CPC Contract Administration & Legal Issues 5

Question 1

An owner issues a unilateral change order without the contractor's agreement on price. Under most standard construction contracts, the contractor must:

Accepted Answer

Perform the work and preserve its right to additional compensation through the claims process

Answer

Standard contracts (e.g., AIA, ConsensusDocs) require contractors to proceed with directed work and pursue compensation through the dispute resolution process to avoid default.

Question 2

The 'economic waste' doctrine in construction defect law holds that a court may award diminution in value rather than cost-of-repair damages when:

Accepted Answer

The cost to repair a defect would be grossly disproportionate to the benefit gained

Answer

Courts apply the economic waste doctrine to award the lesser diminution-in-value measure when repair costs would be disproportionate to any functional or aesthetic benefit.

Question 3

Under OSHA multi-employer worksite doctrine, a controlling employer (general contractor) may be cited for a subcontractor's safety violation if the GC:

Accepted Answer

Failed to exercise reasonable care to detect and correct the violation

Answer

OSHA's multi-employer citation policy holds controlling employers liable when they fail to exercise reasonable care to detect and correct hazards created by other employers on the site.

Question 4

A 'flow-down' clause in a subcontract is designed to:

Accepted Answer

Incorporate prime contract terms and obligations into the subcontract relationship

Answer

Flow-down (or pass-through) clauses incorporate prime contract terms into the subcontract, ensuring subcontractors are bound by the same obligations the GC owes the owner.

Question 5

In construction arbitration, the doctrine of 'functus officio' means that after an arbitrator issues a final award, the arbitrator:

Accepted Answer

Has exhausted their authority and cannot modify or reconsider the award

Answer

Functus officio ('having performed his office') means the arbitrator's authority ends once the final award is issued, preventing unilateral modification.

(CPC) Certified Professional Constructor Practice Test

(CPC) Certified Professional Constructor Practice Test

CPC Contract Administration & Legal Issues 5