CBC CBC Contract Law & Legal Responsibilities

Question 1

Which element is NOT required to form a legally enforceable construction contract?

Accepted Answer

Notarization by a public notary

Answer

Offer and acceptance

Answer

Consideration

Answer

Competent parties

Question 2

What is a 'mechanic's lien' in the context of Florida construction law?

Accepted Answer

A security interest on real property filed by unpaid contractors or suppliers

Answer

A lien placed on a contractor's license for safety violations

Answer

A court order stopping construction activities

Answer

A bond required before pulling a building permit

Question 3

In Florida, a contractor must serve a Notice to Owner (NTO) within how many days of first furnishing labor or materials to preserve lien rights?

Accepted Answer

45 days

Answer

15 days

Answer

30 days

Answer

90 days

Question 4

A 'liquidated damages' clause in a construction contract specifies:

Accepted Answer

A pre-agreed daily dollar amount the contractor pays for each day of delay

Answer

The contractor's right to stop work if unpaid

Answer

Penalties for using non-union labor

Answer

The owner's obligation to pay interest on late payments

Question 5

What does 'indemnification' require of a contractor under most construction contracts?

Accepted Answer

To hold the owner harmless from claims arising out of the contractor's work

Answer

To purchase a performance bond before starting work

Answer

To provide health insurance for all subcontractors

Answer

To guarantee materials for 10 years after completion

Question 6

Under the AIA A201 General Conditions, what is the effect of 'substantial completion'?

Accepted Answer

The owner takes beneficial occupancy and the warranty period typically begins

Answer

The contractor receives full final payment immediately

Answer

All retainage is released automatically

Answer

The contractor's liability for defects ends