Contracts, Laws, and Agreements Flashcards
7 cards from real General Contractor License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Contracts, Laws, and Agreements flashcards as text
What is a 'pay-if-paid' clause and how does it differ from a 'pay-when-paid' clause?
Answer: Pay-if-paid makes subcontractor payment contingent on owner payment; pay-when-paid only delays timing
A pay-if-paid clause transfers the risk of owner nonpayment to the subcontractor, while a pay-when-paid clause only temporarily delays the GC's payment obligation.
Under the Davis-Bacon Act, which workers on federal construction contracts must be paid prevailing wages?
Answer: All laborers and mechanics employed on the project
The Davis-Bacon Act requires all laborers and mechanics (including subcontractor employees) on covered federal construction contracts to be paid locally prevailing wages.
A contractor discovers unforeseen subsurface conditions (rock instead of soil) that significantly increase excavation costs. Which contract clause would most likely entitle the contractor to additional compensation?
Answer: Differing site conditions clause
A differing site conditions clause entitles contractors to additional compensation when actual subsurface or latent conditions differ materially from what was represented in the contract documents.
What is the legal effect of a contractor obtaining a surety bond?
Answer: A third party (surety) guarantees the contractor's performance or payment obligations
A surety bond creates a three-party agreement where the surety guarantees that the principal (contractor) will fulfill its obligations to the obligee (owner or public).
An owner wants to use a design-build contract instead of a traditional design-bid-build approach. What is the main legal difference for the contractor?
Answer: The contractor assumes responsibility for both design and construction
In design-build, the single entity (contractor or design-builder) is responsible for both the design and construction, consolidating liability and eliminating the traditional separation between designer and builder.
Under OSHA regulations, when a general contractor is cited for a subcontractor's safety violation on a multi-employer worksite, this is known as what type of citation?
Answer: Controlling employer citation
OSHA's multi-employer worksite doctrine allows a controlling employer (GC) to be cited if it has the authority to correct hazards created by subcontractors on the site.
What is the legal significance of the 'substantial completion' date in a construction contract?
Answer: It starts the statute of limitations period and shifts insurance risk to the owner
Substantial completion typically starts the running of statutes of limitation on warranty claims, triggers the owner's duty to occupy and insure, and often triggers final payment minus punch-list retainage.