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62 Cards in this Set
- Front
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general contract method, or design-bid-build |
contract drawn up between owner and general contractor. Owner usually represented by firm that drew up contract documents, such as an architecture firm |
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separate contracts method, or multiple prime |
owner as manager, makes contracts directly with specialty contractors |
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self-performance method |
appropriate when project is small, simple, and ongoing; common for county road maintenance |
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design build method |
single entity undertakes the design and erection of the structure at a set fee negotiated in advance. Owner negotiates only one contract with one organization |
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fast-tracking |
allows the contractor to begin construction on earlier phases of the project before the plans are completed for the entire project. Caution must be exercised in the signing of a contract using these fast-track methods because of the lack of information typically expressed in a conventional method of contract. Many changes may result when going from phase to phase, and provisions must be included in the contract to compensate the contractor for additional work |
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a contract is executed when |
both parties have fully performed in accordance with the contract's terms |
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a contract is executory when |
some portion of the agreement remains to be done, such as the owner not yet paying for the work |
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bilateral contract |
mutual promises |
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unilateral contract |
one-sided contract, such as a contractor buying something from someone |
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express contract |
almost all construction contracts are express; terms of agreement are clear, concise, explicit, definite |
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a valid contract includes the following criteria |
offer and acceptance, a meeting of the minds (agreement), consideration, lawful subject matter, competent parties |
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consideration |
something of value received by one of the parties in exchange for another item or action that is of value; the inducement to a contract |
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estoppel |
principle by which a contract becomes binding even though a formal agreement wasn't made; an agreement is made based on the behavior of the parties |
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promissory estoppel |
an equitable doctrine which holds the promisor bound to a promise if injustice can be avoided only by enforcement of the promise. A typical application of this doctrine in the construction industry is holding a subcontractor to its bid submitted to the prime contractor |
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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. A contractor, for example, may assign the rights contained in its contract with the owner to a subcontractor. In a similar manner, the Landscape Architect can assign portions of the design of the project to its consulting engineers, primarily in the areas of structural, mechanical, and electrical design |
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lien |
a charge, security, or encumbrance upon property; a claim or charge on property for payment of some debt, obligation, or duty |
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zoning |
division of real property into classification of use and local governance over structures that may be erected |
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mechanic's lien |
right created by law that permits workers and suppliers who provide improvements to real property to place a claim on the land if they're not paid |
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agent |
represents the principal in dealing with a third party or parties. In the construction industry, atypical misunderstanding is that the Landscape Architect is the agent to the owner in dealing with the third-party contractor. The Landscape Architect, in a typical contract, is the representative of the owner and not the agent. In some contracts, the construction manager is an agent of the owner. An agency relationship is established in writing (express agency) with all three parties acknowledging the relationship. An agency relationship may also be established by acts and/or omissions of the parties (implied or apparent agency) which will bind the parties legally in the same manner as an expressed agency relationship |
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exculpatory provision |
contract clause that shifts liability from one contracting party to another (such as from owner to general contractor) |
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indemnification |
an exculpatory provision where one party agrees to hold the other harmless (also hold-harmless clause); the process by which one party seeks to protect itself from any claims by a plaintiff who has been injured or who has suffered loss. One method of obtaining indemnification is to obtain a promise from the contractor that it will insure the owner, and in some cases the architect, against any liens or suits by a third party not privy to the contract. The courts generally enforce contractual indemnification provisions; but, they are hesitant to permit a party to use indemnification when that party has played a major role in causing the loss. Indemnification is a contractual obligation by which one person or organization agrees to secure another against loss or damage from specified liability |
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tort |
a private or civil wrong or injury; a wrong, or breach of duty, that doesn't involve a contract; for tort to occur: one party owes the other a duty, that party does not conform (breach in performance), 2nd party is harmed, clear causal relationship between the act and harm |
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tort examples |
defamation through libel or slander; unlawful entry; unwarranted seizure or destruction of property; unauthorized use of another's patents or trademarks; violation of freedom through nuisance or negligence; failure to exercise care |
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standard of care (performance) |
that standard which a professional must exercise to the degree of care and expertise which a reasonably competent professional of the same discipline would exercise under the circumstances. The standard of performance is established by the professionals working in the same geographical are |
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negligence (often in tort cases) |
failure to exercise the degree of care which a reasonable and prudent party would exercise under the same circumstances. The inaction results in an injury to a third party. Negligence is committed when a contractual duty is breached. An example of negligence is where an architect failed to indicate in the plans the existence of an electric power line which he or she knew to be in the area of construction. Parties responsible often pay money damages. |
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surety bond |
third party guarantees that the contractor will fulfill the terms of the contract; surety is the bond company; principal is the party (general contractor) whose performance is guaranteed; obligee is the beneficiary of the bond |
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performance bond |
a legal instrument which assures that if the contractor defaults, the surety company will complete performance or pay damages to the extent of the bond |
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bid bond |
issued to assure that contractor will enter into a binding construction contract and will provide the required payment and performance bonds if the contract is awarded; face value often 5% of contract; surety pays damages; can also be the difference between the amount of the contract as awarded and amount of the proposal of the next lowest bidder but not to exceed the value of the bond |
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performance bond |
A 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. A performance bond also is applicable between a prime contractor and its subcontractor, assuring the prime that the subcontractor will perform or pay. Usually face value of 100% of contract price. Lasts usually to 1-yr warranty period or acceptance of completion by owner. |
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payment bond (labor and material bond) |
A payment bond (sometimes known as a labor and material payment bond) provides a source of payment for the contractors' or subcontractors' labor and materialmen; protects the owner by preventing liens |
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liquidated damages |
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. In the construction industry, it is an amount established in the contract writing to be withheld by the owner on a daily basis for every day past the stipulated completion date of the contract. A "liquidated damages" clause is to fix the amount to be paid in lieu of performance."Penalty" clauses, without some kind of balancing bonus, are rendered unenforceable in the courts of law |
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limit of liability |
maximum coverage for which a specific liability policy is written |
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stop notice |
informs the owner that subcontractors and suppliers have not been paid and that further payments are to be withheld by law from the contractor |
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payment bond stipulations (mandated) |
often requires written notice to surety of nonpayment within 90 days after last day that labor and materials were furnished under contract; must bring civil action on payment bond within a year and within two years on a performance bond |
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Trespass and Nuisance |
trespass is wrong committed again the real property of another; involves physical entry w/out permission but entry not restricted to humans (could be water). Nuisance is a disruption that produces personal discomfort to a landowner and does not require entry. |
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Project Manual |
Contains bidding requirements with contract forms, bonds, certificates; conditions of the contract; specifications |
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acceleration cost |
cost incurred by a contractor when the project is interfered with by theowner in such a way that the contractor must employ more manpower or work more hours in order tocomplete the project on time. If the contractor contributes to the cause of its own delays, accelerationcost may not be granted. |
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active interference |
action by a party to a contract which causes the other party of thecontract to not complete the work of the project on time or in the manner established by the contractwriting. Positive action must be performed on the part of the interfering party as opposed to passivenegligence, which is inactive, permissive, or sub-missive. |
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actual damages |
damages resulting from real and substantial loss, asopposed to those which are merely theoretical, estimated, or anticipated. Actual damages representthe real and true value of the total loss suffered, as opposed to liquidated damages, which representan estimated amount calculated as anticipated loss at a future time. |
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adversary |
two parties to a contract are in an adversary or arms-length relationship to oneanother as a result of the commitment they have made to each other in the con-tract terms andconditions. This relationship is recognized by the courts and binds the two parties together in thatrelationship. In layman's language, it can be considered a relationship of mistrust. |
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allowance |
a sum of money set aside by the owner to remove a particular portion of work fromcompetitive bidding. This is typical of government-subsidized institutions with work that must becompetitively bid and with projects in which certain portions of the work are proprietary and, therefore,must be removed from competitive bidding. |
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alternate |
material or method used in place of the base material or method specified for theproject. In a typical construction contract, the owner chooses the alternate or remains with the baserequirement, giving it control over the total cost of the project. An alternate differs from an option inthat cost is a factor in the selection of an alternate by the owner, whereas an option does not havecost as a factor and the choice is made by the contractor. |
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duty |
obligation that an LA is bound or required to perform, specified in relationship to the skills protected in licensing statutes to protect public health, safety, and welfare (protect NR & economic value of land) |
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libel or slander |
tort - libel is written, slander oral; must be an intent to injure, words must be untrue and communicated to another person, must be an injury, may be grounds for a lawsuit |
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violation of riparian rights; rights of lateral and sub-adjacent support |
types of tort - right of owner to reasonably use water flowing past land is violated or right of owner to have land supported by adjacent land is violated (e.g. an excavation on adj land hurts owner property) |
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partnership |
2 or more ind to provide LA services for profit; common business purpose, share in profits and losses, legal liability of partners for business decisions, ownership of property in the name of partnership |
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corporation |
exists independently of ind who have formed it, making it different than a partnership; continuity of existence, ownership of property, limited liability |
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joint venture |
partnership of limited duration with specific goal |
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scope of work |
title of the project as indicative of work, description of general features of project, preliminary estimate of cost |
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time with maximum upset; time with minimum upset |
a stated amount above which it is agreed the LA's fee will not rise; below which it will not fall |
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time and materials; cost plus fixed fee |
Time-and-materials involves the vendor billing the client for the cost of materials, as well as an hourly rate for the different types of labor involved on the project. CPFF is when the client pays the cost of the materials and time, plus a flat-fee on top of those costs. |
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bid allowance |
typically included in base bids as estimates for work that will be completed under the baseconstruction contract, but the exact costs or scope are indeterminate at the time of bid |
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general provision specs |
description of the work, reference to contract drawings, elaborations, work or materials provided by owner, have contractor submit shop drawings, progress schedule, sequence of work, materials testing reqs (specified tests in tech specs), layout of work, delivery and storage of materials, temporary structures and facilities, location of necessary utilities, field office, warranty of work |
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statute of repose |
statute that cuts off certain legal rights if they are not acted on by a specified deadline |
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malfeasance vs misfeasance |
conduct that is unlawful, particularly committed by public official vs conduct that is lawful but inappropriate |
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exoneration |
release of surety bond |
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writ of execution |
court order that is granted to begin the transfer of assets, money or property as the result of a legal judgment |
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force account |
payment method used for extra work if the public body and contractor cannot negotiate payment for added work; pays the contractor for the actual cost of the work |
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standard form 30 |
Amendment of Solicitation/Modification of Contract; amend a solicitation before it closes OR modify a contract |
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consequential damages |
flow indirectly from the consequences of an act rather than being the direct result of an act; Also called special damages, since they result from a breach of contract and yet would not necessarily be incurred by every injured party experiencing that breach. Consequential damages are generally not recoverable in contract disputes, but are recoverable in tort. |
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actual or compensatory damage |
the money to be paid |
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affidavit |
a written statement confirmed by oath or affirmation, for use as evidence in court |
