Contract Law and Dispute Resolution Flashcards

Under the California Right to Repair Act (SB 800), a homeowner with a construction defect must first:

Answer: Notify the contractor and allow an opportunity to repair

SB 800 requires homeowners to provide written notice to the builder and give them a statutory opportunity to inspect and repair before filing a lawsuit for construction defects.

What is 'liquidated damages' in a construction contract?

Answer: A pre-agreed daily penalty for late project completion

Liquidated damages are a pre-agreed, fixed amount per day charged to a contractor for each day a project extends beyond the contractual completion date.

A 'time is of the essence' clause in a construction contract means:

Answer: Completing the work on time is a material contractual obligation

A 'time is of the essence' clause makes the completion date a material term of the contract, so that late completion may constitute a material breach.

California's prompt payment penalty for public works projects requires the public agency to pay the prime contractor within how many days of receiving a valid invoice?

Answer: 30 days

California Public Contract Code §20104.50 requires public agencies to pay undisputed invoices within 30 days of receipt.

An 'indemnification clause' in a construction contract typically requires:

Answer: One party to defend and hold harmless another party from specified claims

An indemnification clause obligates one party (usually the contractor) to defend, indemnify, and hold harmless another party from losses arising from specified events such as the contractor's own negligence.

In California, a contractor's claim for extra compensation on a public works project is typically barred if the contractor fails to provide:

Answer: Timely written notice of the claim as required by the contract

Most public works contracts require contractors to provide timely written notice of claims for extra compensation — failure to do so typically bars recovery of those additional costs.