

T

Question 80

1. There is only one form of negotiated contract.

Answer 80

F

Question 81

7. An unconditional agreement with an offer is an acceptance

Answer 81

T

Question 82

10. A Louisiana requirement for a contract is a certain object

Answer 82

T

Question 83

9. A Louisiana requirement for a contract is consent legally given

Answer 83

T

Question 84

8. An offer is a conditional willingness to enter into a contract.

Answer 84

F

Question 85

6. Consideration is always measured in money.

Answer 85

F

Question 86

5. Privity is the existence of a contractual relationship.

Answer 86

T

Question 87

4. A third-party beneficiary relationship must be intended

Answer 87

T

Question 88

3. Apparent authority must be the same as expressed authority for it to be valid

Answer 88

F

Question 89

2. The three sources of liability are contract, tort, and strict.

Answer 89

F

Question 90

1. With strict liability proof of fault is unnecessary

Answer 90

T

Question 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

Answer 91

False- not terminate

Question 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

Answer 92

True

Question 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

Answer 93

True

Question 94

for a subcontract to be valid, a prime contract must exist first

Answer 94

True

Question 95

the prime contractor has to have control over when a subcontractor foes its work because of the prime contractors schedule and time requirements

Answer 95

True

`

Question 96

a subcontractors work is always specified if the prime contract

Answer 96

False- Not always

Question 97

a subcontract should be used if an entity is going to be doing significant onsite work

Answer 97

True

Question 98

handwritten provisons usually control over preprinted provisions if there is a conflict in a purchase order

Answer 98

True

Question 99

Dispute resolution, termination provisions, and indemnification are three of the many provisions that may be in a purchase orders general conditions

Answer 99

True

Question 100

FOB jobsite means that the contractor is liable for damage during transportation to the jobsite

Answer 100

False- Not liable

Question 101

FOB means freight over board

Answer 101

False- Freight on Board

Question 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

Answer 102

False- Supplier will get paid

Question 103

how materials are packaged and marked is usually not part of shipping instructions

Answer 103

False- usually are

Question 104

flow-down language incorporates the prime contract provisions in a contract on a lower tier

Answer 104

True

Question 105

the servicing of chemical toilets at a construction site is an example of a purchase order for services

Answer 105

True

Question 106

determination of what law is applicable often hinges upon whether the sale is of materials or service

Answer 106

True

Question 107

on a construction project purchase orders are used only for the sale of materials used at the sight

Answer 107

False- Used for other thinfs as well

Question 108

a purchase order is a second tier contract

Answer 108

True

Question 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

Answer 109

False- Will be considered

Question 110

OSHA rules exempt construction work from its requirement of a work environment free from hazards because construction work is hazardous by nature

Answer 110

False- Do not exempt

Question 111

a steward gets paid at the top rate for his craft

Answer 111

False-

Question 112

a steward is a union employee on a particular project

Answer 112

False- Union representative

Question 113

manning rules may require an equipment operator to be present when repairs are being made to his equipment

Answer 113

True

Question 114

a graveyard shift worker gets paid more for 8 hours of work than a swing shift worker

Answer 114

True

Question 115

unions prefer a 40-hour workweek to an 8 hour workday when it comes to overtime pay

Answer 115

False- Prefer an 8-hour workday to a 40-hour workweek

Question 116

benefits cost the contruction contractor more on an hours-worked basis, as opposed to the hours-paid basis

Answer 116

False- Cost them MORE on the hours-paid basis then it does on the hours-worked basis

Question 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

Answer 117

True

Question 118

a lockout is when a union goes on strike illegally

Answer 118

False- legally

Question 119

the union hiring hall provisions prohibit a contruction contractor from specifying any particular employees from the union

Answer 119

False- States that they have a referral system and provide works for control

Question 120

union jurisdiction has to do with the type of work and the geographical extent

Answer 120

True

Question 121

union security provisions require membership in the union as a condition of employment

Answer 121

True

Question 122

the united auto workers is an example of an industrial labor union

Answer 122

True

Question 123

a labor agreement cannot involve more than one craft

Answer 123

False- can include

Question 124

a non-union construction contractor has no need to be familiar with labor agreements

Answer 124

False- has some need

Question 125

escalation clauses are used on long term contracts to allow for increased labor and material cost

Answer 125

True

Question 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

Answer 126

True

Question 127

an indemnification clause can hold an owner harmless from losses on the project even if they are caused by the owner

Answer 127

True

Question 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

Answer 128

False- NOT penalize the contractor, Made for remedial work, not to penalize, It is to make sure that the work is completed correctly!

Question 129

the contractor my rely on physical conditions reports provided by the owner, supported by pre-bid inspection, unless the contract states otherwise

Answer 129

True

Question 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

Answer 130

False- Paid for work performed or material incorporated in the project at the time of billing

Question 131

there is no implied obligation for the owner to provide access to the contruction site

Answer 131

False- is an implied right

Question 132

it is normal for a contract to provide for monthly progress payments to the contractor

Answer 132

True

Question 133

liquidated damages is the amount per day that a contractor owes for completing the contract late

Answer 133

True

Question 134

Liquidated damages are assessed based on the actual damages suffered by the owner

Answer 134

False- suffered by the contractor

Question 135

a contractor cannot be assessed damages for missing milestone completion dates provided that he completes the entire contract timely

Answer 135

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

Question 136

a default termination by the owner may be justified if the contractor is doing unsatisfactory work

Answer 136

True

Question 137

the time provisions in a contruction contract are usually measured in work days

Answer 137

False- Calendar days

Question 138

the owner usually has the unilateral right to terminate a construction contract

Answer 138

True

Question 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

Answer 139

False- Will be entitled ( time extensions only)

Question 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

Answer 140

True

Question 141

contractors prefer a contract to have a narrow list of excusable delays

Answer 141

False- Broad list

Question 142

in the dispute resolution clause of a private project contract, it is important to know whether or not sovereign immunity has been waived

Answer 142

False- public project

Question 143

the changes clause usually gives the owner the unilateral right to make changes to the contract

Answer 143

True

Question 144

the contractor does not need to inspect the site prior to submitting a bid unless the bid doc expressly require such an inspection

Answer 144

False- does need to inspect

Question 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

Answer 145

False- 4) delays

Question 146

supplementary conditions supplement the general conditions and usually remain the same from contract to contract

Answer 146

False- does not remain the same

Question 147

whether a project will require union labor or not is something that will be found in the general conditions

Answer 147

False- supplementary conditions

Question 148

the bid form itself is drafted and completed by the contractor

Answer 148

False- drafted by the owner

Question 149

bid forms may require information about the contractor’s work history and financial strength

Answer 149

True

Question 150

instructions to bidders is where prospective bidders find out how to get to the owners office to pick up the bid docs

Answer 150

False- Advertisement

Question 151

the completed bid form is the contract is a construction project

Answer 151

False- is not the contract

Question 152

in an AIA standard form contract, if there is any bias it is in favor of the contractot
`

Answer 152

False- is not the contractor

Question 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

Answer 153

False- 2) Owner identification

Question 154

standard form contracts are used because they contain provisions deemed to be fair to the parties

Answer 154

True

Question 155

a schedule-of-items contract is a type of cost-plus-incentive fee contract

Answer 155

False- Fixed fee

Question 156

a fixed price contract golds more risk for the owner than a cost-plus contract

Answer 156

False- Less risk for the owner

Question 157

in a cost-plus-incentive fee contract the contractor can lose money

Answer 157

True

Question 158

on a guaranteed-maximum-price contract the contractor can never lose money

Answer 158

False- Can loose money

Question 159

in a cost-plus-percentage fee contract, there is a profit incentive for the contractor to hold down the cost of the construction

Answer 159

False- no incentive because they receive a percentage of the total cost

Question 160

in a cost-plus-fixed fee contract the contractor is incented to complete the project as soon as possible

Answer 160

True

Question 161

fast track services work best when there are separate contracts for design and construction

Answer 161

False- prime contract is design build contract

Question 162

in the traditional approach to construction there will be one prime contract

Answer 162

False- have one with the architect and one with the contractor

Question 163

a design-construct contract reduces the likelihood of a disagreement between the designer and the contractor

Answer 163

True

Question 164

a prime contract is any contract in which one of the parties is a construction contractor

Answer 164

False- has to be owner

Question 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

Answer 165

False- cant have privity

Question 166

a contractual requirement of strict adherence to a schedule may give rise to a third-party beneficiary relationship

Answer 166

True

Question 167

a unconditional acceptance is a counter offer

Answer 167

False- conditional acceptance

Question 168

privity is the result of a contractual relationship between two or more parties to a contract

Answer 168

True

Question 169

an offer is an unconditional willingness to enter into a contract

Answer 169

True

Question 170

In LA, a 17 year old can never legally enter into a contract

Answer 170

False- can with permission of a legal gardian

Question 171

statutory liability may be expressed or implied

Answer 171

True

Question 172

strict liability requires proof of fault or negligence

Answer 172

False- does not require proof

Question 173

contract liability is always a result of a breach of the express conditions of the contract

Answer 173

False- or implied liability

Question 174

tort liability is always the result of an accident

Answer 174

False- can be the result

Question 175

in a prime construction contract, the architect has control over the means, methods, techniques, and sequences of the construction work

Answer 175

False- contractor

Question 176

in a prime construction contract, the owner is the source of the funding for a project

Answer 176

True

Question 177

in the construction document sequence, joint venture contracts come into being after the prime contract is signed

Answer 177

False- before the prime contract is signed

Question 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

Answer 178

True

Question 179

a licensed contractor in LA may lose its license if it performs contruction work in areas in which it is not licensed

Answer 179

True

Question 180

one of the reasons for licensing of contractors is to keep trained people out of the industry

Answer 180

False- to keep trained people in the industry

Question 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.

Answer 181

True

Question 182

one of the defining characteristics of a corporation is that it has decentralized management

Answer 182

False- Centralized Management

Question 183

commingling of funds between a sole shareholder and the corporation is not a basis for piercing the corporate veil

Answer 183

False-Is basis for piercing the corporate veil

Question 184

a louisiana LLC must be in writing, but it does not have to be filed in order to do business

Answer 184

False-And MUST be filed in order to do business

Question 185

LLC stands for limited liability corperation

Answer 185

False- Limited Liability Company

Question 186

LLC’s are always taxed like a partnership

Answer 186

False-Not always

Question 187

in general, louisiana partnership agreements do not have to be in writing

Answer 187

True

Question 188

a sole proprietorship is a business owned by one corporation

Answer 188

False-Owned by ONE PERSON

Question 189

a joint venture is like a partnership, but it is for more than one project

Answer 189

False- It is for ONE PROJECT