Construction Contract FInal Vocab

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64 Terms

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Concurrent Delays

delays caused by both owner and contractor

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Construction acceleration

owner doesnt give valid time extension forcing contractor to speed up

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Directed acceleration

when owner tells contractor to speed up

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Excusable delay

delay not contractors fault (owner, weather, strikes)

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Non-Excusable Delay

delay that is Contractor’s fault (including subcontractors/suppliers)

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Liquidated damages

establishes the damages contractor pays if work is completed after completion date

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No Damage for Delay Clause

clause that contractor may not recover damages for delays only time extensions

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Noncompensable delay

delay where contactor not at fault and gets more time but not money

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Notice to proceed

official communication of owner telling contractor to start

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Prospective and Retroactive approach

methods to determine if damage clauses are resonable

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Majority Approach

prospective approach applied at time contract was signed

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Additional Insured

a party added to another partys insurance

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Bid Bond

bond ensuring owner is compensated if lowest bidder refuses to enter contract

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Builders risk insurance

covers physical damage to building during construction

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Commercial Liability Insurance

covers third party injury caused by construction

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Damage Bond

bond where a surety(person of responsibility) pays owner if contractor fails to execute the contract

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Professional liability insurance

covers claims over negligence in design

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Forfeiture Bond

bond where owner reciever liquidated damages if bidder refuses to sign contract

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Miller Act

requires performance and payment bonds on federal projects

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Payment Bond

Bond that guarantees pay to subs

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Performance Bond

bond that guarantees contractor completes project or pay

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Subrogation

right to insurance companies to seek reinbursement from resposible party

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Surety Bond

three-party agreement where the surety guarantees the performance or payment obligations of the principal to the obligee.

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Application for Payment

Formal request from contractor detailing amount of work completed and requesting payment. Based on schedule of values

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Mechanic’s Liens

legal claim filed against property by contractors who have not been paid. If unpaid there may be a force sell of property. State statue and not public projects

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Pay-If-Paid

payment clause where subs are paid when contractor is paid. Courts require this clause to be explicit and unambiguous

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Progress Payments

periodic payments made to contractor as work is completed. Based on percentage of work completed

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Retainage

percent of each progress payment withheld by owner until project completion

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Schedule of Values

detailed breakdown of all work items and values. Updated as project goes along

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Stop Notice

statutory remedy that allows sub to place claim on funds against owner not property when not paid. Owner must stop paying contractor.

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Anticipatory Breach

breach that occurs when a party refuses to perform contracted duties before performance is due

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Express Warranty

contractural promises that the work will meet specific standards or include certain materials

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Implied warranty

unwritten legal obligations requiring construction be performed completely and habitually. Includes warranty of habituality

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Material breach

breach that is a significant violation of contract and causes other party to terminate contract

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Minor breach

breach that does not defeat overall purpose and non-breaching party must continue but sue for damages

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Negligent misrepresentation

tort claim where a party, design professions, has wrong drawings causing another party financial harm

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Statue of limitations

legal time to bring a claim. Begins when defect is discovered

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Statue of repose

law that doesnt allow claims after a certain time even if defect is discovered

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Termination for cause

ending a contract due to not paying, bad performance etc.

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Termination of conveneience

owner terminating without cause. Contractor is compensated for work performed etc

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Unfair/Deceptive Trade Practice Act

state laws designed to protect consumers when there is misleading information like false promises and timelines

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Warranty of habituality

new homes are safe and suitable for living

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Final completion

occurs when all work is done. Triggers final payments and waiver of all claims in most cases

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Punch list

list of all minor outstanding items

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Substantial completion

point where project is completed enough for owner to use as intended

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Uniform Commerical Code

set of laws governing transactions involving goods in construction

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Clerk of the Works

inspects the workmanship, quality and safety of work on construction sites

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limit of liability

max amount insurance pays for a covered loss

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underwriting

process where insurance company evaluates a contractor to determine if a bond can be issued

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surety, principal, obligee

three parties in a tripartitie relationship

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indemnity provisions

shifts liability from contractor to sub when contractor is sued due to sub

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Breach of Contract

common law standard for termination

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proximate cause, breach, obligation, duty

4 parts of Negligence (PBOD)

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fiduciary

somone acts on behalf of another

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fraud, statue of limitation

defenses to a contract

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Agency Relationship

cilent, agent, representative

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interrogations and depositions

2 parts of the discovery phase of a lawsuit

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mutual agreement

Formation fo contract needs

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parol evidence

agreement that not in contract that can be used in court

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personal, property, economic

3 interests that are protected in tort law

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privity

a legal agreement

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strict liability

contractor is a fault and lable for damages without having to prove uit

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clause

a restrictive covenant

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deed

document that transfers entire title of a property