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Quiz 2 CMP 385
| Question | Answer |
|---|---|
| What are four key things to agree on during contract negotiations? | Price, time, scope, and conditions. |
| What are three types of contract development options? | Attorney prepared, customized, non-negotiable Attorney prepared, customized, negotiable Standard contract forms, negotiated or non-negotiated |
| What are the six essential elements of a binding contract? | Mutual agreement (mutual assent) Offer Acceptance Consideration Competent parties (capacity) Legal purpose |
| What are void and voidable contracts? | Void: Missing one or more elements of enforceability Voidable: One party has the option to void the contract |
| Under contract law, when must a contract be in writing to be valid? | Land transactions Marriage Commercial sales over $500 Contracts over 1 year in length |
| What is the difference between a bilateral and unilateral contract? | Bilateral: Promise for a promise (two parties, reciprocal) Unilateral: Promise for an act (one party, enforceable only on the promisor) |
| What is the difference between tort liability and contractual liability? | Tort liability: Law of wrongful injuries Contractual liability: Based on time and price; breach results in damages |
| What is a quasi-contract? | An open-ended time and material agreement, often implied by law to prevent unjust enrichment. |
| What is a contract? | A promise or set of promises to do or not do something that can be enforced by law. |
| Who should develop a contract? | You should, because no one knows your requirements and capabilities better. Lawyers can assist but should not make decisions for you. |
| What are some legal tactics to watch out for in customized contracts? | Making the contract difficult to read Placing unrelated information together Omitting titles or captions Using subtle but high-power words like "all," "highest," "certify" |
| What are some common sources of standard form contracts in construction? | AIA, ConsensusDocs, NAHB, EJCDC, DBIA |
| What are the benefits of using standardized contracts? | Inexpensive Common language Easily modified Familiarity Ample case law support |
| What is a key caution when using standardized contracts? | They can become very one-sided if heavily modified. Always review track changes and never assume. |
| What should you always do before signing a contract? | Always have your attorney review the documents for form, legal sufficiency, hidden risks, and shady tactics. |
| What is an "Identification of Parties Clause"? | It identifies the legal names and roles of each party entering into the contract. |
| What does a "Consideration Clause" establish? | The exchange of value (e.g., money, services) that makes the contract legally binding. |
| What is the purpose of the "Definitions" section in a contract? | To clearly define key terms used throughout the contract to avoid ambiguity. |
| What is a "Compliance with Law Clause"? | Which state’s laws will be used to interpret and enforce the contract. |
| What is a "Venue and Jurisdiction Clause"? | It specifies the location (court) where legal disputes will be heard. |
| What does a "Non-Assignment Clause" do? | Prohibits one party from transferring their rights or obligations under the contract to another party without consent. |
| What is an "Entire Agreement Provision"? | States that the written contract contains the full agreement between the parties, superseding all prior discussions or documents. |
| What is a "Severability Clause"? | If one part of the contract is found unenforceable, the rest of the contract remains in effect. |
| What does a "Nonwaiver Clause" do? | Prevents a party from waiving their rights under the contract by failing to enforce them in one instance. |
| What does "Joint and Several" liability mean? | Each party can be held individually responsible for the full obligation, not just a proportionate share. |
| What is "Incorporation by Reference"? | Including external documents (e.g., plans, specs) into the contract without rewriting them. |
| What does the "Notices" clause cover? | Specifies how and where formal communications between parties must be sent. |
| What is an "All Changes in Writing Clause"? | Requires that any modifications to the contract must be made in writing and signed by both parties. |
| What does "Indemnification and Hold Harmless" mean? | One party agrees to compensate the other for losses or damages arising from the contract. |
| What is a "Dispute Resolution Provision"? | utlines the process for resolving conflicts, such as mediation, arbitration, or litigation. |
| "Termination or Cancellation Provision"? | Specifies the conditions under which the contract can be ended early by either party. |
| What does "Conflicts in Documents" address? | Establishes which document governs if there are discrepancies between contract sections. |
| Name three special clauses often found in residential agreements. | Draw Schedules and Application for Progress Payment Liquidated Damages and Unavoidable Delays Waiver of Liens |
| What is a "Liquidated Damages" clause in a residential contract? | A predetermined amount to be paid if the builder fails to complete the project on time. |
| What is a "Cumulative Rights and Remedies Clause" in a contract? | It states that the rights and remedies provided in the contract are in addition to—and do not replace—any other rights or remedies available under the law. |
| What is an "Insurance Clause" in a contract? | It specifies the types, amounts, and conditions of insurance coverage required from one or both parties during the contract term, such as liability, workers' compensation, or property insurance. |
| What are "Liquidated Damages" in a contract? | A predetermined, agreed-upon amount of money that must be paid as compensation if one party fails to meet certain obligations |
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