DBIA Dispute Resolution and Claims Management 3

Question 1

What does 'reservation of rights' mean when a design-build entity submits a claim?

Accepted Answer

The D-B entity preserves its right to seek additional compensation or time while continuing to perform the work

Answer

The D-B entity reserves the right to hire additional subcontractors

Answer

The owner reserves the right to withhold payment during claim review

Answer

A clause preventing the D-B entity from appealing arbitration decisions

Question 2

What is the function of a neutral evaluator in early dispute resolution on design-build projects?

Accepted Answer

To provide a non-binding expert opinion on a dispute to help parties assess their positions and negotiate a settlement

Answer

To impose binding decisions on both parties without their consent

Answer

To act as the owner's representative during construction

Answer

To replace the project's design professional on disputed design issues

Question 3

What is 'pass-through' litigation in the context of design-build subcontractor claims?

Accepted Answer

A process where the D-B entity asserts a subcontractor's claim against the owner on the subcontractor's behalf

Answer

A procedure where the owner transfers design liability to the D-B entity

Answer

A court procedure requiring all disputes to pass through mediation first

Answer

A bond claim mechanism for unpaid subcontractors

Question 4

Which of the following best describes the 'economic loss rule' as it affects design-build disputes?

Accepted Answer

A legal doctrine limiting tort recovery for purely economic losses, requiring parties to rely on contract remedies

Answer

A rule requiring owners to compensate for all economic losses during construction

Answer

A formula for calculating liquidated damages in design-build contracts

Answer

An insurance requirement for professional liability in design-build

Question 5

What is the significance of a 'mutual waiver of consequential damages' provision in a DBIA standard contract?

Accepted Answer

Both parties agree to waive claims for indirect damages like lost profits and loss of use, limiting recovery to direct damages

Answer

It waives all claims for damages on the project

Answer

Only the owner waives the right to recover consequential damages

Answer

It prevents either party from terminating the contract

Question 6

In design-build dispute resolution, what is the typical hierarchy of escalation in DBIA standard documents?

Accepted Answer

Direct negotiation → Mediation → Arbitration or Litigation

Answer

Arbitration → Mediation → Litigation

Answer

Litigation → Arbitration → Mediation

Answer

Government review → Mediation → Direct negotiation

Question 7

What role does comprehensive project documentation play in design-build claims management?

Accepted Answer

Contemporaneous records, RFIs, change orders, and meeting minutes are critical evidence for establishing the facts of a claim

Answer

Documentation is primarily used for marketing purposes and has little legal value

Answer

Documentation is only required for projects exceeding $50 million in value

Answer

Only the owner is responsible for maintaining project documentation for claims purposes