CBP Contract Administration and Legal

Question 1

Which document legally binds a contractor to perform specific work for an agreed-upon price and timeline?

Accepted Answer

Construction contract

Answer

Work order

Answer

Bid proposal

Answer

Project schedule

Question 2

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

Accepted Answer

A legal claim against a property by unpaid contractors or suppliers

Answer

A warranty on installed mechanical systems

Answer

An insurance policy for equipment damage

Answer

A permit required for HVAC work

Question 3

What type of bond guarantees that a contractor will complete a project according to the contract terms?

Accepted Answer

Performance bond

Answer

Payment bond

Answer

Bid bond

Answer

Maintenance bond

Question 4

In construction contracts, what does 'substantial completion' typically mean?

Accepted Answer

The project is complete enough for its intended use, with only minor items remaining

Answer

All punch list items have been resolved

Answer

The contractor has been paid in full

Answer

50% of the work has been finished

Question 5

What is a change order in a construction contract?

Accepted Answer

A written amendment modifying the original contract scope, price, or schedule

Answer

An order to replace defective materials

Answer

A request to change subcontractors

Answer

A notice to stop work temporarily

Question 6

What are liquidated damages in a construction contract?

Accepted Answer

A pre-agreed dollar amount the contractor pays for each day the project is delayed past the completion date

Answer

Compensation for materials damaged on site

Answer

Penalties for defective workmanship

Answer

Court-ordered damages after litigation