export_laresection 1 Flashcards
affidavit
a written statement in which the facts stated are sworn or affirmed to be true
arbitration
a contractual provision whereby those bound to it give up their right to go to court
common law
a system of law that is derived from judges’ decisions (which arise from the judicial branch of government), rather than statutes or constitutions (which is derived from the legislative branch of government)
certify
process of verifying that a record is complete
commencement of improvements
first actual preparation or construction on the site, or the first delivery to the site of substantial materials
deposition
a sworn statement of a witness or other party in a judicial proceeding
due care
a theory of tort law to explain the standard of care or the legal duty one owes to others, what a reasonable person would do under circumstances
exoneration
a request to release the surety bond
license
a privilege or right granted to a person by a state to practice a profession
limit of liability
the maximum amount for which an insurer is liable as set forth in the contract
lis pendens
a recorded legal document giving constructive notice that an action affecting a particular property has been filed in either a state or a federal court
malfeasance
the doing of an act in an improper wrongful or unlawful manner (by public official)
malpractice
failure of a professional to act in accordance with the acceptable course of conduct, negligence of a member of a profession in a professional capacity
mediation
an informal means of trying to promote settlement of liability claim with a third party mediator who meets with the parties and tries to get them to agree on a settlement
misfeasance
performing a legal action in an improper way (private)
negligence
failure to exercise that degree of care which an ordinary prudent person would exercise under the same or similar circumstances
original contractors
a contractor who has contractual relationship with the owner
petition
a written request to the court for legal action, which begins a court case
remand
the decision of an appellate court to send a case back to the trial court with instructions on how to correctly decide the case, often used with the term “reversed”
statue of repose
set of laws used to define the maximum time period for filing claims against professionals
summary judgment
judgment entered when there is no genuine issue of material fact and party is entitled to prevail as a matter of law
statute of limitations
time limit within which as civil or criminal action may be brought after its cause arises
tort
a private wrong, independent of contract and committed against an individual, which gives rise to a legal liability and is adjudicated in civil court
tort law
aims to restore the injured person to the position he or she was in before the tort was committed (the expectation or rightful position principle)
addendum
document that addresses changes or modifications made to the contract and issued prior to the bidding process
competitive bid
a process whereby an underwriter submits a sealed bid to the issuer. the issuer awards the contract to the underwriter with the best price and contract terms
lump sum
comprised of a one total price to complete all of the work
unit price bids
based on predetermined major items of work, the items’ quantities and the contractor’s price per unit multiplied by the total quantity to create the total cost for each major item of work
fixed price contract
price is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract
cost-plus-fee contract
normally negotiated between the owner and the contractor. In most cses, the owner pays actual costs of construction plus an additional mount based on a fixed percentage of the project’s cost
notice of award
written notice by the Owner to the apparent successful bidder stating that upon compliance by the bidder with the conditions presented in the notice the Owner will the agreement
notice of proceed
written notice from the Owner to the Contractor that establishes the date on which the Contractor shall begin performing its duties and obligations as outlined in the Contract Documents
live loads
consist of the people, furniture and other items that are not part of the building, but are supported by the building
dead load
weight of the building or structure itself
contract form
dictates form of bidding conditions
-agreement
- performance and payment bonds
- certificates
technical specifications
prepared for each specific project in the CSI Master format. individual items that will be installed in the project
retainage
a portion of a contract payment that is withheld until contract completion to ensure full performance of the contract terms
assignment
refers to the transfer of an obligation from one person or firm to another
negation
canceling of a prior action
contingency
requires a certain act to be done or a certain event to occur before the contract becomes binding
binding arbitration
parties agreeing to accept as final the arbitrator’s decision
nonbinding arbitration
parties free to not accept the arbitrator’s decision and to seek satisfaction through other means, including lawsuit
mediation
parties agreeing to enter into good faith negotiations through a neutral mediator in order to attempt to resolve their differences
change order or work change directive
modifies (add/delete/change) the plans and specifications and/or the price and the contract time of the construction contract
contract admendment
provides for a change of contract provisions, including additional work outside the scope of the original contact
stop work order
a demand to stop an ongoing work activity due to a real or perceived dangerous operation or condition
quality circle
composed of project principals who meet on a frequent basis to identify, discuss and solve productivity and quality problems
substantially completed
that stage in the progress of the work of minor items that do not impair the owner from occupying and fully utilizing the work for its intended purpose
punch list
list of items to be completed or corrected by the contractor before substantial completion can be established
Final Completion
The completion of all work in accordance with the terms and conditions of the contract documents.
liquidated damages
specific sum of money stipulated by the contracting parties as the amount to be recovered for each day of delay in delivery of the product
bonus
refers to a certain percentage of the payment that is awarded to the contractor for finishing the job ahead of schedule
shop drawings
drawings, diagrams, schedules and other data specifically prepared for the work, by the contractor or a subcontractor, to illustrate some portion of the work
surety company
the entity responsible for fulfilling the contract in the event the original contractor defaults for any reason
bonds
include bid, performance, payment, maintenance and other instrument of security
bid bond
submitted with the bid by the contractor. security to the owner that the successful bidder will enter into an agreement for the work and not withdraw or nullify its bid after submission
indemnification
part of an agreement that provides for one party to bar the monetary cost, either directly or by reimbursement, for losses incurred by a second party
maintenance bond
guarantees the owner that any defects found after the work has been completed will be corrected by the original contractor or other agent of the surety company
performance bond
guarantees the owner that the project will be completed for the contract price in the event the original contractor fails to perform the work
Statutory Bond
guarantees the owner that all labor, equipment, and materials will be completely paid for in the event the original contractor fails to perform the work
prevailing wages
under these laws, federal contractors must pay their employees at rates at least equal to ___ wages in the local area.
30% of the local labor force
cost plus or cost plus fee agreement
contractor is reimbursed for direct and indirect costs and in addition is paid a fee for its serves. Fee is usually stated as a percentage of cost, but may be fixed amount. The agreement may or may not include a guaranteed max price or a savings split.
Percentage of Construction Cost
A method of compensation for construction or professional services based on a percentage of the total cost of construction
Percentage of Prime Consultant Fee
- a method based on a portion of the project cost set using the prime consultant’s fee amount in some percentage as the subconsultant’s fee
- does not limit overall cost
guaranteed maximum upset
sets a guaranteed maximum or ceiling price to owner for the cost of construction
stipulated sum agreement
a written agreement in which a specific amount is set forth as the total payment for completing the contract
unit price contract
owner agrees to pay the contractor a specified amount of money for each unit of work successfully completed as set forth in the contract, includes all extra costs incidental to the item
payment bonds
gives protection to the owner if the subcontractors and suppliers are not paid by the prime contractor
lien
a claim or charge on property for the payment of a debt
addenda
formal changes or clarifications issued to all identified bidders by the owner or the owner’s representative during the bidding period
agency agreement
an arrangement between a principal and an agent by which the agent agrees to perform certain tasks for the principal, the principle is bound by the actions of the agent
ADR - alternative dispute resolution
a means used for settling conflicts by means of an alternative procedure to formal litigation
additional work
construction work that was not recognized at the contract award but that must be performed in order to deliver a project as planned.
arbitration
a well-established alternative to litigation in which the conflict is resolved by an impartial third party or an impartial panel of selected individuals
balanced bid
a unit price bid that accurately reflects the actual anticipated price of each item of work to be performed
bid bond
a surety instrument that guarantees to the owner that the bearer, if awarded the contract, will enter into a binding contract and provide all required bonds
bid peddling
the effort by a bidder, usually a subcontractor, on a project to determine the relative standing of a quoted bid.
bilateral contract
an agreement made through the mutual promises of the contracting parties
biolerplate
the general conditions that outline the roles of the parties to a construction agreement and provide guidance concerning procedures to follow under varying circumstances
bonding capacity
the maximum amount of uncompleted construction work that a contractor can have under contract, above which no bonds will be provided.
brokerage
a situation in which the general contractor subcontracts all the work on a project
builder’s risk insurance
construction insurance that provides coverage specifically for a project that is under construction. although this is normally considered to be fire insurance, other types of losses are also generally covered
calendar days
the time unit that may be used to define the duration of construction
cardinal change
a change order that is of such magnitude that the original scope of the project is altered to an extent that constitutes a new contract
caveat emptor (let the buyer )
a defense, no longer valid, in which it is assumed that a product must be accepted with whatever flaws exist at the time of purchase.
certificate of insurance
a written document that serves as evidence that a particular insurance policy is in force
change order
a directive, usually authorized in writing by the owner to alter or modify some aspect of a project. such a directive is generally accompanied by an adjustment to the contract amount and/or the contract duration
closed specification
a specification that is expressly restrictive in stating that only one or two products will satisfy the requirement
code of ethics
the written standards of behavior adopted by a profession
completion date
the time of construction; stated not in terms of a specified duration, but as a specified date by which construction must be complete
complimentary bid
a bid that is not prepared in earnest, but is presented to appear as such. Such bids are usually generated through collaborative efforts with another bidder who does submit a serious bid
condemnation
exercise of eminent domain to seize private property
constructive acceleration
an increase in the pace of construction that is not a result of a directive but is done by inference. Denial of a legitimate request for a time extension, such as for an excusable delay or a change order, would be an example
cost-plus contract
a contract in which the contractor is reimbursed for specified incurred cost, with an additional allowance provided for overhead and profit
critical activity
an activity in a construction schedule that must be completed in the time allotted for its completion or the project duration will be increased
dedication
public permission granted by the owner of property for the public to use a given parcel of land for a specified use
differing site conditions
physical conditions on a site that differ from what was shown in the bidding documents or from what would reasonably be expected
dividends
monetary return made by insurance companies to clients who have kept losses to an acceptably low level. also, profits of corporations shared with stockholders
dual gates
two entrances establish on a construction project where both union and nonunion workers will be employed.
easement
a restricted use of private land granted to another party
eichleay formula
a means by which delay reimbursement can be made to the contractor to compensate for home office overhead. This is a controversial approach that is not accepted universally
eminent domain
the right of the federal government, state government, or another public agency to take possession of private property and appropriate it for public use
estoppel
the legitimate, though implied, formation of a contract as evident through the actions of the parties involved. When one party places a reliance on the other party based that party’s actions, the second party cannot subsequently deny that an agreement exists
exclusions
specific items stated in an insurance policy for which no coverage is provided
exculpatory provisions
contract clauses that shift liability from one of the contracting parties to the other. in the absence of such a clause, the shift in risk will not occur
executed contract
an agreement in which both parties have fully performed in accordance with the contract terms
executory contract
an agreement in which one or both parties to the agreement have not yet performed
experience modification rating
a factor, unique to a company, that reflects the past claims history of that company. This factor is used to increase or decrease the basic insurance premium charges
express contract
an agreement in which the terms of the agreement, whether verbal or written, are clear, concise, explicit and definite
express warranty
the specific statement n a contract that a warranty is to be effective on a project
field change
an authorized directive, usually by the owner’s representative on project, to alter or modify some aspect of the project. normally, such a directive is not accompanied by any change in the contract amount or duration
final completion
the status of a project when all punch list items have been satisfactorily address and the owner officially accepts the project. At this point, the retainage can be released to the contractor
force account
arrangement in which the services of a contractor are reimbursed on a cost-plus basis; also referred to as a time and materials contract.
front-loading
a plan initiated by a contractor in which a disproportionate share of the payments to be made to the contractor is made early in the life of the project. This is a means of getting the owner to finance a greater share of the project
general contract method
a common procedure in which the owner of a project contracts with a single firm, often called a prime contractor, for its construction. This firm may contract with specialty contractors for portions of the work
holding company
a firm that has a dominant interest in one or more other companies so as to be able, through its voting power, to prescribe the management policies of those companies
housing starts
the number of new homes placed under construction in a stipulated period of time, generally one month. This figure is used as an indication of the strength of the US economy.
implied contract
an agreement in which th terms of the agreement are not clearly stated but are established through inferences and deduction
implied warranty
the general interpretation in the courts that a warranty exist despite the fact that there is no express warranty
inclusions
specific items, as stated in an insurance policy, for which coverage is specifically provided
indemnification
an exculpatory provision in which one party to an agreement agrees to hold the other party harmless. That is, one party assumes the liability that would normally fall on the another party.
independent contractor
a contractor hired to produce a product without being specifically supervised or constrained by specific methods and means of performance.
joint venture
a company formed by two or more companies in which the sole objective is typically to construct a single project
letter of credit
a demand instrument issued by a bank that guarantees the availability of a specified amount of funds to be paid to the owner in the event of contractor default.
limited partner
a partner who contributes to a partnership and shares in the profits and losses, but provides no services and has no vote in matters of management
limits of liability
the maximum coverage for which a specific liability policy is written
liquidated damages
a specified sum of money that is charged against a contractor for reach day that project completion is delayed. This amount is assumed to accurately reflect the anticipated costs of late completion
litigation
a means of resolving disputes in the judicial system in which a formal claim is filed and the disputing parties typically obtain the services of lawyers
loss ratio
a quotient that reflects the amount of funds expended by an insurance company for the claims of a client, divided by the amount of premiums paid by that client
lump sum contract
a contract in which the contractor agrees to construct a project for a specified sum of money
mechanic’s lien
a right created by law that permits a worker to place a claim on land on which improvements have been made
mediation
an alternative to litigation in which knowledgeable individuals’ talents are used to get the disputing parties to agree on a compromise resolution to the conflict
meeting of the minds
a basic ingredient in contracts in which the contracting parties agree on the basic meaning and legal implicaton s of a contract
minitrial
an alternative to litigation in which one or more individuals are asked to hear a
no-damage-for-delay clause
a contract provision that is exculpatory in nature and is intended to bar the contractor from receiving monetary compensation of any kind for any delays that may occur on a project regardless of the source of the delay
notice to proceed
a means of notifying the contractor about the decision to award the contract and of specifying when the contract time will start
obligee
a party to whom a duty is promised by the surety
offer
occurs when one person signifies to another a willingness to enter into a bidding contract on certain specified terms
open specification
an open or nonrestrictive specification in which a wide variety (three or more) of products are considered suitable
payment bond
a surety instrument guaranteeing the bearers payments to suppliers, laborers, and subcontractors
penalty provision
a specified sum of money that is charged against a contractor for each day that project completion is delayed. The amount is greater than the amount of the liquidated damages because a portion of it is considered a punitive assessment.
performance bond
a surety instrument in which the faithful performance of a contractor is guaranteed up to the face value of the bond
performance specification
a descriptive requirement that states the results or the performance of the finished product rather than the specific methods and means used to construct the product
post bid shopping
the efforts of a general contractor to get subcontractors to lower their bids after the general contractor has been declared the low bidder
premium
a payment made to an insurance company in exchange for a specific type of coverage
prescription
the legal transfer of private property to a public agency or another private citizen that can occur when that property has been subjected to adverse use for a stipulated number of years
professional construction management method
a method in which the owner hires a construction management firm to perform professional services and represent the owner during the design and construction phases.
progress payment
a payment to the contractor that compensates the contractor for work performed up to a given date. Such payments generally are made monthly and are reduced by a given percentage that is retained by the owner until final completion
progress schedule
an updated construction schedule that presents an accurate portrayal of the work accomplished up to a given date.
Proprietorship
a business owned and run by a single individual
punch list
a list developed at the time of substantial completion that itemized all remaining work tasks that must be performed before a project reaches final completion
quantum meruit
literally,”as much as he deserves” an expression describing the extent of liability on a contract implied in law (quasi contract). An equitable doctrine based on the concept that one who benefits from another’s labor and materials should not be unjustly enriched thereby but should be required to pay a reasonable about for the benefits received, even absent a contract
Ratification
The acceptance or confirmation of an act or agreement that gives legal force to an obligation that previously was not enforceable.
real property
land and all items physically attached to it, such as buildings, fences, utilities and walls
Reference Standard specification
A type of performance specification where items specified must meet certain requirements set by an accepted authority or test method, such as (UL) Underwriter’s Laboratories, (ASTM) American Society for Testing and Materials, or ANSI
regular bid
a bid that conforms to the standards outlined in the instructions to bidders. Only such bids can be considered on public works projects to assure all bidders of fair and equal treatment
reserve
a given sum of money that an insurance company sets aside to cover anticipated claims costs on a case that is not closed
Retainage
A certain percentage of money owed to the contractor for work progress that is held back by the owner to encourage completion of the project
self-insurance
an arrangement by which a firm acts as it own insurance company, specific criteria must be satisfied for a company to qualify
self-performance
a mechanism by which no contracts are awarded for a construction project. the owner’s own workers or employees are solely responsible for the construction effort
Separate Contracts Method
owner has separate contracts to specialty contractors; owner is the general contractor
site investigation
an inspection of a proposed construction site during the bidding phase. such an inspection is often contractually required to verify that the contractor is familiar with the site
specialty contractors
firms with skills in specific areas of construction work. such firms are typically involved in construction projects as subcontractors
standard specificatioins
a compilation of general conditions, technical specifications and other requirements that an agency uses on numerous construction projects. such documents are prepared by state departments of transportation and many major municipalities
Stockholders
owners of a corporation due to their purchase of stock in the corporation
subcontractor
a specialty contractor who enters into a agreement with a general contractor – no contractractual agreement with the owner
submittals
information concerning products to be incorporated in a construction project that must be approved by the owner before they are used.
Subrogation
this is the legal process by which an insurance company seeks recovery of the amount paid to the insured from a 3rd party who may have caused the loss. Through this, the insured cannot collect twice.
Substantial Completion
The stage in the procress of the work when the work or designated portion thereof is sufficiently complete in accordance with the contract documents so that the owner can occupy or utilize the work for its intended use
supplementary conditions
modifications or additions to the general conditions that address issue that were omitted in the general conditions, or are specific requirements for a particular project
surety
a firm that guarantees or vouches for the performance or indebtedness of another party
suspension of work
a halt in the construction process
technical specifications
a document that provides the qualitative requirements for a project in terms of materials, equipment, work performed and so forth
termination
the cancellation of a contract before construction is complete
tort
a wrong committed by a person against a second party as a result of an act or the failure to act when that person had a duty to the second party
ultra vires contracts
agreements made by corporations for which the proper authorization was not made. Such agreements must often be ratified in order to be binding.
umbrella coverage
an insurance policy that is generally used to provide coverage in excess of the limits of coverage of another insurance policy
unbalanced bid
a unit price bid in which the pricing of the various items of work does not reflect the actual anticipated costs, but redistributes those costs to serve a specific objective of the bidder.
unilateral contract
a contract in which only one of the contracting parties makes a promise. the other party exchanges something other than a promise, commonly performance
unit price contract
a contract in which payment is bases on a contractor’s quoted price per unit of work performed and the owner’s measurements of the total number of such units installed.
Unjust enrichment
a circumstance under which one party benefits ar the expense of another without equitable compensation given to the party that provided the labor and or materials
Value Engineering
A review process of proposed systems & materials used to explore less expensive options that will achieve the same result.
warranty
certification that a certain aspect of a project is of the quality it was promised to be. in construction, such assurances are provided for one year from substantial completion
workers’ compensation
insurance coverage for the employees of a firm during their employment
working days
the time unit used to define the duration of a construction project
wrap-up insurance
insurance for a project that is obtained entirely by the owner
zoning
restrictions placed on land usage to assure orderly growth and development in a municipal area
