BCM Construction Law and Contracts

Question 1

A performance bond in construction protects the owner by:

Accepted Answer

Guaranteeing the contractor will complete the project per contract terms

Answer

Ensuring subcontractors are paid promptly

Answer

Covering property damage during construction

Answer

Providing warranty coverage after project completion

Question 2

Under the Miller Act, federal construction projects exceeding what dollar threshold require performance and payment bonds?

Accepted Answer

$150,000

Answer

$100,000

Answer

$250,000

Answer

$500,000

Question 3

A mechanic's lien in construction law gives unpaid contractors or suppliers the right to:

Accepted Answer

Claim a security interest in the improved property

Answer

Sue the general contractor in federal court

Answer

Stop construction immediately

Answer

Demand immediate payment from the project owner's bank

Question 4

The AIA A201 General Conditions document primarily governs:

Accepted Answer

The relationship and responsibilities among owner, architect, and contractor

Answer

Subcontractor payment schedules

Answer

Material specifications and testing requirements

Answer

OSHA safety compliance on job sites

Question 5

Liquidated damages in a construction contract are:

Accepted Answer

Pre-agreed daily penalties for contractor-caused project delays

Answer

Actual damages calculated after project completion

Answer

Penalties for construction defects discovered post-occupancy

Answer

Fines imposed by government regulators

Question 6

The difference between a lump sum contract and a unit price contract is:

Accepted Answer

Lump sum fixes the total contract price, while unit price pays per measured quantity of work

Answer

Lump sum includes all profit and overhead, while unit price excludes overhead

Answer

Lump sum is only used for residential projects, unit price for commercial

Answer

Lump sum requires competitive bidding, unit price does not