Contract Administration Flashcards

A clause sets $2,000 per day for late completion. When will a court most likely refuse to enforce it?

Answer: When the amount is a penalty rather than a reasonable pre-estimate of damages

Courts enforce liquidated damages that reasonably estimate hard-to-calculate damages, but reject amounts that act as penalties.

Which type of delay usually entitles a contractor to a time extension but no additional money?

Answer: Unusually severe weather

Severe weather is generally an excusable but non-compensable delay.

Under AIA A201, how long is the standard correction period after Substantial Completion?

Answer: One year

A201 §12.2.2 sets a one-year correction period starting at Substantial Completion.

Under the federal Miller Act, which bonds must a prime contractor provide on qualifying federal construction contracts?

Answer: Performance bond and payment bond

The Miller Act requires performance and payment bonds on federal construction contracts above the statutory threshold.

A second-tier supplier with no direct contract with the prime contractor wants to claim on a Miller Act payment bond. What notice must it give?

Answer: Written notice to the prime contractor within 90 days of last furnishing labor or material

Second-tier claimants must give written notice to the prime contractor within 90 days of the last furnishing.

What is the primary purpose of AIA G703?

Answer: Listing schedule-of-values line items and progress for a payment application

G703 is the continuation sheet to the G702 payment application; it details each schedule-of-values line.

Which clause makes the owner's payment to the general contractor a condition precedent to the GC paying its subcontractor?

Answer: Pay-if-paid

A pay-if-paid clause shifts the risk of owner nonpayment to the subcontractor; a pay-when-paid clause only sets timing.