CC Contract Law and Lien Rights

Question 1

What is a mechanics lien?

Accepted Answer

A legal claim against a property for unpaid construction work or materials

Answer

A type of vehicle tax

Answer

A surety bond requirement

Answer

A permit for heavy equipment

Question 2

Which of the following is typically required before a contractor can file a mechanics lien?

Accepted Answer

Serving a preliminary notice to the property owner

Answer

Filing a police report

Answer

Obtaining a new contractor license

Answer

Getting a building permit

Question 3

What does 'prompt payment' legislation require of general contractors regarding subcontractors?

Accepted Answer

Subcontractors must be paid within a set number of days after the GC receives payment

Answer

Subcontractors must be paid before the project starts

Answer

Payment must be made in cash only

Answer

GCs must pay subcontractors before receiving payment from the owner

Question 4

A 'lien waiver' is signed by a contractor to:

Accepted Answer

Release their right to file a mechanics lien upon receipt of payment

Answer

Apply for a new license

Answer

Extend the project deadline

Answer

Transfer the contract to another party

Question 5

What is the 'statute of limitations' for filing a mechanics lien?

Accepted Answer

A state-specific deadline by which a lien must be filed after project completion or last work date

Answer

A limit on the dollar amount of a lien

Answer

A federal tax rule for contractors

Answer

A building code provision

Question 6

Which clause in a contract states that a contractor cannot file a lien while awaiting dispute resolution?

Accepted Answer

No-lien agreement or lien waiver clause

Answer

Force majeure clause

Answer

Indemnification clause

Answer

Liquidated damages clause