BCM Construction Law and Contracts 2

Question 1

A Notice to Proceed (NTP) in construction contracts signals:

Accepted Answer

The official authorization for the contractor to begin work on a specific date

Answer

Completion of the design phase

Answer

Approval of the contractor's schedule by the owner

Answer

Issuance of the certificate of substantial completion

Question 2

Indemnification clauses in construction contracts typically require one party to:

Accepted Answer

Hold the other party harmless from specified losses, claims, or liabilities

Answer

Pay subcontractors directly on behalf of the general contractor

Answer

Carry a minimum level of liability insurance

Answer

Submit all disputes to mandatory arbitration

Question 3

Substantial completion in construction law is typically defined as the point when:

Accepted Answer

The project is sufficiently complete for the owner to use it for its intended purpose

Answer

All punch list items have been corrected

Answer

The final payment application is submitted

Answer

The certificate of occupancy is issued by the municipality

Question 4

A subcontractor's 'pay-when-paid' clause in a construction contract means:

Accepted Answer

The GC is not obligated to pay the sub until the GC receives payment from the owner

Answer

Subcontractors must be paid within 7 days of invoice

Answer

Payment is made based on percentage of work completed

Answer

The sub receives payment directly from the project owner

Question 5

The Spearin Doctrine in US construction law holds that:

Accepted Answer

Owners impliedly warrant the adequacy of the plans and specifications they provide to contractors

Answer

Contractors are solely responsible for all design errors

Answer

Subcontractors must follow GC instructions regardless of design errors

Answer

Owners are not liable for differing site conditions

Question 6

A payment bond primarily protects:

Accepted Answer

Subcontractors and suppliers who have not been paid for labor or materials

Answer

The owner from contractor non-performance

Answer

The surety company from contractor bankruptcy

Answer

The lender financing the construction project