Section 1 Study Set E

ACCELERATION COST

cost incurred by a contractor when the project is interfered with by the owner, in such a way, that the contractor must employ more manpower or work more hours in order to complete the project on time. If the contractor contributes to the cause of its own delays, acceleration cost may not be granted.

ACCEPTANCE

act of a person to whom a thing is offered by another whereby he receives the thing with the intention of retaining it, such intention being evidenced by a sufficient act. (See CONTRACT)

ACTIVE INTERFERENCE

action by a party to a contract that causes the other party of the contract to not complete the work of the project on time or in the manner established by the contract writing. Positive action must be performed on the part of the interfering party as opposed to passive negligence, which is inactive, permissive, or submissive.

ACTUAL DAMAGES

(ACTUAL LOSS) - damages resulting from real and substantial loss, as opposed to those which are merely theoretical, estimated, or anticipated. Actual damages represent the real and true value of the total loss suffered, as opposed to liquidated damages, which represent an estimated amount calculated as anticipated loss at a future time.

ADDENDA

modifications to the contract documents issued during the bid period. Addenda become official parts of the contract documents and are legally binding to the signatories of the contract.

ADVERSARY

parties to a contract are in an adversary or arms-length relationship to one another as a result of the commitment they have made to each other in the contract terms and conditions. This relationship is recognized by the courts and binds the two parties together in that relationship. In layman's language, it can be considered a relationship of mistrust.

AGENT

a person authorized by another to act for him or her; one who is employed to represent another in business and legal dealings with third persons. In a typical agency relationship, three parties are involved: a principal, an agent, and a third party.

ALLOWANCE

a sum of money set aside by the owner to remove a particular portion of work from competitive bidding. This is typical of government-subsidized institutions with work that must be competitively bid and with projects in which certain portions of the work are proprietary and, therefore, must be removed from competitive bidding.

ALTERNATE

a material or method used in place of the base material or method specified for the project. In a typical construction contract, the owner chooses the alternate or remains with the base requirement, giving it control over the total cost of the project.

AMBIGUITY

doubtfulness; doubtfulness of meaning, duplicity, indistinctness, or uncertainty of meaning of an expression used in a written instrument. The courts, interpreting a writing, will permit parol evidence to clarify the writing if the writing is in fact ambiguous.

ANTICIPATORY BREACH

Established when a contractor makes a positive and unequivocal statement that it will not or cannot substantially perform the contract or when a contractor, by any voluntary affirmative act, renders substantial performance of its contract apparently impossible.

ANTITRUST LAWS

Federal and state statutes to protect trade and commerce from unlawful restraints and monopolies.

APPARENT AGENCY

An agency relationship created by an act of the parties and deduced from proof of other facts.

ARBITRATION

The submission of a dispute to a third party (individual or panel), known as arbitrator(s), whose judgment is final and binding.

ARBITRATOR

One who resolves disputes between two parties.

LANDSCAPE ARCHITECT

The person or organization hired by the owner to design the project, responsible for the production of plans and specifications.

ASSIGNMENT

A legal action which allows a person who is not party to a contract to obtain the contract rights of a party who is.

ATTACHMENT

The act or process of taking, apprehending, or seizing person or property by virtue of a writ, summons, or other judicial order.

BETTERMENT

An improvement brought upon an estate (land and/or buildings) which enhances its value more than mere repairs.

BID

An offer to perform a contract for work and labor or for supplying materials at a specified price.

BID RIGGING

A violation of antitrust laws in the construction industry where contractors collude to manipulate the bidding process.

CONTRACTOR

A party that enters into a contract to perform work or provide services.

OWNER

The individual or entity that owns the project and enters into a contract with the contractor.

SUBCONTRACTOR

A party that is contracted by the main contractor to perform a specific part of the work.

CONSULTANT

A professional who provides expert advice in a particular area, such as structural, mechanical, or electrical design.

LIEN

A legal right or interest that a lender has in the borrower's property, granted until the debt obligation is satisfied.

JUDICIAL ORDER

A directive issued by a court that requires a party to do or refrain from doing a specific act.

INDEPENDENT CONTRACTOR

A person or entity contracted to perform work for another entity as a non-employee.

PUBLIC IMPROVEMENT

An enhancement to public property that increases its value, such as the widening of a street.

CONTRACTUAL REQUIREMENTS

The specific conditions and obligations that must be met for a contract to be valid and enforceable.

FINAL AND BINDING

A term used to describe a decision made by an arbitrator that cannot be appealed or contested.

EQUITABLE REMEDY

A judicial remedy that requires a party to act or refrain from acting in a certain way, often used when monetary damages are insufficient.

CONSTRUCTION PROCESS

The series of steps taken to complete a construction project, from planning and design to execution and completion.

CONTRACT RIGHTS

The legal entitlements that a party has under a contract.

BID DEPOSITORY

a clearing house for subcontractors to submit their bids for a particular project and for prime contractors to receive bids from the various subcontractors.

BID REJECTION

the act of not allowing a bid to stand because of an impropriety in the process of submission or as a result of the owner's arbitrary decision to reject the bid.

BOARD OF CONTRACT APPEALS

an independent administration quasi-judicial board to decide all public contract disputes.

BOILER PLATE

a term used to represent standard legal conditions inserted at the 'front end' of a construction contract.

BOND

an instrument with a clause, with a sum fined as a penalty, binding the parties to pay the same, and with the condition that the payment of the penalty may be avoided by the performance of certain acts by some, one, or more of the parties.

BID BOND

a form of security to insure that the bidder will enter into the contract if the award is made to it.

PERFORMANCE BOND

insures completion of the project by the contractor, guaranteeing that if the contractor defaults, the bonding company will step in and finish the work.

PAYMENT BOND

provides a source of payment for the contractors' or subcontractors' labor and materialmen.

BUILDER

one whose occupation is the building or erection of structures, the controlling and directing of construction, or the remodeling and adapting to particular uses of buildings and other structures.

BUILDING CODE

there are several model codes, including Southern Standard Building Code (SSDSC), Uniform Building Code (UBC), Building Officials and Code Administrators (BOCA), the National Building Code (NBC), and the International Building Code (IBC) one of which is enacted in most jurisdictions.

CAPACITY

the attribute of persons which enables them to perform civil or juristic acts; necessary for parties entering into a contract.

CASE LAW

the aggregate of reported cases forming a body of jurisprudence or the law of a particular subject as evidenced or formed by the adjudged cases.

CAVEAT

a caution; literally, 'let him beware.'

CERTIFICATE

a written assurance, or official representation, that some act has or has not been done, that some event occurred, or that some legal formality is being complied with.

CERTIFICATE OF OCCUPANCY

a document issued by the building inspector certifying that the structure conforms to all relevant code sections and is, therefore, safe for use.

Partial Certificate of Occupancy

A certificate issued for portions of the building to be occupied.

Certificate of Payment

A document issued by the Landscape Architect certifying that the contractor has adequately performed, presented to the owner for payment.

Certificate of Substantial Completion

The document issued by the Landscape Architect when the building, or a portion thereof, is complete to the degree that the owner can use it for its intended purpose.

Change

A revision to the original contract documents that may be made unilaterally by the owner.

Change Order

A document directing the contractor to erect a portion of the building differently than described in the original plans, affecting the price and/or time of the contract.

Field Order

A change that does not affect the price and/or time of the contract, thus not constituting a change order.

Claim

A demand or assertion initiated by one party of a contract against the other party, which may be in the form of a written letter or legal document.

Immunity

Legal status granted to a Landscape Architect in a quasi-judicial role, protecting them from liability as a result of their decisions in disputes.

Collusion

An agreement between two or more persons to defraud someone or obtain an object forbidden by law, often involving conspiracy or deceitful purposes.

Competitive Bidding

A process where sealed proposals are submitted to the owner for public works projects, mandatory for public projects but optional for private owners.

Consideration

The inducement to a contract; the cause or motive that induces a party to enter into a contract.

Constitution

The written instrument agreed upon by the people as the absolute rule of action and decisions for government departments, which must control until changed.

Construction Management

A professional management process applied to a construction program from conception to completion for controlling time, cost, and quality.

CONSTRUCTIVE

that which has the character assigned to it in its own essential nature but acquires such character as a consequence of the way in which it is regarded by a rule or policy of law; hence, inferred, implied, or made out by legal interpretation.

CONTINUOUS TREATMENT

an uninterrupted, unbroken series of activities or events; this theory is sometimes employed in the determination of statute of limitation claims regarding the commencement of the time for the claim.

CONTRACT

a promissory agreement between two or more persons that creates, modifies, or destroys a legal relationship; several essential elements must be present in order to render a contract valid.

CONTRACTUAL DUTY

the obligation which arises from a contract or agreement; the parties are required to fulfill the duties enumerated in the contract writing between the two parties.

CONTRIBUTION

the sharing of a loss or payment among several debtors; the act of any one or several of a number of co-debtors in reimbursing one of their number which has paid the whole debt or suffered the whole liability.

ACCELERATION

typically used with other legal terms such as 'constructive,' indicating that in the absence of an acceleration clause, it is the actions of party that determine the validity of acceleration costs.

CONSTRUCTIVE CHANGE

indicating that although a change may not have been directed, it is implied by the act or omission of the parties involved.

STATUTE OF LIMITATION

typically starts to run upon completion of the project; however, if the contractor is required to repair defects in the work and renders 'continuous treatment' to the work, the contractor may extend the time for commencement of the statute.

BID PROPOSAL

considered an offer in the construction industry, especially in public bidding, where the owner's selection of the bid is the acceptance.

MEETING OF MINDS

represents that which was intended by both parties at the time of the signing of the contract and that both parties were in harmony with each other's intentions.

MUTUALITY OF ASSENT

the state of mind of the individuals must be such that they are free to enter into the contract or not to enter into the contract.

PRIME CONTRACTOR

a contractor hired directly by the owner.

CONTRACTUAL OBLIGATION

another term for contractual duty, referring to the obligations arising from a contract or agreement.

CUSTOM

a usage or practice of the people which, by common adoption and acquiescence and by long and unvarying habit, has become compulsory and has acquired the force of a law with respect to the place or subject matter to which it relates.

DAMAGES

compensation for a loss or injury suffered; compensation which may be recovered in the courts by any person who has suffered loss, detriment, or injury, whether to his or her person, property, or rights, through the unlawful act, omission, or negligence of another.

DAMAGES, ACTUAL

real, substantial, and just damages, or the amount awarded to a complainant in compensation for actual and real loss or injury, as opposed to 'nominal' or 'punitive' damages.

DAMAGES, COMPENSATORY

repair or replacement of the loss caused by the wrong or injury and nothing more.

DAMAGES, CONSEQUENTIAL

such damage, loss, or injury which does not flow directly from the act of the party but only from some of the consequences or results of such act.

DAMAGES, DELAY

the economic loss suffered as a result of extended time from that of the original time stipulated in the contract writing.

DAMAGES, LIQUIDATED

a specific sum of money expressly stipulated by the parties to a bond or contract as the amount of damages to be recovered by either party for a breach of the agreement by the other.

DAMAGES, PUNITIVE

awarded by the courts in the amount of three times the actual damage.

DEFAULT

an omission of that which ought to be done; a failure to perform a legal duty.

DEMURRER

an allegation of a defendant which, admitting the matters of fact alleged by the bill to be true, shows that they are insufficient for the plaintiff to proceed upon or to oblige the defendant to answer.

DESIGN-BUILD

a method of organizing a building project in which a single entity undertakes the design and erection of the structure at a set fee negotiated in advance.

DEVIATION

a change made in the progress of a work from the original terms, design, or method agreed upon.

"DIFFERING SITE CONDITIONS" CLAUSE

typically provides that in the event that the physical conditions at the site of the work vary materially from those represented or reasonably anticipated and in a manner which increases the time or cost of performance, the contractor is entitled to additional compensation or an extension of time.

DISCLAIMER

the disavowal, denial, or renunciation of an interest, right, or property imputed to a person or alleged to be his.

DISCLOSURE

to bring into view by uncovering, to lay bare, to reveal, to free from secrecy or ignorance, or to make known; revelation; the impartation of that which is secret; that which is disclosed or revealed.

DISCOVERY

the ascertainment of that which was previously unknown, the disclosure or coming to light of what was previously hidden, the acquisition of notice or knowledge of given acts or facts as in regard to the discovery of fraud affecting the running of the statute of limitations, or the granting of a new trial for newly discovered evidence; disclosure of facts resting in the knowledge of the defendant or of deeds, writings, or other things in his custody or power.

DOCUMENT, DOCUMENTATION

instruments which record, by means of letters, figures, or marks, matter which may be evidentially used; the deeds, agreement, title papers, letters, receipts, and other written instruments used to prove the facts.

ECONOMIC LOSS

additional cost incurred by an individual other than property damage or personal injury. In the construction industry, an economic loss may be represented by a loss in profits or a loss due to a delay in the contractor's schedule.

ENGINEER

a person with a particular expertise in a limited area of building design. An engineer typically may specialize in structural, mechanical, electrical, or plumbing design.

EQUITABLE DOCTRINE

just and conformable to the principles of justice and right; existing in equity; available or sustainable only in equity or only upon the rules and principles of equity.

EQUITY, COURT OF

court which administers justice according to the system of equity and according to a peculiar course of procedure or practice.

ESTOPPEL, PROMISSORY

an equitable doctrine which holds the promisor bound to a promise if injustice can be avoided only by enforcement of the promise.

EXCLUSIVITY OF CONTRACT PROVISIONS

when a remedy for breach is included as a part of the contract, that remedy is considered exclusive of other remedies provided by law.

EXCULPATORY LANGUAGE

clause in which a party who may suffer a loss agrees not to institute legal action against the party who may cause the loss.

EXPERT WITNESS

may be a person of science, one educated in the arts, or a person possessing special or peculiar knowledge acquired from practical experience.