CMCA - Certified Manager of Community Associations Contracting and Vendor Management Questions and Answers Flashcards

An indemnification clause in a vendor contract requires the vendor to:

Answer: Defend and hold the association harmless from claims arising out of the vendor's work

An indemnification clause obligates the vendor to defend the association and cover any losses or claims that result from the vendor's negligent or wrongful acts during the performance of the contract.

A performance bond in a construction contract protects the association by:

Answer: Ensuring the project is completed if the contractor defaults

A performance bond is a surety instrument that guarantees project completion. If the contractor defaults, the surety company steps in to either complete the project or compensate the association for completion costs.

A manager reviewing a landscaping contract notices it lacks a termination-for-convenience clause. This means:

Answer: The association may be unable to end the contract early without cause, potentially paying for services it no longer wants

Without a termination-for-convenience clause, the association is generally bound for the full contract term and can only exit early if the vendor materially breaches the agreement.

When a vendor completes work and submits an invoice, the manager should verify:

Answer: That the invoice matches the contract price and the scope of work was completed as specified

Invoice verification requires confirming that the billed amount matches the contract and approved change orders and that all specified work was actually completed before authorizing payment.

Which document records changes to the original scope or price of a construction contract after it has been signed?

Answer: Change order

A change order is a written amendment to the original contract that documents any changes to scope, timeline, or price that both parties agree to after the contract is executed.

A vendor claims that hurricane damage prevented timely project completion. Which contract clause would the vendor most likely invoke?

Answer: Force majeure

A force majeure clause excuses a party's non-performance when extraordinary events beyond their control such as natural disasters prevent them from fulfilling their obligations.