CAC CAC Construction Law and Ethics

Question 1

What is the purpose of a mechanic's lien in US construction law?

Accepted Answer

To secure payment for contractors or suppliers by placing a claim against the property

Answer

To protect the owner from defective work

Answer

To enforce warranty obligations

Answer

To settle labor disputes

Question 2

Which US federal law governs prevailing wage requirements on federally funded construction projects?

Accepted Answer

Davis-Bacon Act

Answer

Sherman Antitrust Act

Answer

Occupational Safety and Health Act

Answer

Miller Act

Question 3

The Miller Act requires prime contractors on federal construction projects over $150,000 to furnish:

Accepted Answer

Both a performance bond and a payment bond

Answer

Only a bid bond

Answer

A certificate of insurance

Answer

A warranty bond

Question 4

What does 'indemnification' mean in a construction contract?

Accepted Answer

One party agrees to hold the other harmless and cover losses or claims arising from the project

Answer

Both parties share all project risks equally

Answer

The owner waives liability for site conditions

Answer

A contractor guarantees zero defects

Question 5

A statute of limitations in construction law refers to:

Accepted Answer

The deadline by which a legal claim must be filed after a defect or breach is discovered

Answer

The time allowed to obtain a building permit

Answer

The warranty period specified in the contract

Answer

The maximum project duration allowed by a permit

Question 6

Which form of dispute resolution in construction involves a neutral third party making a binding decision?

Accepted Answer

Arbitration

Answer

Mediation

Answer

Negotiation

Answer

Dispute review board advisory opinion