LAW IN PRACTICE - ARCHITECTURE

Question 1

LEGAL STRUCTURES OF ARCHITECTURE FIRMS

Answer 1

1. Sole Proprietorship
2. General Partnership
3. Limited Liability Partnership
4. Professional Limited Liability Partnership
5. Subchapter C Corporation
6. Subchapter S Corporation
7. Professional Corporation
8. Limited Liability Corporation
9. Professional Limited Liability Corporation

Question 2

SOLE PROPRIETORSHIP

Answer 2

1. Ownership: Individual Practitioner
2. Management: Individual Practitioner
3. Liability Protection: none
4. Tax Treatment: Does not file a federal return or pay taxes; income/losses passed through to individual
5. Secretary of State Filings: None
6. State Registration Board Filings: Typ not required

Question 3

GENERAL PARTNERSHIP

Answer 3

1. Ownership: Partners
2. Management: Partners
3. Liability Protection: None
4. Tax Treatment: Files federal return, but does not pay taxes; income/Loses passed through to individual owners
5. Secretary of State Filings: None
6. State Registration: Many states req. Certificate of Authority COA; Varying req. for licensing partners

Question 4

LIMITED LIABILITY PARTNERSHIP (LLP)

Answer 4

1. Ownership: Partners
2. Management: Partners
3. Liability: Partners personally liable but typ protected agains other claims (except extreme wrongdoing)
4. Tax Treatment: Files federal return, but does not pay taxes; income/Loses passed through to individual owners
5. Secretary of State Filings: LLP certificate for formation state and foreign states
6. State Registration: Many states req. COA, Varying req. for licensing partners

Question 5

PROFESSIONAL LIMITED LIABILITY PARTNERSHIP (LLP)

Answer 5

1. Ownership: Partners - all typ licensed
2. Management: Partners - all typ licensed
3. Liability: Partners personally liable but typ protected agains other claims (except extreme wrongdoing)
4. Tax Treatment: Files federal return, but does not pay taxes; income/Loses passed through to individual owners
5. Secretary of State Filings: LLP certificate for formation state and foreign states
6. State Registration: Many states req. COA, all partners typ licensed; LLP may need min lvl of prof liability insurance (PLI)

Question 6

SUBCHAPTER C CORPORATION (C CORP)

Answer 6

1. Ownership: Stockholders
2. Management: Directors, Officers
3. Liability: Stockholders may be personally liable for their own prof negligence but typ protected against other claims (except extreme wrongdoing)
4. Tax Treatment: Files federal return, pays taxes; profits passed through as dividends to stockholders, who pay double taxation on individual returns
5. Secretary of State Filings: Articles of organization, for formation state and foreign states
6. State Registration: Many states req. COA; varying req. for licensing of stockholders, directors, and officers; a few states permit only professional corporations

Question 7

SUBCHAPTER S CORPORATION (S CORP)

Answer 7

1. Ownership: Stockholders (no more than 100 who must be U.S. citizens or resident aliens)
2. Management: Directors, Officers
3. Liability: Stockholders may be personally liable for their own prof negligence but typ protected against other claims (except extreme wrongdoing)
4. Tax Treatment: Files federal return, but does not pay taxes - income (and some losses) passed through to individual stockholders
5. Secretary of State Filings: Articles of organization, for formation state and foreign states
6. State Registration: Many states req. COA; varying req. for licensing of stockholders, directors, and officers; a few states permit only professional corporations

Question 8

PROFESSIONAL CORPORATION

Answer 8

1. Ownership: Stockholders - all must typ be licensed
2. Management: Directors, Officers - all must typ be licensed
3. Liability: Stockholders may be personally liable for their own prof negligence but typ protected against other claims (except extreme wrongdoing)
4. Tax Treatment: Files federal return, but does not pay taxes - income (and some losses) passed through to individual stockholders
5. Secretary of State Filings: Articles of organization, for formation state and foreign states
6. State Registration: Many states req. COA; all stockholders, directors, and officers must typ be licensed; corp may need to carry min. lvl of PLI

Question 9

LIMITED LIABILITY CORPORATION (LLC)

Answer 9

1. Ownership: Members
2. Management: Managers
3. Liability: Members may be personally liable for their own prof. negligence but typ. protected against other claims (except for extreme wrongdoing).
4. Tax Treatment: If LLC selects, partnership - files federal return bu does not pay taxes - income/losses passed through to individual owners
5. Secretary of State Filings: LLC certificate, for formation state and foreign states
6. State Registration: Many states req. COA, carying req. for licensing of members and managers; a few states permit only professional LLCs

Question 10

PROFESSIONAL LIMITED LIABILITY CORPORATION (LLC)

Answer 10

1. Ownership: Members - all typ. licensed
2. Management: Managers - all typ. licensed
3. Liability: Members may be personally liable for their own prof. negligence but typ. protected against other claims (except for extreme wrongdoing).
4. Tax Treatment: If LLC selects, partnership - files federal return bu does not pay taxes - income/losses passed through to individual owners
5. Secretary of State Filings: LLC certificate, for formation state and foreign states
6. State Registration: Many states req. COA; all members and managers typ must be licensed; LLC may need min. PLI

Question 11

6 ELEMENTS OF STRATEGIC BUSINESS PLAN

Answer 11

1. MISSION
2. VISION
3. ISSUES AND INITIATIVES
4. GOALS
5. STRATEGIES
6. ACTION PLANS

Question 12

RETURN ON OVERHEAD (ROO)

Answer 12

calculated by dividing the profits contributed by a branch office by the amount of overhead expense incurred at that office.

Question 13

CERTIFIED DESIGN FIRM ADMINISTRATOR (CDFA)

Answer 13

credential offered by the society for design administration recognizes individuals who have demonstrated proficiency office admin at design firms

Question 14

SWOT

Answer 14

Strengths
Weaknesses
Opportunities
Threats

Question 15

JURISDICTION

Answer 15

the court has authority to hear a case and impose a remedy

Question 16

A CASE CAN BE BROUGHT TO FEDERAL COURT

Answer 16

if dispute involves the US Constitution or federal statue, or is between citizens of different states and involves an aggregate claim of more than &75,000

Question 17

STARE DECISIS

Answer 17

policy of adhering to principles established by decisions in earlier cases

Latin for “let the decision stand”

followed by ‘common law’ but not in ‘civil law’

Question 18

UNITED STATES CODE (U.S.C)

Answer 18

The code of laws of the United States of America is the official compilation and codification of the general and permanent federal statues of the United States.

It contains 53 differens subjects or “Titles” and published every 6 years

states often make amendments and adjustments to adopted codes from this library

Question 19

UNIFORM CODES

Answer 19

set of model statutes related to a particular subject that can be adopted by the states. Once adopted by a state, the code becomes the law in the state.

A state may adopt all or part of a uniform code.

The International Building Code (IBC) is an example of a uniform code. It is published by the International Code Council (ICC).

Question 20

CHOICE-OF-LAW

Answer 20

a clause that indiates which state’s law will goern any disputes. Generally, it must be either the stae in which the project is located or the stae in which either party attached to the contract is located.

Question 21

CIVIL LAW

Answer 21

deals with disputes between indivisduals, organizations, or government agencies, in which compensation or some other remedy may be awarded to the injured party.

The party that brings the case (plaintiff) is typically awarded money damages if it prevails on its claim against the other party (defendant).

Question 22

CRIMINAL LAW

Answer 22

comprises rules prohibiting conduct that threatens, harms, or otherwise endangers the safety and welfare of the public, and sets out the punishment to be imposed on those who break these rules.

Criminal lawsuites are filed by the government against individuals or organizations that have violated criminal statutes.

Question 23

PAROL EVIDENCE

Answer 23

evidence of the parties’ discussions (oral or written) before and at the time the contract was signed

Question 24

TORT LAW

Answer 24

based on legal obligations created by statute or through judicial opinions. The goal of tort law is to protect people from unexpected and overwhelming misfortunes through the fault of others and to compensate them when such misfortunes occur.

1. Intentional Tort (often uninsurable (assault, ex)
2. Unintentional Torts (negligence)
3. Strict Liability Torts

Question 25

PUNITIVE DAMES / EXEMPLARY DAMAGES

Answer 25

designed to punish malicious wrondoers and deter others from behaving in a similar fashion.

Question 26

COMPENSATORY DAMAGES

Answer 26

attempt to make the victim whole by placing a monetary value on the harm done.

Question 27

LEGAL DOCTRINES

Answer 27

framework or set of rules established by precedent in the common law, through which judgments can be determined on a particular issue.

Question 28

CAUSE OF ACTION

Answer 28

a legal theory which a plaintiff brings a lawsuit is referred to as the cause of action plaintiff initiates a lawsuit by filing a complaint w/ the approp court - The complaint must state both the cause of action for the injury that the plaintiff claims and the legal remedy - The defendant must file an answer to the complaint within a certain number of days

Question 29

ACTUAL VS PROXIMATE CAUSATION

Answer 29

actual is also refrred to as 'cause in fact' means teh injury would not have happened 'but for' the defendant's action. Proximate causation means that the injury is sufficiently related to the defendants conduct that liability should attach - in most states proximate cause is based on foreseeability

Question 30

MISREPRESENTATION IN TORT LAW

Answer 30

the tort that arises most often in the construction industry The party alleging injury must have relied on the misrepresentation, the reliance must have been reasonable, and the party must have suffered its injury as a result of this reliance. Misrepresentation can either be negligent or intentional; intentional representation is referred to as fraud

Question 31

PERFORMANCE BOND AND PAYMENT BOND

Answer 31

Often the owner's construction lender will require the contractor to provide a performance bond and payment bond Performance Bond ensures that funds will be available to complete the project if the contractor defaults Payment Bond ensures funds will be available to pay subs and suppliers if the contractor fails to do so

Question 32

CONSTRUCTION LOANS

Answer 32

a loan is used to pay for construction and the developer often needs a 'take-out-loan' to repay the original loan used for construction.

Question 33

FEDERAL ACQUISITION REGULATION (FAR)

Answer 33

the process by which the fed govt acquires goods and services - collectively referred to: Federal Acquisition Regulation System. Implement the laws passed by Congress to govern acquisition planning, contract formation, and contract administration. Purpose: consolidate agency acquisition regulations into one set of regulations - however, almost every department has supplemental regulations FAR and its uspplements comprise Title 48 of the US Code of Federal Regulations (CFR)

Question 34

Christian Doctrine

Answer 34

Case, GL Christian and Assoc vs United States essentially, govt regulations have the force and effect of the law, and govt personnel may not deviate from the law w/o proper authorization Contractors are expected o know what the law requires as well as the limitations of the authority of govt acquisition personnel

Question 35

OWNER AUDIT RIGHTS

Answer 35

fixed-price contract, contractor has no obligation to disclose its costs to the owner cost-plust contract, owner may insist on the right to audit contractor's records

Question 36

UNIFORM COMMERCIAL CODE

Answer 36

a comprehensive set of laws governing all commercial transactions in the United States. Not a federal law, but a uniformly adopted state law.

Question 37

the FALSE CLAIMS ACT (FCA)

Answer 37

goal was to prevent fraud in govt contracting enacted 1863 in response to privateering during the civil war - recent years it has been used to combat fraud in the health-care industry under FCA, contractor can be liable for submitting overstated progress payment requests

Question 38

DIFFERING SITE CONDITIONS CLAUSE

Answer 38

purpose: shift the risk of unknown physical conditions to the govt so that contractor does not have to inflate its bid. Fed procurement regulations require the govt to include a Differing Site Conditions clause in any fixed-price contract that exceeds the simplified acquisition threshold two types of diff site cond clauses/claims TYPE I / Conditions Materially Different Than Indicated TYPE 2 / Conditions of an Unusual Nature

Question 39

WAIVER OF SUBROGATION

Answer 39

ex of subrogation: if the contractors insurer was forced to pay the owner for damage caused by a subcontractor, the insurer could sue the subcontractor for reimbursement - unless waiver of subrogation is waived AIA A201 req owner and contractor to waive their subrogation rights against each other and also req them to include waivers of subrogation in their other contracts

Question 40

MILLER ACT

Answer 40

A federal law that req general contractors working on federally funded construction projects to obtain performance and payment bonds.