CBC Contract Law & Legal Responsibilities Flashcards

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

Answer: Notarization by a public notary

A valid contract requires offer, acceptance, consideration, competent parties, and legal purpose — notarization is not a general requirement for enforceability.

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

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

A mechanic's lien (construction lien in Florida) gives unpaid contractors, subcontractors, and material suppliers a claim against the property to secure payment.

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?

Answer: 45 days

Under Florida's Construction Lien Law, contractors not in privity with the owner must serve a Notice to Owner within 45 days of first furnishing to preserve lien rights.

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

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

Liquidated damages clauses establish a fixed per-day amount the contractor owes for each day the project exceeds the contractual completion date.

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

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

An indemnification clause obligates the contractor to defend, indemnify, and hold harmless the owner against losses caused by the contractor's negligence or breach.

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

Answer: The owner takes beneficial occupancy and the warranty period typically begins

Substantial completion marks the point when the project is sufficiently complete for the owner's intended use, triggering beneficial occupancy and starting the warranty clock.