CBC CBC Contract Law & Legal Responsibilities

Question 1

Which element is NOT required to form a legally enforceable construction contract?

Accepted Answer

Notarization by a public notary

Answer

A valid contract requires offer, acceptance, consideration, competent parties, and legal purpose — notarization is not a general requirement for enforceability.

Question 2

What is a 'mechanic's lien' in the context of Florida construction law?

Accepted Answer

A security interest on real property filed by unpaid contractors or suppliers

Answer

A mechanic's lien (construction lien in Florida) gives unpaid contractors, subcontractors, and material suppliers a claim against the property to secure payment.

Question 3

In Florida, a contractor must serve a Notice to Owner (NTO) within how many days of first furnishing labor or materials to preserve lien rights?

Accepted Answer

45 days

Answer

Under Florida's Construction Lien Law, contractors not in privity with the owner must serve a Notice to Owner within 45 days of first furnishing to preserve lien rights.

Question 4

A 'liquidated damages' clause in a construction contract specifies:

Accepted Answer

A pre-agreed daily dollar amount the contractor pays for each day of delay

Answer

Liquidated damages clauses establish a fixed per-day amount the contractor owes for each day the project exceeds the contractual completion date.

Question 5

What does 'indemnification' require of a contractor under most construction contracts?

Accepted Answer

To hold the owner harmless from claims arising out of the contractor's work

Answer

An indemnification clause obligates the contractor to defend, indemnify, and hold harmless the owner against losses caused by the contractor's negligence or breach.

(CBC) Certified Building Contractor Practice Test

(CBC) Certified Building Contractor Practice Test

CBC CBC Contract Law & Legal Responsibilities