CBC CBC Contract Law & Legal Responsibilities 2 — Questions and Answers
Question 1: A 'no-damages-for-delay' clause in a construction contract typically means:
- The contractor cannot be assessed liquidated damages
- The contractor's only remedy for owner-caused delays is a time extension, not additional money (Correct answer)
- Delay damages are limited to 5% of the contract sum
- The owner waives all rights to claim delay damages
Correct answer: The contractor's only remedy for owner-caused delays is a time extension, not additional money
No-damages-for-delay clauses bar monetary recovery for contractor delays caused by the owner, limiting the contractor's remedy to a schedule extension only.
Question 2: What is a 'differing site condition' claim in construction?
- A claim when the project design conflicts with zoning ordinances
- A claim when subsurface or concealed conditions differ materially from contract representations (Correct answer)
- A claim when the owner changes the project scope mid-construction
- A claim for additional work caused by an adjacent contractor's interference
Correct answer: A claim when subsurface or concealed conditions differ materially from contract representations
A differing site condition (DSC) claim arises when a contractor encounters subsurface or hidden physical conditions materially different from what the contract documents indicated.
Question 3: Which document is used to formally authorize changes to the contract scope, price, or schedule?
- Request for Information (RFI)
- Submittal register
- Change order (Correct answer)
- Notice to Proceed
Correct answer: Change order
A change order is a written amendment to the contract that modifies the scope of work, contract sum, or completion date and must be signed by both parties to be enforceable.
Question 4: What is the primary purpose of a 'Notice to Proceed' (NTP) issued by the owner?
- To formally authorize the contractor to begin construction work (Correct answer)
- To release retainage after substantial completion
- To instruct the contractor to accelerate the schedule
- To notify the contractor of a change in project scope
Correct answer: To formally authorize the contractor to begin construction work
A Notice to Proceed is the owner's written authorization for the contractor to mobilize and begin work, and it typically establishes the project start date for schedule purposes.
Question 5: In Florida, which entity must a contractor be licensed with to legally perform contracting work?
- Florida Department of Revenue
- Florida Department of Business and Professional Regulation (DBPR) (Correct answer)
- Florida Department of Transportation
- Florida Board of Realtors
Correct answer: Florida Department of Business and Professional Regulation (DBPR)
The Florida DBPR's Construction Industry Licensing Board (CILB) issues and regulates contractor licenses, including the Certified Building Contractor license.
Question 6: A 'pay-if-paid' clause in a subcontract means:
- The subcontractor must pay its sub-sub-contractors before receiving payment
- Payment to the subcontractor is contingent on the general contractor first receiving payment from the owner (Correct answer)
- The general contractor pays the subcontractor 50% upfront
- Subcontractor payment is due within 7 days of invoice
Correct answer: Payment to the subcontractor is contingent on the general contractor first receiving payment from the owner
A pay-if-paid clause conditions the subcontractor's right to payment on the general contractor actually receiving payment from the owner, shifting owner default risk to the subcontractor.
CBC CBC Contract Law & Legal Responsibilities 2
A 'no-damages-for-delay' clause in a construction contract typically means: