Contracts and Project Documentation Flashcards

What is the purpose of a 'retainage' provision in a construction contract?

Answer: To withhold a percentage of payment as security until project completion

Retainage is a percentage (typically 5–10%) of each progress payment withheld by the owner to ensure the contractor completes the project and corrects deficiencies.

Which document formally establishes the scope of work, materials, and construction methods for a project?

Answer: The project specifications

Project specifications are detailed written documents that define the quality, materials, workmanship standards, and construction methods required for the project.

If a contractor discovers unexpected subsurface conditions (like rock instead of soil), they should:

Answer: Issue a change order request to address the differing site conditions

Most contracts include a differing site conditions clause that allows contractors to seek additional compensation through a change order when unforeseen subsurface conditions are encountered.

What does 'substantial completion' mean in a construction contract?

Answer: When the project is sufficiently complete for the owner to use it for its intended purpose

Substantial completion occurs when the project is sufficiently complete for the owner to use it for its intended purpose, even if minor items remain.

A contractor's 'warranty' on construction work typically covers:

Answer: Defects in materials or workmanship for a specified period after completion

A contractor's warranty is a guarantee that the work is free from defects in materials and workmanship for a defined period, typically one year after substantial completion.

Which of the following is an example of a contractor's breach of contract?

Answer: Failing to complete the project by the specified date without cause

Failing to complete work by the contract deadline without a valid legal excuse constitutes a breach of contract, exposing the contractor to liability for damages.