Shared Flashcard Set

Details

Contract Admin Midterm
Contract Admin Midterm
140
Other
Undergraduate 4
06/04/2019

Additional Other Flashcards

 


 

Cards

Term

True or False

Civil Litigants have an automatic right of appeal to the supreme court of canada. 

Definition
False
Term
What rule applies when federal and provincial legislation have a direct operational conflict?
Definition
Federal - Doctrine of Paramountcy
Term

Which of the following is a federal power under the Canadian Constitution? 

a. Fisheries

b. Management of hospitals 

c. Governance of the professions

d. Contracts

Definition
A - Fisheries
Term

True or False

 

To be eligible for registration as a professional engineer in Canada, applicants must first sit an exam to evaluate their technical ability. 

Definition
True
Term

Engineers Canada has a professional-level reciprocity agreements with all of the following jurisdictions except

 

a. Mexico

b. United Kingdom

c. France

d. Texas

Definition

UK has an educational agreement not a professional agreement. 

 

Mexico does not have any agreement though. 

Term
Name the four groups or persons that professionals owe ethical duties to
Definition

The: 

- Public

- client

- employer

- profession

- oneself 

 

(raymond didn't say oneself but the text does)

Term

True or False

 

Where the intentions of the parties are not clear from the written contract, a court will not consider additional evidence on the parties' intentions. 

Definition

True

 

courts should not re-write the contract for the parties but rather interpret the contract that the parties made. 

Term
When will courts prefer the customary or special meaning of a word over its ordinary meaning?
Definition

If the context requires it. 

When modification is necessary in order to avoid absurdity. 

Technical contracts may require to clarify specifics  

Term
What is the name of the rule that generally excludes extrinsic evidence when interrupting a contract?
Definition

The parol evidence Rule

 

If a contract is clear and unambiguous, extrinsic evidence of the parties will not be considered. 

Term

True or False

 

A statement by an architect to a contractor may be sufficient to establish that the architect is the owner's agent. 

Definition

False

 

It should come from the principal (owner)

Term

True or False

 

A subcontractor would be covered by a one-tier labour and material payment bond 

 

Definition

True

 

A 1-tier bond protects subcontractors. 

Subcontractors hired by subcontractors (sub-sub-contractors) require a 2-tier bond. 

Term
Under a pay-when-paid clause, if the owner never pays the main contractor, when must the main contractor pay the subcontractors?
Definition

A reasonable time after the payment was due. 

 

Paid-when-paid merely determines the timing of payment. The main contractor still has to pay the subcontractor even if the owner never pays the main contractor. 

Term

Under the definition of the profession of geoscience adopted by the CCPG, which of the following does not fall within the bounds of professional practice? 

a) the sampling of tailings pond

b) the evaluation of assay samples

c) the construction of a Road into a mine

d) none of the above

Definition
C - the construction of a road into a mine
Term

Which statement describes the design of a portion of a building? 

a) it falls within the practice of architecture, but not engineering

b) it falls within the practice of engineering, but not architecture

c) it may be both architecture and engineering

d) none of the above

Definition
C - it may be both architecture and engineering
Term

What kind of definition is the CCPE definition of professional engineering?

a) a generic definition 

b) a specific definition

c) both a generic and a specific definition

d) neither generic nor specific 

Definition
A - a generic definition
Term

a graduate engineer has the following right: 

a) the right to use the title professional engineer

b) the right to use the title engineer-in-training

c) no right to any title, based simply on an engineering degree

 

Definition
c- no right to any title, based simply on an engineering degree
Term

True or False

 

The provincial government governs laws affecting architecture, engineering, geoscience

Definition
True
Term

True or false

 

Judges only interpret statutes

Definition
True - judges are only supposed to interpret the statutes. laws tend to be altered by judges based on principles of the law and quality tracing roots of law back to england.
Term

A geoscientist is asked to provide assay results for a mining exploration company, which will be used in public disclosure. The company offers to pay the geoscientists in shares of the company, rather than cash. What is the acceptable course of action for the geoscientist? 

a) he/she cannot accept payment in shares

b) he/she can only accept payment in shares if he/she agrees to provide an unbiased report

c) he/she can accept the shares under any circumstances

Definition
A - he/she cannot accept payment in shares
Term

An architect is hired as the consultant under a CCDC2 contract. the contractor claims that it was delayed by late approval of shop drawings. The architect should do the following: 

a) reject the claim, because it might result in the architect being sued by the owner

b) evaluate the claims on its merits

c) approve the claim, so that it does not appear that the architect is biased

Definition
B - evaluate the claims on its merits
Term

Which of the following statements is true?

a) duty to the employer governs over the duty to the client in all cases

b) duty to public safety governs over the duty to the client in all cases

c) duty to one's self governs over the public interest in most cases. 

Definition
B - duty to public safety governs over the duty to the client in all cases
Term

Which statement is true for a person who is not an architect, engineer, or geoscientist? 

a) He/she owes no ethical duty to anyone

b) he/she is not bound by the codes of ethics for those professions

c) he/she always owes a duty to comply with the codes of ethics of those professions

Definition
B - he/she is not bound by the codes for those professions
Term

During the course of employment, a geoscientist working for a mining company learns about a property rick in minerals. That geoscientist wants to quit her job and buy up some of the surrounding properties. In this situation, which of the following statements is false?

 

a) the geoscientist owes a duty to her employer even after leaving her job

b) the geoscientist can buy up properties, as long as the former employer agrees. 

c) the geoscientist owes no duty to the employer after quitting

Definition
C - the geoscientist owes no duty to the employer after quitting
Term

Who owns an unpublished design drawing?

a) the originator (ie design engineer)

b) the party who makes the copy of the drawing

c) the client who hired the engineer to do the design 

d) none of the above 

Definition
A - the originator (ie, design engineer)
Term

Which of the following is not an example of intangible property? 

a) copyright 

b) profit a pendre

c) license 

d) patent

e) none of the above

Definition
E - none of the above
Term

If a landowner wants to excavate the property and such excavation requires rock anchors to be installed into the neighbour's property, it is necessary to obtain permission for this reason: 

a)failure to do so would be a trespass

b)without permission, there would be insufficient lateral support

c) it would violate the neighbour's air rights

Definition
A - failure to do so would be trespass
Term

The owner in fee simple of a property has this or these rights: 

a) to sell it

b) to mortgage it

c) to mine it for gravel 

d) all of the above

e) only a and b

Definition
D - all of the above
Term

What is the purpose of a patent? 

a) to protect the idea that an inventor came up with 

b) to protect the expression of an idea

c) to prevent a person from copying a drawing

d) none of the above

Definition
B - to protect the expression of an idea
Term

Which of the following is not a form of corporate organization?

a) partnership

b) corporation

c) sole proprietorship

d)construction association

Definition
D - construction association
Term

Which statement is true about limited partnerships?

a) it is essentially the same as a corporation

b) it must have at least one limited partner but does not require a general partner

c) it must have at least one general partner but does not require a limited partner 

d) none of the above 

Definition
d - none of the above
Term

A corporation may not use one of the following as part of its name to designate that it is incorporated. 

a) corporation or corp. 

b) company or co.

c) limited or ltd. 

d) incorporated or inc.

Definition
b - company or co.
Term

Directors may be personally liable for which of the following?

a) unpaid wages of the corporation 

b) breach of trust committed by the corporation under a construction lien statute 

c) unpaid rent for the corporation's office

d) unpaid taxes of the corporation

e) all of the above

f) all of the above, except c

Definition
f) all of the above, except c
Term

Conflict of interest rules can apply to which of the following?

a) officers and directors

b) partners

c) sole proprietor

d) A and B only

e) all of the above 

Definition

d) A and B only

 

Term

A contract is said to be 'legally enforceable promise.' however, a court will refuse to enforce a contract if the following is true:

a) it is an obviously bad business deal for one of the parties

b) the purpose of the contract is illegal

c) neither a nor b

d) both a and b

Definition
B - the purpose of the contract is illegal
Term

'consideration' is best defined as the following: 

a) one party doing a favour for the other party. 

b) money being paid by one party to another party

c) something of value that is exchanged or given by a party

d) the thought process that a party goes through in deciding to enter the contract

Definition

c) something of value that is exchanged or given by a party

 

Term

in which of the following ways may contracts may be formed?

a) entirely oral 

b) partly oral and partly written 

c) entirely written 

d) all of the above 

Definition
d - all of the above
Term

If two parties reach an agreement orally, but make a mistake in documenting their agreement in writing what happens then?

a) no contract exists because mistakes were made

b) a contract exists as set out in the written document 

c) a contract exists according to the oral agreement because the parties did not intend to change the contract when they put it in writing

Definition
c - a contract exists according to the oral agreement because the parties did not intend to change the contract when they put it in writing
Term

if a party to a contract breaches the contract, the innocent party may obtain damages. What is the purpose to awarding damages? 

a) to punish the breaching party

b) to deter further breaches by the breaching party or other parties 

c) to place the innocent party in the same position he would have been in had the guilty party performed the contract

d) to place the innocent party in the same position he would have been in had the contract never been enter into

Definition
c) to place the innocent party in the same position he would have been in had the guilty party performed the contract
Term

Which of the following event(s) entitles a party to be released from its obligations under an existing contract? 

a) fundamental break of contract

b) destruction of the contract documents

c)the parties cannot agree on an amendment 

d) party forgetting to sign the contract documents, prepared after work has started

Definition

a) fundamental break of contract

 

Term

True or False

 

When a contract is voidable, the non-breaching party has the option to continue with the contract?

Definition
True
Term
Why is it advisable to record contracts in writing?
Definition

Not everything needs to be in writing, it becomes proof of insurance later. 

Verbal is only viable in Ontario. 

Term

Which of the following would be acceptable consideration in exchange for a contractor building a house?

a - $1

b - $60,000

c - the free market value of the house

d - all above the above

Definition
D - all of the above
Term

True or False 

 

Because of the doctrine of remoteness, damages will only be awarded for breach of contract if the loss was caused by the breach

Definition
False - Does not cover indirect losses, or unforeseeable losses.
Term

The owner insists that the contractor perform certain work that the contractor claims is not part of the contract. Which of the following is an appropriate course of action for the contractor?

 

a- perform the disputed work hoping the owner will later agree to pay

b - stop work on the entire project unless the owner agrees to pay for the disputed work 

c - perform all contractual obligations apart from the disputed work

d - none of the above 

Definition

C - perform all contractual obligations apart from the disputed work 

 

These additional attributes should be negotiated if they are going to be added in

Term

A swimming pool contractor builds a pool with a deep end 11ft deep, instead of the 12ft specified in the contract. Would specific performance be ordered? If not, how would damages be calculated?

 

 

Definition

Could be ordered if the owner cannot be satisfied with an 11ft pool as they wanted. Damages would be the cost of redigging the pool to the specified 12ft. 

Specific performance is court ordered. 

Term

True / False

 

Owners can increase price certainty in fixed-cost contracts by requiring the contractor to bear more risk. 

Definition

True 

 

They can, most owners believe that the fixed price is the actual price for an on-time, well -quality project. The face of a financial crisis by the end of the project. 

Term

The public-private partnership model is most similar to which other model 

a. cost-plus

b. alliance

c. design-bid-build

d. construction management

Definition

B. Alliance 

public private share the same but not all of the features of alliancing, while also showing other issues like financing + maintenance

Term

Which of the following is false regarding the issue of time under contract?

a. Typically, time is of the essence for both parties 

b. since the contractor will be liable for late completion, only he need be concerned with the feasibility of the construction schedule

c. when scheduling, minor tasks should be given as much consideration as major tasks 

d. all of the above

Definition
b - since the contractor will be liable for late completion, only he need be concerned with the feasibility of the construction schedule
Term

Which is the typical sequence in which dispute resolution options are tried?

a - negotiation, mediation, arbitration

b - mediation, negotiation, arbitration

c - negotiation, arbitration, mediation

d - arbitration, negotiation, mediation 

 

 

Definition
a - negotiation, mediation, arbitration
Term

True/False

 

A request for quotation may be used as a preliminary step when negotiation is anticipated. 

Definition

True

 

used when buyer wants to find the lowest price

Term

True/False

 

Standing offers are typically open for a short period of time 

Definition

False

 

open for whatever the agreed upon time was

Term

In which of the following project delivery modes is the contractor most involved through the entire life of the project?

a - design-bid-build

b - design - build

c - design-build-operate-finance

d- construction management

Definition

c - design-build-operate-finance

 

Term

An owner urgently wants to select a contractor. However, the project details have not been finalized. Therefore, the owner wants to have a few contractors give rough price estimates, and not then enter into negotiations with one or more of them. What type of delivery system is most appropriate for this situation?

a - request for qualifications

b - an invitation to tender

c - request for quotation 

d - request for standing offer 

Definition
c - request for quotation
Term

A large private developer anticipates a complicated multi-stage residential development to be implemented over a 6-year period. It is important that a good working relationship exists between the owner and the contractor because the owner wishes to have a single contractor for all stages. 

 

a - request for qualifications

b - invitation to tender

c - request for quotation 

d - request for standing offer

Definition

a - request for qualifications

 

is needed for selecting a professional solely on qualifications

Term

Which of the following is good practice for an owner awarding a contract?

 

a - seeking clarity from a bidder regarding ambiguity in a bid before awarding the contract

b - awarding the contract based on criteria not stated in the invitation for tenders

c - accepting a bid that does not comply with all the mandatory criteria stated in the invitation for tenders

d - refusing to negotiate with any bidders 

Definition
d - refusing to negotiate with any bidders 
Term

Which of the following models for project delivery would be inappropriate for a single residence project?

a - design-bid-build

b - design-build

c - design-build-operate

d - construction management

Definition

c - design-build-operate

Contractors typically don't operate a house once it is completed.

Term

True/False

 

A contractor who builds a house and then sells it to the first owner will generally not be contractually liable to the second owner of the property for defective construction. 

Definition
True
Term

Between which of the following parties is there clearly a duty of care for negligence?

a. an architect and a contractor

 

b. a geoscientist and an investor who inadvertently obtains a copy of the geoscientist's report

 

c. a car manufacturer and the owner of the car

 

d. none of the above 

Definition
c. a car manufacturer and the owner of the car
Term

To establish causation, the plaintiff must show that:

 

a. the defendant owed a duty to the plaintiff and breached that duty

 

b. but for the breach of duty by the defendant, the loss would not have occurred, and that the defendant's breach was the proximate cause of the loss

 

c. the plaintiff took all reasonable steps to prevent the loss after the defendant breached his duty to the plaintiff, and that the defendant's breach was the proximate cause of the loss

 

d. none of the above

Definition
b. but for the breach of duty by the defendant, the loss would not have occurred, and that the defendant's breach was the proximate cause of the loss
Term

Which of the following is a strict liability tort?

 

a. breach of confidence

 

b. nuisance

 

c. negligence

 

d. negligent misrepresentation 

Definition
a. breach of confidence
Term

True/False

 

An employment contract could contain an exclusion clause that prevents the employee from recovering from the employee damages the employer has to pay under the doctrine of vicarious liability. 

Definition

Raymond - True

 

Keith - I think this was False in class. this guy sucks.  

Term

A patent defect is one in which:

 

a. would only be obvious to an expert

 

b. could not be discovered until after the structure containing the defect had failed, at which point it would be obvious that there was a defect

 

c. is an obvious defect that can be discovered upon a reasonable inspection

 

d. none of the above

Definition
c. is an obvious defect that can be discovered upon a reasonable inspection
Term

in which of the following relationships is there vicarious liability?

 

a. employee-employer

 

b. owner-contractor

 

c. owner-architect 

 

d. all of the above

Definition
a. employee-employer
Term

True/False

 

Upon being issued a demand for documents, a party must produce all relevant documents. 

Definition

True

 

***not taken up

Term

What is the name given to the process whereby the parties agree to arbitrate after the dispute has arisen, and agree that the arbitrator will make a final decision?

 

a. mandatory binding arbitration

 

b. voluntary binding arbitration

 

c. mandatory non-binding arbitration

 

d. voluntary non-binding arbitration

Definition
b. voluntary binding arbitration
Term

Which of the following is not true regarding experts? 

 

a. experts must remain neutral at all times

 

b. experts cannot agree to payment contingent on the outcome of the litigation

 

c. experts should insist that there is only one answer to every technical problem

 

d. experts should decline to testify if they cannot honestly offer an opinion that supports the case of the party that hired them

Definition

c. experts should insist that there is only one answer to every technical problem

 

***not taken up

Term

Which of the following must inspectors do? 

a - ensure absolutely that all work complies with the contract documents

b - refrain from interpreting the contract

c - ensure that they act within their authority

Definition
C - ensure that they act within their authority
Term

Under which circumstances is a subcontractor bound by the terms of the prime contract? 

a - only if he or she has read that prime contract before bidding

b - whether or not he or she has read it before bidding if the subcontract clearly states that the subcontractor is bound by the prime contract

c - only if the prime contract is reasonable

Definition
B - whether or not he or she has read it before bidding if the subcontract clearly states that the subcontractor is bound by the prime contract
Term

To what extent are pay-if-paid clauses enforceable? 

a - under all circumstances

b - under no circumstances

c - in some cases

Definition
C in some cases
Term

Which of the following actions can a buyer in a tendering situation do without risking legal liability?

a - it can accept bids that do not comply with a material requirement of the call for tenders

b - it can negotiate with the bidders after tenders close

c - it can use criteria other than price in deciding on the successful bidder, as long as the criteria are disclosed. 

d - it can use undisclosed criteria in deciding on the successful bidder 

Definition
C - it can use criteria other than price in deciding on the successful bidder, as long as all criteria is disclosed.
Term

When preparing contract documents for tender purposes, what should an engineer include? 

a - only that information which the engineer personally believes should be necessary for a competent contractor

b - all relevant information which may assist a contractor in preparing a bid

c - only that information which the buyer, his client, agrees that the engineer should include and disclose

Definition
b - all relevant information which may assist a contractor in preparing a bid
Term

If tender documents state that submitted bids are irrevocable until a specific date, what does this mean? 

a - a bidder can never withdraw his bid

b - a bidder can withdraw his bid before tenders close, but not after

c - a bidder can withdraw his bid at any time before the specified date

Definition
b - a bidder can withdraw his bid before tenders close, but not after
Term

In an engineer who is supervising a contract, tender receives inquiries from prospective bidders before the close of bids, which of the following actions should he take? 

a - refuse to answer any questions because the bidders must base their bid only on the written tender documents 

b - answer questions as fully and fairly as possible, keeping a written record of his advice in case a future controversy develops

c - answer the question fully and fairly and pass on to all other bidders the same information by issuing an addendum

Definition
c - answer the question fully and fairly and pass on to all other bidders the same information by issuing an addendum
Term

During the tender period, if the engineer discovers deficiencies or errors in the tender documents, which of the following actions should he take?

 

A - immediately notify the buyer and all tenderers of the potential difficulty, providing amending information by the way of addenda, where possible

b - say nothing and deal with any problems which may arise by way of change orders after the contract is awarded

c - cancel the entire bid and re-tender the project after correcting the errors and deficiencies

Definition
A - immediately notify the buyer and all tenderers of the potential difficulty, providing amending information by the way of addenda, where possible
Term

Which statement best describes a standard form contract?

a - it is perfect for every situation

b - it represents the best practices for an industry

c - it is a useful starting point

d - it is completely balanced

Definition

c - it is a useful starting point

 

Term

Which statement best describes an employer regarding vicarious liability. 

a - the employer is never liable for the actions of its employees

b - the employer is liable to others for the actions of its employees which the employee is acting in the course and scope of his or her employment

c - the employer is not bound by labor legislation

d - the employer is unable to sue its employees or former employees

Definition
b - the employer is liable to others for the actions of its employees which the employee is acting in the course and scope of his or her employment
Term

in most provinces, when does the limitation period in a negligence case against an engineer about an engineer's negligence begin to run?

a - when the engineer's work is substantially complete

b - when the contractor's work begins to run

c - when the aggrieved party discovers or ought to have discovered the negligence

d - at the end of the month following the engineers birthday

Definition
c - when the aggrieved party discovers or ought to have discovered the negligence
Term

Which of the following is not at all a voluntary process?

a - litigation

b - arbitration

c - mediation 

d - negotiation

Definition

a - litigation

 

Term
Are photographers and videos considered to be documents for the purpose of document production in a lawsuit?
Definition
yes
Term

Which of the following is not a pleading?

a - a reply

b - a statement of defense

c - the discovery of documents

d - interrogatories

Definition

c - the discovery of documents

 

Term

Which of the following are not allowed to speak privately with one of the parties in a dispute

a - the judge

b - the arbitrator

c - the mediator 

d - a and b

Definition
D - a and b
Term
Does the successful party in a lawsuit recover all its legal fees?
Definition
no
Term

What documents do judges examine prior to the commencement of a lawsuit?

a - the statement of claim

b - correspondence between the parties

c - photographs

d - settlement offers

Definition
A - the settlement of claim
Term
If disputing parties attempt mediation and exchange settlement offers but are unable to reach a final settlement, are the amounts of the offers admissible in subsequent litigation?
Definition
no
Term

What is usually the most expensive dispute resolution method?

a - settlement conferences

b - mediation

c - litigation 

d - arbitration

Definition
c - litigation
Term

To what level of standard of care do courts hold professionals? 

a - perfection

b - a reasonably competent professional practicing in the same field 

c - the professional with the lowest competence practicing in the same field 

Definition
B- a reasonably competent professional practicing in the same field
Term

True/False

 

Upon being issued a demand for documents, a party must produce all relevant documents

Definition
False
Term

What name is given to the process whereby parties agree to arbitrate after the dispute has arisen, and agree that the arbitrator will make a final decision?

 

A. mandatory binding arbitration

B. voluntary binding arbitration

C. mandatory non-binding arbitration

D. voluntary non-binding arbitration

Definition
B. voluntary binding arbitration
Term

Which of the following is not true regarding experts?

 

A. experts must remain neutral at all times

B. experts cannot agree to payment contingent on the outcome of the litigation 

C. experts should insist that there is only one solution to every technical problem

D. experts should decline to testify if they cannot honestly offer an opinion that supports the case of the party who hired them

Definition
C. experts should insist that there is only one solution to every technical problem
Term

True/False

 

Operating through a corporation will not protect a professional against claims for personal negligence 

Definition
True
Term

True/False

 

All insurance policies impose on the insurer the duty to defend and the duty to indemnify when the claim is within coverage. 

Definition
False
Term

On a shopping mall construction project, which of the following best describes the extent of the subcontractor's insurable interest?

 

A. the subcontractor's tools and other equipment

B. the work performed by the subcontractor

C. the work performed by the subcontractor and the contractor who employed the subcontractor

D. the physical property of the entire site (ie. the work done by all of the contractors and subcontractors)

Definition

D. the physical property of the entire site (ie. the work done by all of the contractors and subcontractors)

 

 

Term

Which of the following is true regarding insurance contracts? 

 

A. the scope of coverage clause defines what claims are covered by the policy

B. exclusion clauses reduce the scope of coverage

C. exception clauses reduce the scope of exclusion clauses

D. all of the above

Definition
D. all of the above
Term

True/False

 

Like labour and material bond, lien bonds are put in place at the start of the contract

Definition
False
Term

Which of the following is a course of action a surety under a performance bond could take upon being notified by the owner of a default by the contractor? 

 

A. complete the construction contract himself

B. pay the owner the face value of the performance bond

C. do nothing, and wait to see if the owner sues the contractor to prove that the contractor was actually in default

D. all of the above

Definition
D. all of the above
Term

Which of the following may be a defence available to a surety who does not want to pay out under a performance bond?

 

A. the surety did not review the obligations on the contractor under the construction contract

B. the owner did not perform all obligations under the construction contract 

C. the contractor made a misrepresentation to the surety before the surety agreed to provide the performance bond

D. all of the above

Definition
B. the owner did not perform all obligations under the construction contract 
Term

True/False

 

 If the contractor is financially strong, and files a letter of credit with the owner stating that she will have no difficulty in paying subcontractors, she need not comply with the lien legislation trust provisions


Definition
False
Term

How does one perfect a lien?

a)      A file a notice of lien in the land registry office

b)      File a certificate of pending litigation in the land registry office

c)      Commence a legal action and prove the lien

d)      Provide the owner with notice of the lien within the time set by the applicable lien legislation

Definition
c)      Commence a legal action and prove the lien
Term

Contractor A employed two subcontractors, B and C. The total holdback retained by A is $100. B and C file liens for $60 and $240 respectively. Assuming there are o other liens on the project, the holdback amount is correct and the liens are proven, how much will C recover from the holdback?

a)      $80

b)      $100

c)      $240

d)      None of the above

Definition
A. $80
Term

True/False

 

The measured mile approach is suitable for analyzing jobs involving many sort tasks all quite different in nature

Definition
False
Term

What is the common feature of all activities on the critical path

a)      They are all dependent on each other

b)      They cannot be performed at the same time

c)      They have no float

d)      All of the above

Definition
c)      They have no float
Term

Which head of damage is generally most difficult to prove?

a)      Labour costs

b)      Head office overhead

c)      Loss of interest on holdback

d)      Travel expenses

Definition
b)      Head office overhead
Term

Which of the following is not a potential defence available to an insurer to a claim under professional liability insurance policy?

a) The professional failed to disclose an unrelated claim in the initial application for insurance.

b) The professional failed to give timely notice of the claim.

c) The professional agreed that he or she was liable for the claim.

d) The professional agreed to a contract for services without obtaining specific approval of the insurer.


Definition
d) The professional agreed to a contract for services without obtaining specific approval of the insurer.
Term

 What is a waiver of subrogation?

a) It permits the insurer to seek compensation from others as if the insurer were the insured.

b) It eliminates an insurer’s obligation to provide indemnities to the insured.

c) It eliminates the insurer’s right to seek compensation from others as if the insurer were the insured.

d) It permits those operating submarines to rogate


Definition
c) It eliminates the insurer’s right to seek compensation from others as if the insurer were the insured.
Term

what types of claims does a claims-made policy cover?

a) Those made during the currency of the policy

b) Those arising from facts that occurred during the currency of the policy

c) Those for damage to property on the insured’s office premises


Definition
a) Those made during the currency of the policy
Term

Which statement(s) is/are true of builders’ risk insurance policies?

a) They always cover all claims of any nature arising from construction.

b) They often exclude coverage for repairing the contractor’s own work product.

c) They continue to cover a building for the life of the building.


Definition

b) They often exclude coverage for repairing the contractor’s own work product.


Term

What is the difference between a bond and an insurance policy?

a) Only a bond includes a right of subrogation.

b) A person purchasing a bond must pay a premium.

c) A surety, but not an insurer, obtains indemnities.

d) All of the above


Definition

c) A surety, but not an insurer, obtains indemnities.


Term

When a claim is made under a performance bond, which of the following is an option for a surety?

a) Wait and see

b) Pay the face value of the bond

c) Defend the claim

d) Only (a) and (b)

e) All of the above


Definition
e) All of the above
Term

Can a sub-subcontractor qualify as a claimant under a standard form CCDC labour and material payment bond?


Definition
No, this form is a one-tier bond.
Term

Which of the following cannot qualify as a defence under a performance bond?

a) The owner has failed to pay the contractor.

b) The owner has overpaid the contractor.

c) The owner has added a large number of changes to the work.

d) None of the above

 


Definition

d) None of the above


Term

Which of the following parties cannot be an obligee under a payment bond?

a) An owner

b) A general contractor

c) A subcontractor

d) None of the above


Definition
d) None of the above
Term

 If a claim is asserted against a surety under a performance bond, which of the following statements is true?

a) The surety cannot rely on the defences available to the principal if those defences appear weak.

b) The limitation periods available to the contractor may not be available to the surety.

c) The limitation periods available to the surety may not be available to the principal.

d) None of the above


Definition
c) The limitation periods available to the surety may not be available to the principal
Term

Which of the following may a lien claimant recover?

a) More than the holdback amount     

b) Less than the full amount of the holdback      

c) Only the exact amount of the holdback


Definition
b) Less than the full amount of the holdback
Term

Which statement is true about the amount of money available to a claimant under a breach of trust claim?

a) It is always less than under a lien claim.  

b) It is never less than under a lien claim.   

c) It is sometimes less than under a lien claim.

 


Definition
c) It is sometimes less than under a lien claim.
Term

What is the purpose of a lien bond?

a) To guarantee the performance of the contractor

b) To ensure that no liens are filed

c) To replace the land as security for a claim of lien


Definition
c) To replace the land as security for a claim of lien
Term

Which parties may be potentially liable for a breach of trust under a Construction Lien Act?

a) A contractor

b) A worker

c) A material supplier

d) A subcontractor

e) A and D only


Definition
e) A and D only
Term

What is the difference between a multiple holdback system and a single holdback system?

a) The amount of holdback available to a claimant

b) The number of parties who are required to retain the holdback

c) The percentage of money that must be held back

d) A and B only


Definition
d) A and B only
Term

What is the measured mile approach used for?

a) To measure head office overhead

b) To calculate filed office overhead

c) To calculate loss of productivity


Definition
c) To calculate loss of productivity
Term

Which statement is true of constructive acceleration?

a) It only applies to construction projects.

b) It occurs when the owner acknowledges a delay and directs the contractor to make up lost time.

c) It occurs when the owner does not acknowledge any delay but directs the contractor to meet the original completion date.


Definition
c) It occurs when the owner does not acknowledge any delay but directs the contractor to meet the original completion date.
Term

Which statement is true of a delay to a non-critical path activity?

a) It never results in additional compensation.

b) It never results in a schedule extension.

c) It typically results in a schedule extension.

d) It sometimes results in additional compensation.


Definition
d) It sometimes results in additional compensation.
Term

Which of the following statements is true in a standard CCDC 2 contract?

a) A compensable delay is not excusable.

b) A contractor-caused delay is compensable.

c) An excusable delay is always compensable.

d) A contractor-caused delay is not excusable.


Definition
d) A contractor-caused delay is not excusable
Term

Under a CCDC 2 contract, what are force majeure delays?

a) Contractor-caused delays

b) Compensable delays

c) Excusable delays


Definition
c) Excusable delays
Term

 


A contractor procures a policy of property insurance covering the equipment of his competitor.
Later, a loss occurs. Can the insurer deny coverage? If so, on what grounds?

Definition

Yes. The insurer can deny coverage on the grounds that the contractor had no insurable
interest.
Term

A claim is made against a geoscientist in negligence. The geoscientist has an errors and omissions policy in place, but part of the geoscientist’s work involving mathematical
modelling was subcontracted to an independent consultant. The negligence was in fact caused by an error of the subconsultant. The geoscientist decides to discuss the matter with the subconsultant, who has few assets and no insurance, and the geoscientist agrees to
release the subconsultant from liability in exchange for $10 000. The geoscientist then reports the claim to the insurer. Can the insurer deny coverage? Explain.

Definition
Yes. The insurer can take the position that it has been prejudiced by the geoscientist’s release
of its subconsultant.
Term
“It is inappropriate for professionals to make themselves judgment proof.” Discuss this
statement.
Definition
Professionals can legally arrange their affairs, including distribution of their assets, in any
way they want before they receive notice of a potential claim. But after receipt of notice of a
potential claim, the professional is prohibited from transferring his or her assets to place
them out of the reach of creditors
Term
An individual purchases property insurance covering the perils of fire and theft. A theft
occurs, and the insurer denies coverage, arguing that the insured failed to disclose the fact
that he was a foreigner (i.e., a landed immigrant), not a citizen, and that the insurer would
not have accepted the risk of insuring an alien. Was this non-disclosure material? Why or
why not?
Definition
The denial was wrong because the immigration status of the individual was not material to
the insured risks.
Term
A surety has provided a performance bond to the owner guaranteeing performance of the
contractor. The contractor in default has been paid $400 000 on a $1 million contract but has
completed 50 percent of the work. The surety solicits bids, and the lowest acceptable bid is
$550 000 to complete the project. How much money will the indemnitors have to reimburse
the surety?
Definition
To get the surety to complete the work, the owner has to pay to the surety the remaining
$600 000 owing on the contract. Of that amount, $550 000 goes to the completion contractor.
The indemnitors do not have to reimburse the surety at all.
Term
A surety has provided a labour and material payment bond. A subcontractor makes a claim
against that bond in the amount of $10 000. The general contractor advises the surety that
the subcontractor is owed only $5000. What should the surety do? Explain
Definition
The surety should conduct its own investigation to determine who is correct. If the surety
simply takes its subcontractor’s word as truth, it may overpay the claimant, in which case it
would not have any recourse against the indemnitors for the overpayment.
Term

An owner receives irrevocable bids, each accompanied by a bid bond in an amount equal to 10 percent of the respective bid. The lowest bid of $90 000 is accepted. But the contractor refuses to enter into a contract for no excusable reason. The next lowest bid is $95 000. However, that bidder also refuses to enter into a contract. The third bid of $100 000 is accepted, and a contract is signed. What is the liability of the surety for the lowest bidder? Why? What
is the liability of the surety for the second-lowest bidder?

Definition

The liability of the surety for the lowest bidder is at most the face value of the bond, which is $9000 (10 percent of the bid price). That amount is lower than the difference between the bid of the principal and the bid accepted by the owner. The same analysis applies to the second-lowest bidder. However, in the second case, the difference in bids is $5000, which is lower than the face value of the bond ($9500). Therefore, the second surety does not face exposure greater than $5000. Note that the courts would not allow the owner double recovery.

Term
Can a sub-subcontractor qualify as a claimant under a standard form CCDC labour and
material payment bond?
Definition
No, this form is a one-tier bond.
Term
Why would a surety want to avoid being characterized as a volunteer?
Definition
If a surety pays money as a volunteer, without a legal obligation to pay, it would be unable to
recover this amount from its indemnitors.
Term
If a surety against whom a claim has been made on a performance bond decides to wait and
see if the principal is liable, is the surety liable for delay damages resulting from its decision
to wait and see?
Definition
While some courts in Canada have held sureties liable for delay damages, the weight of
authority seems to be that delay damages are not covered by a performance bond.
Term

A general contractor contracts with a subcontractor for final cleanup. But the cleaning subcontractor
does not begin work on site until substantial completion of the project. Meanwhile,
the statute requires liens to be filed within 30 days of completion of the prime contract. “Completion” in this jurisdiction is defined as substantial rather than total
completion. What effect, if any, might this definition have on the cleaning subcontractor’s lien rights?

Definition
The cleaning subcontractor may not have any lien rights. As unfair as it may seem, the subcontractor
is not entitled to a lien unless it is filed within 30 days of substantial completion of
the prime contract. If the subcontractor files late, the lien would be invalid.
Term
If a general contractor pays a subcontractor in full, and that subcontractor fails to pay one of
its suppliers, is the general contractor potentially liable to that supplier for breach of trust?
Definition
In those provinces that follow the Mackenzie Redi-Mix case,26 the general contractor would
not be liable.
Term
What is the difference between security posted for a lien and security for costs?
Definition
Security posted for a lien will be cash, a letter of credit, or a bond in an amount that is either
equal to the amount of the lien or, in some jurisdictions, an amount that the court believes
is sufficient to protect the lien claimant. Security for costs, on the other hand, is an amount
that is meant to cover some of the legal costs that may be incurred in commencing and
pursuing legal proceedings to prove the claim of lien and is typically a small fraction of the
lien security.
Term
What is one reason why it is important to include a right of set-off (the right to deduct) in a
contract between the owner and its prime contractor?
Definition
Without the right of set-off, if the prime contractor defaults in its payment obligations to its
subcontractors as well as its obligations to the CRA, the owner might have to pay the holdback
amount twice: once to the CRA and once to the unpaid claimants.
Term

The network diagram for construction of an office tower shows two critical paths: one involving completion of the mechanical room and the other the completion of the elevators. During the project, the elevator subcontractor causes a delay of two weeks. Meanwhile, the
mechanical subcontractor causes a concurrent delay of one week. The owner sues the general contractor for the two-week delay, and the general contractor sues the two subcontractors as third parties. The mechanical subcontractor’s defence is that its delay did not cause any loss because the delay to the elevators took the mechanical room off the critical path. Should that
argument succeed? Explain.

Definition
The argument would likely not succeed. Both parties contributed to the delay. The delays
were concurrent. Both subcontractors could offer the same argument, and if one were to succeed
then both would succeed and neither party would be liable, which is obviously an incorrect
result.
Term
An owner and contractor enter into a contract that states “The contractor is entitled to an
extension but no compensation for delays caused by the owner.” Later, the owner suspends
work on the site for a period of two months because the delay is advantageous to the owner
in its dealings with prospective tenants. The contractor claims compensation. Should the
clause be enforceable? Explain.
Definition
This is an example of an intentional delay caused by an owner. Keep in mind the principle
that one party should not be put at the mercy of another, as well as the principle that a party
should not intentionally hinder the progress of the other party. A court would likely interpret
the clause so that it would not apply to deliberate delays.
Term
Explain why neither party is usually able to recover damages for a concurrent delay.
Definition

In a concurrent delay, each party can successfully argue lack of causation. The delay would
have taken place “but for” their own fault; therefore, they did not cause it. This situation is not identical to Question 1, wherein two subcontractors have each caused delay to another party who is claiming against both. The critical difference between Question 1 and this
question is that in Question 1 the delay was caused by two parties who are not asserting a delay claim of their own, whereas in a concurrent delay each party would be asserting its own claim against each other.

Term
What term describes activities that have no float?
Definition
They are critical path activities
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