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Law II - Advanced Construction Topics > Exam 1 - Contracts and Bankruptcy > Flashcards

Exam 1 - Contracts and Bankruptcy Flashcards

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1
Q

This act fights misrepresentation within a contract.

A

False Claims Act

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2
Q

When contracting with the government, the government is considered an “individual” and not a ruling body.

True or False

A

True.

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3
Q

The largest consumer of goods and services

A

The U.S. Government

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4
Q

These clauses are often incorporated by reference rather than written out in a contract

A

Standard Form Clauses

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5
Q

There is no such thing as “apparent authority” in government contracting.

True or false

A

True

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6
Q

The situation in which a reasonable third party recognizes that an agent has an authority to act. Meaning, the principal (owner) is bound to the decisions and actions of the agent.

A

Apparent Authority

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7
Q

The means by which contracts are awarded by the Federal Government.

A

“Best Value”

  • Performance
  • Management
  • Experience
  • Personnel
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8
Q

What are the five social and economic policies enacted within construction?

A
  1. Historically Underutilized Businesses (HUB)
  2. Veteran owned businesses
  3. Women-owned businesses
  4. Small businesses
  5. Disabled owned businesses
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9
Q

This act regulated minimum wage for workers within Federal Contracts. Based on the local prevailing wage.

A

Davis Bacon Act

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10
Q

This act allowed both the contractor and the Federal Government to make post-award monetary claims and non-monetary claims. All claims must be submitted to the Federal Government.

A

Contract Disputes Act of 1978

P.S.
This is kind of bullshit, since you’re making a claim against the people who are going to either approve or deny that claim.

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11
Q

This statute sets a time frame in which you are allowed to make a claim. After this time frame has passed, you are no longer able to make a claim.

A

Statute of limitations

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12
Q

This statute varies from state to state. In Texas, however, this statute provides that after 10 years following a dispute, a claim cannot be made against the contractor.

A

Statute of Repose

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13
Q

CDA

A

Contract Disputes Act

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14
Q

Written claims under the CDA must follow these parameters.

A
  1. Must be within 6 years (SOL - Statute of Limitations)
  2. Must be submitted to Contracting Officer
  3. Must include a specific request for a final decision
  4. Has to be written
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15
Q

The government may NOT cancel a project on a whim for no reason whatsoever, as to protect the civilian contractor.

True or False

A

False.

The government is allowed to “terminate for convenience”. Meaning, they can cancel a project for no reason with no prior warning.

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16
Q

Kickback Act

A

There are no “kickbacks” allowed within a Federal construction project.

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17
Q

Two known environmental policies within the construction industry

A
  1. Environmental Efficiency and Sustainable Design

2. LEEDS (Internationally Designed)

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18
Q

FAR

A

Federal Acquisition Regulation

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19
Q

List the FAR Expectations on Ethics

A

THE CONTRACTING COMPANY SHOULD:

  1. Conduct self with the highest degree of integrity
  2. Have an internal, written code of business ethics and conduct
  3. Have a consistent ethics training
  4. Repay to the government if the contracting company is overpaid by the government.
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20
Q

Contractors entering into a Federal contract MUST provide the following certification

A
  1. Initial solicitation
  2. Monthly progress payment applications
  3. Davis Bacon payroll data
  4. Resolution of claims

NOTE: This is not just another form to sign.

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21
Q

“Qui Tam” Actions

A

These are incentives for whistleblowers to come forward. These must be provided by the contractor.

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22
Q

Where could one find the Contractor’s Code of Ethics (Federal Gov. Contracts)

A

FAR subpart 3.10

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23
Q

Article 2 of the U.C.C. covers ________.

A

The sale of goods.

“Goods” - Moveable items for sale

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24
Q

How did Texas react to the U.C.C.

A

Texas was slow to accept the U.C.C.

25
Q

The U.C.C. provides the right to _____ goods.

A

Reject

26
Q

According to the U.C.C. Article 2, possession of a good is equal to ______ of that good.

A

Acceptance

27
Q

Most terms within the standard U.C.C. can be modified.

True or False

A

True.

This includes indemnification clauses and shifting responsibilities within an agreement.

28
Q

An expressed warranty is a(n) ______ warranty.

A

Written

29
Q

An implied warranty is a(n) ______ warranty.

A

Assumed

Ex. A space heater that is unable to warm an average room would violate its implied warranty

30
Q

What was the verdict of the Zachry Case?

A

No Damages for Delay clause cannot be enforced when the owner is OPENLY NEGLIGENT.

Additionally, municipalities (such as the Port of Houston) are immune from suit, unless they enter into a contract.

31
Q

Due to the Zachry Case, schools, local governments, and other governmental municipalities are now at risk of being sued if they enter into a contract.

True or False

A

True.

32
Q

This clause implies that any date within the schedule is significant. Therefore, any date missed may be compensated with liquidated damages.

A

“Time is of the essence” clause

33
Q

This form of business is the simplest way to do business.

A

Sole proprietorship

34
Q

Define “insolvent”

A

Insolvent - When your debts greatly exceed your assests

35
Q

You have to be insolvent to file for bankruptcy.

True or False

A

False.

36
Q

How long does bankruptcy stay on your personal record?

A

10 Years

37
Q

Chapter 7 Bankruptcy

A

Liquidation: Give up your nonexempt assets and walk away from most debts.

“Means” Test

38
Q

Chapter 11 Bankruptcy

A

Reorganization: Give the debtor some breathing room to reorganize and return to profitability.

This option is the best for creditors

39
Q

Chapter 9 Bankruptcy

A

Reorganization for municipalities

40
Q

Chapter 13 Bankruptcy

A

Restructure: Adjustment of debts for an individual with regular income.

Eligibility Limits

41
Q

Only individuals can claim non-exempt assets during bankruptcy

True or False

A

True.

Corporations are not considered individuals in this case.

42
Q

In this contractual error, there is incomplete performance on both sides of the agreement.

A

Executory contract

43
Q

This court action prohibits all non-debtors from acting against or pursuing the debtor and its properties

A

Automatic Stay

44
Q

If a contractor goes broke during a project, the subcontractor may file a lien against the owner.

True or false

A

True.

Ex. A plumber being able to file a lien against a Holiday Inn when the general contractor goes broke.

45
Q

Define the outcome of the MasTec Case

A
  • The contract was not ambiguous
  • MasTec was declared to be “sophisticated” and aware of its responsibility within the agreement
  • MasTec assumed all risk when entering into the agreement, despite the owner’s mistake
  • The court rules against MasTec
46
Q

A “person” may enter into this form of business without the state’s permission. More than one person is necessary.

A

General Partnership

NOTE:
A person may include:
- Individuals
- Corporations
- Other partnerships
- Associations
47
Q

Two or more persons, allowed to invest in a business without exposing themselves to certain liabilities.

A

Limited Partnership

48
Q

An agreement to mutually share profits, split losses and expenses with its members. May be expressed or implied.

A

Joint Venture

NOTE:
These tend to be more specific than general partnership agreements

49
Q

Legal entities distinct and SEPARATE from its shareholders

A

Corporations

NOTE:
Shareholders are not liable for actions of the corporation

50
Q

This form of business is the “best of both worlds”, meaning that it shares the benefits common to both corporations and general partnerships.

A

LLC (Limited Liability Company)

51
Q

What is the threshold for ownership of a company by a minority (or a woman) for that business to be considered minority-owned?

A

51% minority owned or greater

52
Q

The act of a court reaching past the laws protecting company shareholders/employees, in order to hold those shareholders/employees for corporate actions.

A

“Piercing the Corporate Veil”

Ex. ENRON

53
Q

When a company acts improperly and places the blame on a subsidiary of that company.

A

“Alter Ego Company”

Ex. Parent and subsidiary companies like Converse is a subsidiary of the parent company, Nike.

54
Q

In Texas, it is legal to interfere with a contractual business relationship as a part of the “Wild West Statute” established in 1958.

True or False

A

False

If a party does interfere with a valid contract, they may be liable under tortious interference theory

55
Q

Texas law favors the enforcement of covenants not to compete, disclose or solicit when they are subject to reasonable limitations.

True or False?

A

True.

NOTE:
These limitations must be specific and consideration must be given to prove reason-ability

56
Q

Foreign companies must obtain a ____________ to do business in Texas.

A

Certificate of Authority (COA)

57
Q

Texas requires general contractors to become licensed to perform public or private construction work.

True or False

A

False.

Texas does not.

58
Q

List those who do require a license to perform work in Texas.

A
  1. Engineers
  2. Architects
  3. Landscape Architects
  4. Plumbers
  5. HVAC Contractors*
  6. Asbetos Abatement
  7. Elevators and Lifts
  8. Fire Protection
  9. Fire Detection

Law II - Advanced Construction Topics (2 decks)

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