PX : Professional Business Practice Flashcards

1
Q

213

How is mediation different from arbitration?

A

With the former, a neutral third party facilitates an agreement between the disputing parties, but the agreement is not binding. With the latter, the third party hears arguments and renders a decision according to specified rules, and the decision is binding.

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2
Q

214

What is sole proprietorship?

A

This is a type of business that is owned by an individual who is personally liable for all debts of the company.

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3
Q

215

What are some of the advantages of a partnership as a business organization?

A

Advantages of this type of organization include the following.

It is easy to form.
The work is spread among several owners.
The different and unique skills of several owners can be used.
Employees can be hired as necessary.

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4
Q

216

What is a limited liability company?

A

This is a type of business that combines the advantages of a corporation with those of a partnership.

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5
Q

217

What does general liability insurance cover?

A

This type of insurance covers a range of items, including property damage, personal injury caused by the designer or employees, and other liabilities if contractors or subcontractors do not have their own insurance.

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6
Q

218

What type of insurance should an interior designer have to protect against fire and theft?

A

Property insurance covers these situations.

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7
Q

219

What is direct personnel expense?

A

This is the expense of employee salaries plus the cost of mandatory and discretionary expenses and benefits.

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8
Q

220

What is indirect labor?

A

This is all labor NOT charged to a project or to a revenue-producing account.

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9
Q

221

What is the chargeable ratio (or utilization rate) of a business?

A

For a business, this is the percentage of time or money spent on direct labor divided by the total time or money spent on direct and indirect labor in addition to vacation, holiday, and sick leave.

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10
Q

222

What type of license would an interior designer need in order to buy furniture at wholesale and sell it at retail?

A

An interior designer would needs a sales tax license (or resale license) to do this.

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11
Q

223

In regard to interior design, what is agency?

A

This is a legal term for a relationship in which the interior designer acts on behalf of the client in dealings with a contractor or vendor.

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12
Q

224

In legal terms, what is negligence?

A

This legal term describes the failure to use due care to avoid harming another person or another person’s property.

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13
Q

225

In a designer’s contract, what purpose does an indemnification clause serve?

A

This type of clause attempts to hold harmless both the owner and interior designer for any damages, claims, or losses resulting from the performance of others with whom the interior designer has no contractual relationship.

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14
Q

226

What is a contract?

A

This is an agreement between two parties in which one party makes an offer to receive something in return for services and the other party accepts the offer.

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15
Q

227

What are seven common additional services, outside the scope of standard services, that may be provided by the interior designer?

A

These services include

investigating existing conditions or facilities
making detailed inventories of materials or furniture
assisting with graphics or signage
assisting with the procurement of art
receiving and accepting furniture on behalf of the client
making as-built drawings
participating in selection interviews with prospective contractors

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16
Q

228

What are five ways an interior designer can charge for services?

A

An interior designer can do this by means of

a fixed fee
an hourly rate
a percentage of the project cost
a rate per area (square footage) planned or designed
reselling wholesale furniture purchases at retail prices

17
Q

229

What are four primary advantages of negotiating a contract?

A

Some of the advantages of this process include

the owner can use a specific contractor
a realistic project cost is developed from the beginning
the contractor can assist in reducing the cost of the project
the contractor can point out potential problems in the design

18
Q

230

What two types of contracts are typically used on large commercial interior design projects?

A

This type of project calls for two contract types.

construction contract
contract for furniture, fixtures, and equipment

19
Q

231

What are liquidated damages?

A

These are monies paid by the contractor to the owner for every day the contractor is late at completing a project.

20
Q

232

What is the contract time?

A

This is the period from the starting date established in the agreement to the time of substantial completion.

21
Q

233

What part of a contract agreement may be used to include unique contract elements that modify the General Conditions of the Contract for Construction?

A

In a contract agreement, the Supplementary Conditions are used to modify these.

22
Q

234

What two things are required before an interior designer can resell furniture to a client?

A

To do this, a designer needs a resale license and established credit.

23
Q

235

In interior design, what type of behavior is considered negligence?

A

This is a designer’s failure to use the care ordinarily exercised in similar cases by qualified designers and the failure to use reasonable diligence and professional judgement.

24
Q

236

What are the three obligations of the interior designer during the bidding phase of a project?

A

During this phase of a project, the designer assists the owner (client) in preparing the documents and forms of agreement by

filing the necessary forms for governmental approvals
obtaining proposals
evaluating the contractors’ proposals

25
Q

237

What are the six primary phases of design services, as outlined by the AIA Standard Form of Agreement Between Owner and Architect for Architectural Interior Design Services?

A

This document outlines the following primary phases of design services.

programming
schematic design
design development
contract documents
bidding or negotiation
contract administration
26
Q

238

How is a negotiated contract different from a bid (or tendered) contract?

A

With the former, the owner selects a contractor to do the work, and the two discuss the cost and terms of the contract.

With the latter, several contractors view the contract documents and submit cost proposals.