BCM Construction Law and Contracts 1

Question 1

A performance bond in construction protects the owner by:

Accepted Answer

Guaranteeing the contractor will complete the project per contract terms

Answer

A performance bond is a surety guarantee that the contractor will fulfill all contractual obligations, protecting the owner if the contractor defaults.

Question 2

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

Accepted Answer

$150,000

Answer

The Miller Act mandates performance and payment bonds on federal contracts exceeding $150,000 to protect taxpayers and subcontractors.

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

A mechanic's lien encumbers the property title, giving unpaid parties a legal claim against the real estate as security for payment.

Question 4

The AIA A201 General Conditions document primarily governs:

Accepted Answer

The relationship and responsibilities among owner, architect, and contractor

Answer

AIA A201 is the standard general conditions document that defines duties, rights, and procedures for the construction contract triad.

Question 5

Liquidated damages in a construction contract are:

Accepted Answer

Pre-agreed daily penalties for contractor-caused project delays

Answer

Liquidated damages are a predetermined compensation amount per day of delay, agreed upon because actual delay damages are difficult to calculate.

BCM - Bachelor of Construction Management Practice Test

BCM - Bachelor of Construction Management Practice Test

BCM Construction Law and Contracts 1