Florida General Contractor Florida General Contractor Contracts and Law 2 — Questions and Answers
Question 1: Under Florida Statute §489.126, how soon must a contractor apply for a required permit after receiving a deposit from a residential homeowner?
- Within 7 days
- Within 14 days
- Within 30 days (Correct answer)
- Within 60 days
Correct answer: Within 30 days
Florida Statute §489.126 requires a contractor who receives a deposit to apply for any required permits within 30 days of receiving the deposit.
Question 2: What constitutes 'abandonment' of a construction project under Florida Statute §489.129?
- Failing to complete the project in the agreed timeframe
- Failing to perform work for 90 consecutive days without a valid reason (Correct answer)
- Leaving the job site for more than 30 days
- Failing to obtain a final inspection within 6 months
Correct answer: Failing to perform work for 90 consecutive days without a valid reason
Under Florida Statute §489.129, abandonment is defined as failing to perform work without valid reason for 90 consecutive days.
Question 3: In Florida, what is the effect of a 'no-damages-for-delay' clause in a construction contract?
- It prevents the owner from claiming liquidated damages
- It bars the contractor from receiving monetary compensation for owner-caused delays (Correct answer)
- It voids any time extension requests
- It requires the contractor to absorb all subcontractor delay costs
Correct answer: It bars the contractor from receiving monetary compensation for owner-caused delays
A no-damages-for-delay clause typically limits the contractor's remedy for owner-caused delays to time extensions only, not monetary compensation.
Question 4: Under Florida's prompt payment laws, how many days after receiving a complete payment application must an owner pay a contractor on a private project?
- 7 days
- 14 days
- 20 days (Correct answer)
- 45 days
Correct answer: 20 days
Florida Statute §715.12 generally requires owners on private construction projects to pay contractors within 20 days of receiving a complete pay application.
Question 5: Which of the following is an essential element required to form a valid construction contract in Florida?
- Notarization by a Florida notary
- Mutual assent (offer and acceptance), consideration, and legal capacity (Correct answer)
- Signature of a licensed architect
- Filing with the county clerk
Correct answer: Mutual assent (offer and acceptance), consideration, and legal capacity
A valid contract in Florida requires mutual assent (offer and acceptance), consideration, legal capacity of the parties, and a lawful purpose.
Question 6: What is the primary function of a 'liquidated damages' clause in a Florida construction contract?
- To penalize contractors for safety violations
- To predetermine the daily cost of delays when actual damages are difficult to calculate (Correct answer)
- To limit the contractor's total liability
- To require bonding on all subcontractors
Correct answer: To predetermine the daily cost of delays when actual damages are difficult to calculate
Liquidated damages clauses establish a pre-agreed daily dollar amount for project delays, avoiding the difficulty of proving actual damages.
Florida General Contractor Florida General Contractor Contracts and Law 2
Under Florida Statute §489.126, how soon must a contractor apply for a required permit after receiving a deposit from a residential homeowner?