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

An NTP is the formal written authorization from the owner to the contractor to commence work, starting the contract time clock.

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

Indemnification provisions shift legal and financial responsibility for certain claims or losses from one party to another.

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

Substantial completion marks when the owner can occupy and use the project, even if minor items remain, triggering important contractual milestone payments.

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

Pay-when-paid clauses condition the GC's obligation to pay subs on receipt of owner payment, shifting some payment risk downstream.

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

Under Spearin v. U.S. (1918), the Supreme Court established that an owner who furnishes plans warrants their sufficiency, protecting contractors who follow defective plans.

BCM - Bachelor of Construction Management Practice Test

BCM - Bachelor of Construction Management Practice Test

BCM Construction Law and Contracts 2