General Contractor License Contracts, Laws, and Agreements 2

Question 1

A subcontractor walks off the job without cause after completing 60% of the work. Under common law, what is the general contractor's most appropriate legal remedy?

Accepted Answer

Sue for breach of contract and recover cost to complete

Answer

When a subcontractor abandons work without justification, the general contractor can sue for breach and recover the additional cost to complete the work.

Question 2

Which clause in a construction contract typically protects the owner by requiring the contractor to remove and replace defective work discovered after project completion?

Accepted Answer

Defects and warranty clause

Answer

A defects and warranty clause obligates the contractor to correct defective work or materials discovered within a specified period after completion.

Question 3

Under the Miller Act, a payment bond on federal construction projects protects which party?

Accepted Answer

Subcontractors and suppliers who are not paid

Answer

The Miller Act requires payment bonds on federal projects over $150,000 to protect subcontractors and material suppliers who cannot file mechanics liens on federal property.

Question 4

What is a 'time is of the essence' clause in a construction contract?

Accepted Answer

A provision making completion deadlines strict contractual obligations

Answer

A 'time is of the essence' clause makes the completion date a material term of the contract, meaning delays can constitute a breach even if the owner suffers no actual damages.

Question 5

A general contractor submits a bid that contains a clerical error making it significantly lower than intended. Before the contract is signed, can the contractor withdraw the bid?

Accepted Answer

Yes, if the error is proven and withdrawal is prompt

Answer

Most states allow bid withdrawal based on a material clerical error if the contractor promptly notifies the owner before contract execution and can prove the mistake.

General Contractor License Practice Test

General Contractor License Practice Test

General Contractor License Contracts, Laws, and Agreements 2