Client Relations & Contract Administration Flashcards
7 cards from real CRC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Client Relations & Contract Administration flashcards as text
A contractor who abandons a project without legal justification can be held liable for:
Answer: Breach of contract damages including cost to complete and consequential damages
Unjustified abandonment constitutes a material breach of contract, exposing the contractor to damages including the additional cost the owner pays to have another contractor finish the work.
An implied warranty of habitability in residential construction means the contractor warrants that:
Answer: The completed structure is safe and fit for human occupancy
Most states impose an implied warranty that residential contractors build homes that are structurally sound, code-compliant, and suitable for habitation.
What is the primary purpose of a performance bond in a residential construction contract?
Answer: To ensure the contractor will complete the project as specified if they default
A performance bond is issued by a surety company guaranteeing that the contractor will fulfill all contract obligations, protecting the owner against contractor default.
A residential contractor is ethically obligated to disclose to a client:
Answer: Known defects or conditions that could materially affect the project cost or safety
Ethical and legal obligations require contractors to disclose material facts about conditions that would affect the client's decision or the project's safety and cost.
Which clause in a residential contract limits a contractor's total financial exposure for damages to the amount paid under the contract?
Answer: Limitation of liability clause
A limitation of liability clause caps the contractor's maximum exposure, often at the total contract value, protecting against disproportionate damage claims.
When a contract requires the contractor to obtain an 'assignment of warranties' from subcontractors, this means:
Answer: The contractor transfers subcontractor warranty rights to the owner at project completion
Assigning subcontractor warranties to the owner gives the owner the ability to pursue warranty claims directly against subs if needed after the project is complete.
A homeowner terminates a contract for convenience (not for cause) after 60% completion. The contractor is typically entitled to:
Answer: Payment for work completed plus reasonable profit on the uncompleted portion and demobilization costs
Termination for convenience entitles the contractor to be compensated for work performed, costs incurred, and a reasonable profit on work done and on demobilization.