Understanding Contract Terms for Residential Construction Projects, Quizzes of Introduction to Business Management

Download Understanding Contract Terms for Residential Construction Projects and more Quizzes Introduction to Business Management in PDF only on Docsity! TERM 1 Contract Documents Identified DEFINITION 1 Exact terms of an agreement identified between parties, defines scope of work and price of the product, also allocates riskhave it in writing TERM 2 Time of Commencement DEFINITION 2 date at which work should beginshould be after date of execution of the contractnotice to proceed could make this flexible TERM 3 Substantial Completiong DEFINITION 3 Contract completion date should be expressed as a number of days from the notice to proceed and should be based on substantial completion should be clearly defined and should NOT be to the buyer's satisfaction TERM 4 Price, Deposit & Payment DEFINITION 4 includes cost of work, total price of the project and amount of the buyers deposit to be paid to the builder upon execution of the project go into specific detail of financing regarding mortgages, interest, etc. TERM 5 Costs to be Reimbursed DEFINITION 5 identify which cost is reimbursable builders must prove that the cost to be reimbursable were necessary TERM 6 Draw Schedules DEFINITION 6 A detailed payment plan for a construction project determines when the bank will disburse funds to you and the contractor TERM 7 Application for Progress Payment DEFINITION 7 may give the owner the right to withhold payments and may give the contractor the right to stop working TERM 8 Liquidated Damages & Unavoidable Delays DEFINITION 8 provides for payment of a predetermined amount of money in the even of a breach of contract Unavoidable delays can add time to schedule without liquidated damages resulting TERM 9 Financing & Other Contingencies DEFINITION 9 if there is a 3rd party financing, the builder may include financing commitment from a lender in the contract the contract should allocate payment of loan application fees and closing costs between the buyer and the builder any other contingencies that the parties contemplate should be specifically identified TERM 10 Allowances DEFINITION 10 accounts for a large part of the project ex. carpets, fixtures, landscape problem: owner goes over allowance and cannot pay the amount they exceeded it by