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161 Cards in this Set
- Front
- Back
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Acts of God |
Events causing a project delay that are not caused by the owner or the contractor. Such delays often result in adjustments to the contract duration but no to the contract amount. |
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Actual Acceleration |
An increase in the pace of construction as a result of a specific directive from the owner. |
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Addenda |
Formal changes or clarifications issued to all identified bidders by the owner or the owner's representative during the bidding period |
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Additional Work |
Construction work that was not recognized at the contract award but that must be performed in order to deliver a project as planned. |
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Adverse Weather |
Weather conditions not anticipated in a particular location for a particular time of the year that impede construction progress. |
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Advertisement |
A public announcement to solicit bids for a construction project. |
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Agency Agreement |
An arrangement between a principal and an agent by which the agent agrees to perform certain tasks for the principal. The principal is BOUND by the actions of the agent. |
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Agent |
A party who acts for another party and binds that party by those acts. |
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Alternatives |
An itemization of selected items of work for which bidders are asked to provide prices that will add to or subtract from the base bid. These priced items give the owner greater flexibility in choosing items to add or delete from the contract. |
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Alternative Dispute Resolution Technique (ADR) |
A means used for settling conflicts by means of an alternative procedure to formal litigation. |
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Arbitration |
A well-established alternative to litigation in which conflict is resolved by an impartial panel of selected individuals.
The submission of a dispute to a third party (individual or panel), known as arbitrator(s), whose judgment is final and binding. Decisions at arbitration hearings, unlike those in judicial cases, do not establish precedents. |
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As-Built Drawings |
Also called as-builts; Project drawings that show all data concerning the actual in-place locations of all construction items, including any items the differ from what was shown i the original drawings. |
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Balanced Bid |
A unit price bid that accurately reflects the actual anticipated price of each item of work to be performed. |
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Bid Bond |
A surety instrument that guarantees to the owner that the bearer, if awarded the contract, will enter into a binding contract and provide all required bonds. |
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Bid Peddling |
The effort by a bidder, usually a subcontractor, on a project to determine the relative standing of a quoted bid. If the bid is not the lowest bid, the bidder may reassess the amount originally quoted and submit a lower bid before the deadline for bid submittal. |
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Bilateral Contract |
An agreement made through the mutual promises of the contracting parties. |
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Board of Directors |
An elected group of individuals who assigned the responsibility of managing a corporation. They act as agents for the stockholders and are accountable to them. |
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Broiler Plate |
The general conditions that outline the roles of the parties to a construction agreement and provide guidance concerning procedures to follow under varying circumstances. |
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Bonding Capacity |
The maximum amount of uncompleted construction work that a contractor can have under contract, above which no bonds will be provided. |
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Brokerage |
A situation in which the general contractor subcontracts all the work on a project. |
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Builders Risk Insurance |
Construction insurance that provides coverage specifically for a project that is under construction. (Normally considered to be Fire Insurance -- other types of losses are also generally covered) |
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Calendar Days |
The time unit that may be used to define the duration of construction. |
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Cardinal Change |
A change order that is of such magnitude that the original scope of the project is altered to an extent that constitutes a new contract. |
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Caveat Emptor
(Let the Buyer Beware) |
A defense, no longer valid, in which it is assumed that a product must be accepted with whatever flaws exist at the time of purchase. |
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Certificate of Insurance |
A written document that serves as evidence that a particular insurance policy is in force. |
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Change Order |
A directive, usually authorized in writing by the owner, to alter or modify some aspect of a project. Such a directive is generally accompanied by an adjustment to the contract amount and/or the contract duration. |
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Closed Specification |
A specification that is expressly restrictive in stating that only one or two products will satisfy the quality requirements, or is implied when performance is so narrowly prescribed that only one or two products will satisfy the requirement. |
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Code of Ethics |
The written standards of behavior adopted by a profession. |
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Completion Date |
The time of construction; stated not in terms of a specified duration, but as a specified date by which construction must be complete.
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Compliance Officer |
The title of OSHA employees who are responsible for enforcing OSHA regulations through site inspections. |
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Complimentary Bid |
A bid that is not prepared in earnest, but is presented to appear to be a serious bid. Such bids are usually generated through collaborative efforts with another bidder who does submit a serious bid. |
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Condemnation |
The exercise of eminent domain to seize private property. |
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Consideration |
An essential ingredient to a contract that implies something of value, commonly a stated sum of money. |
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Construction Schedule |
A detailed network analysis of bar chart of a construction project showing the sequence and duration of activities required to construct a project. |
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Constructive Schedule |
An increase in the pace of construction that is not a result of a directive but is done by inference. Denial of a legitimate request for a time extension, such as for an excusable delay or a change order, would be and example. |
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Constructor |
The party, also called the prime or general contractor, who has primary responsibility for the construction of a project. |
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Contractor-caused Delays |
Construction delays caused by or under the control of the contractor. No contract adjustments are associated with such delays. |
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Contributory Negligence |
Careless acts of an injured person that accompany the careless acts or physical conditions under the control of a second party. |
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Cost-Plus Contract |
A contract in which the contractor is reimbursed for specified incurred costs, with an additional allowance provided for overhead and profit. |
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Counter Offer |
THe rejection of an offer followed by another proposal. This proposal forms a new offer. A counteroffer by a party changes the roles of the negotiating parties. |
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Critical Activity |
An activity in a construction schedule that must be completed in the time allotted for its completion or the project duration will be increased. |
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Dedication |
Public permission granted by the owner of property for the public to use a given parcel of land for a specified use. This cannot be denied as long as consistent use is made as specified. |
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Design-Build Method |
An arrangement by which the owner lets a single contract for both the design and the construction of a project; also known as design-construct or turnkey construction. |
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Designer |
The party responsible for translating the concept of a project to a document that can be used as a guide for its construction. |
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Design Specifications |
"How To" specifications that state exactly what the contractor is to do in order to satisfy a quality requirement. |
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Differing Site Conditions |
Physical conditions on a site that differ from what was shown in the bidding documents or from what would reasonably be expected. |
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Disputes Review Board |
A panel of experts selected on a project to render decisions on disputes brought to it for consideration.
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Dividendes |
Monetary return made by insurance companies to clients who have kept losses to an acceptably low level. Also, profits of corporations shared with stockholders. |
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Dual Gates |
Two entrances established on a construction project where both union and nonunion workers will be employed. One entrance will be established as the "union workers only" entrance and the other can be used by any worker. A nonunion worker passing through the union gate will result in "contamination" of the gate and can result in a labor dispute. |
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Easement |
The restricted use of private land granted to another party. The use may be in the form of the right to cross a parcel of land to gain access to another; the right to install, maintain, and monitor a gas line; etc |
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Eichleay Formula |
A means by which delay reimbursement can be made to the contractor to compensate for home office overhead. Not accepted universally. |
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Eminent Domain |
The right of federal government, state government, or another public agency to take possession of private property and appropriate it for public use. |
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Estoppel |
The legitimate, through implied, formation of a contract as evident through the actions of the parties involved. When one party places a reliance on the other party based on that party's actions, the second party cannot subsequently deny that an agreement exists. |
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Exclusions |
Specific items stated in an insurance policy for which no coverage is provided. |
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Exculpatory Provisions |
Contract clauses that shift liability from one of the contracting parties to the other. In the absence of such a clause, the shift in risk will not occur. |
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Excusable Delays |
Delays for which time extensions are granted. Such delays typically include acts of God and owner-caused delays.
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Executed Contract |
An Agreement in which both parties have fully performed in accordance with the contract terms. |
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Executory Contract |
An agreement in which one or both parties to the agreement have not yet performed. |
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Experience Modification Rating |
A factor, unique to a company, that reflects the past claims history of that company. This factor is used to increase or decrease the basic insurance premium charges. |
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Express Contract |
An agreement in which the terms of the agreement, whether verbal or written, are clear, concise, explicit and definite. |
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Express Warranty |
The specific statement in a contract that a warranty is to be effective on a project. |
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Extra Work |
(Change Order) |
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Field Change |
An authorized directive, usually by the owner's representative on a project, to alter or modify some aspect of the project. Normally, such a directive is not accompanied by any change in the contract amount or duration. |
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Final Completion |
The status of a project when all punch list items have been satisfactorily addressed and the owner officially accepts the project. At this point, the retainage can be released to the Contractor. |
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Fixed-Price Contract |
(Lump Sum Contract) A contract in which the contractor agrees to construct a project for a specified sum of money. |
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Force Account |
Arrangement in which the services of a contractor are reimbursed on a cost plus basis; also called a Time and Materials Contract |
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Front-Loading |
A plan initiated by a contractor in which a disproportionate share of the payments to be made to the contractor is made early in the life of a project. This is a means of getting the owner to finance a greater share of the project. |
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General Conditions |
The general conditions that outline the roles of the parties to a construction agreement and provide guidance concerning procedures to follow under varying circumstances. AKA - Boiler Plate |
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General Contract Method |
A common procedure in which the owner of a project contracts with a single firm, often called a prime contractor, for its construction. This firm may contract with specialty contractors for portions of the work. |
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Holding Company |
A firm that has a dominant interest in one or more other companies so as to be able, through its voting power, to prescribe the management policies of those companies. |
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Holidays |
Days on which working days are not assessed against the contract duration. Such holidays must be clearly noted in the contract documents. |
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Housing Starts |
The number of new homes placed under construction in a stipulated period of time, generally one month. This figure is used as an indication of the strength of the US economy. |
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Implied Contract |
An agreement in which the terms of the agreement are not clearly stated but are established through inference and deduction. |
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Implied Warranty |
The general interpretation in the courts that a warranty exists despite the fact that there is no express warranty. |
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Inclusions |
Specific terms, as stated in an insurance policy, for which coverage is specifically provided. |
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Indemnification |
An exculpatory provision in which one party to an agreement agrees to hold the other party harmless. That is, one party assumes the liability that would normally fall on another party. |
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Independent Contractor |
A contractor hired to produce a product without being specifically supervised or constrained by specific methods and means of performance. |
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Instructions to Bidders |
Guidelines or rules enumerated for bidders on a project concerning proper procedures for bid submittal and relevant project information. |
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Joint Venture |
A company formed by two or more companies in which the sole objective is typically to construct a single project. |
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Letter of Credit |
A demand instrument issued by a bank that guarantees the availability of a specified amount of funds to be paid to the owner in the event of contractor default |
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Lien |
A claim placed on real property Typically but Subcontractors who don't get paid
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Limited Partner |
A partner who contributes to a partnership and shares in the profits and losses, but provides no services and has no vote in matters of management. |
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Limits of Liability |
THe maximum coverage for which a specified liability policy is written. |
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Liquidated Damages |
A specified sum of money that is charged against a contractor for each day that project completion is delayed. This amount is assumed to accurately reflect the anticipated costs of late completion. |
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Litigation |
A means of resolving disputes in the judicial system in which a formal claim is filed and the disputing parties typically obtain the services of lawyers. |
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Loss Ratio |
A quotient that reflects the amount of funds expended by an insurance company for the claims of a client, divided by the amount of premiums paid by that client. |
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Lump Sum Contract |
A contract in which the contractor agrees to construct a project for a specified sum of money.
Owner has an idea of anticipated costs and can cancel or terminate contract if lump sum bids are excessive. |
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Mechanic's Lien |
A right created by law that permits a worker to place a claim on land which improvements have been made. |
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Mediation |
An alternative to litigation in which knowledgable individuals talents are used to get the disputing parties to agree on a compromise resolution to the conflict. |
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Meeting of the Minds |
A basic ingredient in contracts in which the contracting parties agree on the basic meaning and legal implications of a contract. |
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Minitrial |
An alternative to litigation in which one or more individuals are asked to hear a case and render a decision. The rules for hearing such cases may be established on an individual basis. |
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Morals |
Generally accepted standards of social behavior for a community or society. |
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No-Damage-For-Delay Clause |
A contract provision that is exculpatory in nature and is intended to bar the contractor from receiving monetary compensation of any kind for any delays that may occur on a project, regardless of the source of delay. |
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Notice to Proceed |
A means of notifying the contractor about the decision to award the contract and of specifying when the contract time will start. |
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Obligee |
A party whom a duty is promised by the surety. |
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Offer and Acceptance |
One of the basic ingredients of a contract. After and offer is made a contract can become binding only if the other party agrees to be bound by the contract terms and accepts the offer. |
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Open Specification |
An open or nonrestrictive specification in which a wide variety (3 or more) of products are considered suitable. |
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Owner |
The party with the overall responsibility for a project beginning from inception and ending with the project sale or occupancy. |
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Owner-Caused Delays |
Construction delays directly attributable to the action or lack of action of the owner. Generally the contract duration will be extended for such delays, and the contract amount may be adjusted. |
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Owner-Controlled Insurance Program (OCIP) |
Insurance for a project that is obtained entirely by the owner.
Wrap-up Insurance |
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Partnering |
Voluntary arrangement whereby the parties on a construction project agree to work together as a team with a common objective and to resolve disputes at the lowest managerial level. |
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Partnership |
An association of two or more persons to carry on a business. Each person acts as an agent for the other partners. |
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Payment Bond |
A surety instrument guaranteeing the bearer's payments to suppliers, laborers, and subcontractors. |
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Penalty Provision |
A specified sum of money that is charges against a contractor for each day that project completion is delayed. THe amount is greater than the amount of the liquidated damages because a portion of it is considered a punitive assessment. To be valid, such a provision must also compensate or reward the contractor for early completion. |
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Performance Bond |
A surety instrument in which the faithful performance of a contractor is guaranteed up to the face value of the bond. |
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Performance Specification |
A descriptive requirement that states the results or the performance of the finished product rather then the specific methods and means used to construct the product. |
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Periodic Payments |
A payment tot he contractor that compensates the contractor for work performed up to a given date. Such payments generally are made monthly and are reduced by a given percentage that is retained by the owner until final completion.
Progress Payments |
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Postbid Bid Shopping |
The effort by a bidder, usually a subcontractor, on a project to determine the relative standing of a quoted bid. If the bid is not the lowest bid, the bidder may reassess the amount originally quoted and submit a lower bid before the deadline for bid submittal. (Bid Peddling) |
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Bilateral Contract |
An agreement made through the mutual promises of the contracting parties. |
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Board of Directors |
An elected group of individuals who are assigned the responsibility of managing a corporation. THey act as agents for the stockholders and are accountable to t hem. |
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Preconstruction Conference |
A meeting between the owner, the general contractor, and the major subcontractors takes place after the contract is awarded but before construction begins. This conference addresses various matters deemed to be of importance to the project. |
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Premium |
A payment made to an insurance company in exchange for a specific type of coverage. |
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Prescription |
The legal transfer of private property to a property to a public agency or another private citizen that can occur when that property has been subjected to adverse use for a stipulated number of years. |
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Professional Construction Management Method |
A method in which the owner hires a construction management firm to perform professional services and represent the owner during the design and construction phase. |
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Progress Payment |
A payment to the Contractor that compensates the contractor for work performed up to a given date. Such payments generally are made monthly and are reduced by a given percentage that is retained by the owner until final completion. |
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Progress Schedule |
An updated construction schedule that presents and accurate portrayal of the work accomplished up to a given date. |
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Proprietary Specification |
A closed specification that names a product made by a particular manufacturer. |
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Proprietorship |
A firm owned by an individual. |
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Punch List |
A list developed at the time of substantial completion that itemizes all remaining work tasks that must be performed before a project reaches final completion. |
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Quantum Meruit |
Term meaning "As much as deserved"; An approach used to determine equitable compensation to be awarded under given conditions. It is implied by law that when one party benefits as a result of the material or labor provided by another that there should be no unjust enrichment. If the parties do not have a contract, the party providing the labor / materials is to receive fair compensation. |
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Ratification |
The approval of an unsanctioned act after it has taken place. |
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Real Property |
Land and all items physically attached to it, such as buildings, fences, utilities, and walls.
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Reference Specification |
A performance specification that defines the acceptable product in terms of its ability to satisfy a standard developed by one of several standards organizations. |
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Regular Bid |
A bid that conforms to the standards outlined in the instructions to bidders. Only such bids can be considered on public projects to assure all bidders of fair and equal treatment. |
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Reserve |
A given sum of money that an insurance company sets aside to cover anticipated claims costs on a case that is not closed. |
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Retainage |
A stated percentage of the progress payment request that is withheld by the owner. This amount is generally used as an incentive for the contractor to complete the project in an expedient manner. It is generally returned to the contractor after final completion. |
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Self-Insurance |
An arrangement by which a firm acts as its own insurance company. Specific criteria myst be satisfied for a company to qualify for self-insurance. |
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Self-Performance |
A mechanism by which no contracts are awarded for a construction project. The owner's own workers or employees are solely responsible for the construction effort. |
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Separate Contracts Methods |
An arrangement by which the owner lets contracts directly to specialty contractors for various portions of the work. |
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Site Investigation |
An inspection of a proposed construction site during the bidding phase. Such an inspection is often contractually required to verify that the contractor is familiar with the site. |
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Specialty Contractors |
Firms with skills in specific areas of construction work. Such firms are typically involved construction projects as subcontractors. |
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Standard Specifications |
A compilation of general conditions, technical specifications, and other requirements that an agency uses on numerous construction projects. Such documents are prepared by state departments of transportation and major municipalities. |
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Stockholders |
The owners of a corporation, also known as shareholders. |
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Subcontractors |
A speciality contractor who enters into an agreement with a general contractor. The subcontractor has no contractual agreement with the owner. |
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Submittals |
Information concerning products to be incorporated in a construction project that must be approved by the owner before they are used. This information may include samples, calculations, performance tests, and manufacturers literature. |
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Subrogation |
An insurance term stating that when the insurance company pays for a particular loss to an injured party, the insurance company gains the injured party''s right to sue the third party that caused the injury. |
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Substantial Completion |
A designation of when a project is sufficiently finished to be occupied by the owner. The duration of the project is measured against substantial completion to determine when the last periodic payment can be made. |
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Supplemetary Conditions |
Modifications or additions to the general conditions that address issues that were omitted in the general conditions, or are specific requirements for a particular project. |
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Surety |
A firm that guarantees or vouches for the performance or indebtedness of another party. |
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Suspension of Work |
A halt in the construction process for any or several reasons. |
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Technical Specificaitons |
A document that provides the qualitative requirements for a project in terms of materials, equipment, work performed and so forth. |
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Termination |
The cancellation of a contract before construction is complete. May be for the owner's convenience or for contractor default. |
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Time Extensions |
Modifications to a construction contract in which the project duration is increased. Such modifications are often granted for excusable delays or for change orders that increase the project duration. |
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Tort |
A wrong committed by a person against a second party as a result of an act or the failure to act when that person had a duty to the second party. |
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Turnkey Construction |
An arrangement by which the owner lets a single contract for both the design and the construction of a project; also known as design-construct or turnkey construction.
Design Build Method |
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Ultra Vires Contracts |
Agreements made by corporations for which the proper authorization was not made. Such agreements must ofter be ratified in order to be binding. |
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Umbrella Coverage |
An insurance policy that is generally used to provide coverage in excess of the limits of coverage of another insurance policy. |
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Unbalanced Bid |
A unit price bid in which the pricing of the various items of work does not reflect that actual anticipated costs, but redistributes those costs to serve a specific objective of the bidder. |
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Unilateral Contract |
A contract in which only one of the contracting parties makes a promise. The other party exchanges something other than a promise, commonly performance. |
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Unit Price Contract |
A contract in which payment is based on a contractor's quoted price per unit of work performed and the owner's measurement of the total number of such units installed. |
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Unjust Enrichment |
A circumstance under which one party benefits at the expense of another without equitable compensation being given to the party that provided the labor and / or materials. |
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Value Engineering |
A critical examination of construction contract documents performed for the owner to determine whether modifications can be made to decrease the delivered cost, reduce maintenance costs, simplify construction, reduce disputes and the like. |
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Warranty |
certification that a certain aspect of a project is of the quality it was promised to be. In construction, such assurances are generally provided for one year from substantial completion. |
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Warranty Period |
The duration for which a warranty is in effect, typically one year on construction projects. |
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Winter Exclusion Period |
A block of time, often consisting of several winter months, during which no working days are assessed against a contractor. Such exclusion periods are most common in states with harsh winter weather conditions. |
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Workers Compensation |
Insurance coverage for the employees of a firm during their employment. |
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Working Days |
The time unit used to define the duration of a construction project. These days typically consist of work days except for holidays. Allowances are often granted to extend the project duration if adverse weather is encountered. |
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Wrap-Up Insurance |
Insurance for a project that is obtained entirely by the owner. |
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Zoning |
Restrictions placed on land usage to assure orderly growth and development in a municipal area. |
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Surety Arrangement |
Surety: (Bond Company) Obligated to perform or pay $X amount if Principal doesn't perform. Principal: Principal debtor is the party (GC) whose performance is promised / guarented. Obligee: Party (Owner) whom promise of princiapls (GC) performance is made. ***Obligee is beneficiary of the bond. |
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GC requires Subs to have Surety Bond |
Roles change --> Obligee : General Contractor Principal : Subcontractor Surety: Bonding Company |
