Page: 92 Difficulty: Moderate Skill: Applied Which of the following is good practice for an owner awarding a contract? Which of the following models for project delivery would be inappropriate for a single residence project?
If a call for tenders specifically requires that certain work be subcontracted out, and that the names of subcontractors that the contractor intends to use be given in the tender, why might a contractor intentionally omit the name of the subcontractor? What are the risks of doing this? Answer: A contractor may obtain quotes from the various subcontractors and then enter in a price for that item which is a bit lower than any of the quotes he has received from any of the subcontractors.
This will increase the likelihood of the contractor winning the job. Then, having obtained the job, the contractor is not bound to a particular subcontractor and can negotiate with the trades and get one of the subcontractors to meet the price he stated in the tender.
However, if the owner awards the contract to the bid-shopping contractor, the owner runs the risk of being sued by other bidders who consider the owner to have accepted a non-compliant bid. Pages: Difficulty: Difficult Skill: Applied An owner wants to implement a project which requires synergy between many different mechanical systems.
How suitable is the construction management model of project implementation for this situation? Answer: Under the construction management model, the owner enters into separate contracts with the various trade contractors. Unlike with the design-bid-build model, where there is a single contractor who is ultimately responsible for all work done on site, in the construction management model, each trade contractor is independently responsible to the owner.
In a project requiring synergy between different aspects of the project, it may be difficult to determine which trade contractor is responsible if the system fails to perform. Certainly, where more than one trade contractor is at fault which is usually the case , they will point fingers at each other and the owner will be caught in the middle of the blame game that results. Owners can increase price certainty in fixed-cost contracts by requiring the contractor to bear more risk.
Answer: True Page: Difficulty: Moderate Skill: Applied Comment: However, the contractor will charge a premium for bearing the additional risk, and the owner may be required to pay a large premium in comparison to the risk.
Why is the name of fixed-price contracts somewhat misleading? Answer: Under a fixed-price contract, the owner rarely pays just the fixed price. Typically, design changes or contractor claims result in price increases. The public-private partnership model is most similar to which other model? Which of the following is false regarding the issue of time under a contract? Page: Difficulty: Difficult Skill: Applied Which is the typical sequence in which dispute resolution options are tried?
A contractor who builds a house and then sells it to the first owner will generally not be contractually liable to the second owner of the property for defective construction. What is the key difference between obligations imposed under tort law compared to those imposed under contract law?
Answer: One cannot escape tort obligations, as they are imposed on all members of society. Contractual obligations, on the other hand, are entirely voluntary. Between which of the following parties is there clearly a duty of care for negligence?
To establish causation, the plaintiff must show that: a. Page: Difficulty: Moderate Skill: Applied Which of the following is a strict liability tort? What remedy will the court likely grant to B?
Trespass occurs whenever a person places their personal property on the land of another person. The traditional remedy for trespass is a court order stating that the party committing the trespass A must cease doing so by a stated time.
However, public policy requires that courts should not make orders that will be expensive to implement, but which result in little benefit. In this case, B owns a farm which is likely large in size. Ordering A to move his fence 5 cm will be of little benefit to B. Although mistake is not a defence to trespass, the court will consider it when deciding on what remedy to order.
An employment contract could contain an exclusion clause that prevents the employer from recovering from the employee damages the employer has to pay under the doctrine of vicarious liability. What is the name of the limitation period that will bar a claim for a latent defect found 80 years after a building was constructed?
Answer: The ultimate limitation period. A patent defect is one which: a. In which of the following relationships is there vicarious liability? Upon being issued a demand for documents, a party must produce all relevant documents. What is the purpose of the pleadings in a lawsuit? Answer: The pleadings define the issues to be decided by the court. What name is given to the process whereby the parties agree to arbitrate after the dispute has arisen, and agree that the arbitrator will make a final decision?
Which of the following is not true regarding experts? Explain the potential conflict of interest experts face when testifying at trial. What mechanisms are implemented to mitigate this conflict and ensure objective expert testimony?
Answer: When experts testify at trial, they are paid to do so by one of the parties. The conflict of interest arises because the expert is ethically obliged to give a neutral opinion, but knows that they will not be paid to give an opinion at all unless it supports the case of the party who hired them. Thus, experts may be inclined to tailor an opinion to suit a particular viewpoint.
In an attempt to control this conflict, expert witness compensation is not allowed to be contingent on the outcome of the case. However, there is no bar against agreeing to pay expert witnesses a substantial fee. In any case, if an expert does not give objective and reasonable evidence, this will be revealed through cross-examination and by conflicting expert testimony.
Supervision connotes a greater degree of involvement during the construction process than inspection. In what circumstances might a professional be liable because her design is not perfect? Answer: When the professional represented to the owner that her design would be perfect. Which of the following is the most common cause of client dissatisfaction?
Keeping clients informed and ensuring they understand the challenges of the project is the key to satisfaction. Operating though a corporation will not protect a professional against claims for personal negligence. All insurance policies impose on the insurer the duty to defend and the duty to indemnify when the claim is within coverage.
Answer: False Page: Difficulty: Moderate Skill: Applied Comment: Some insurance policies are designed to simply cover the costs of defending claims. What is an insurance deductible?
Answer: The deductible is the minimum portion of the cost of the claim that the insured must pay before the insurer will cover the rest of the claim. For what tactical reason may a professional choose to not have insurance?
Answer: If it is known that the professional is not insured, there is less chance that they will be sued. Which of the following is true regarding insurance contracts? In what sense are both the insured and the insurer under a duty of good faith in insurance contracts?
Answer: When the insurance contract is being entered into, the insured is under a duty of good faith to disclose all material information. This duty of good faith is imposed partly because the insured is in a position of power relative to the insurer i.
When a claim is made, the insurer is under a duty of good faith to defend the claim and compensate if the claim is within coverage. At this stage the insurer has a large amount of power because he understands better than the insured what the likelihood of success for the claim is. Furthermore, the insured is vulnerable because he likely has insufficient capital to cover the claim, and reputation is at stake if the claim is not paid.
Like labour and material payment bonds, lien bonds are put in place at the start of the contract. What steps should the obligee under a surety bond take regarding the safekeeping of documentation? Answer: The obligee should ensure that she retains the original copy of the surety document. The bond will be unenforceable unless the obligee has the original bond document. Which of the following is a course of action a surety under a performance bond could take upon being notified by the owner of a default by the contractor?
Which of the following may be a defence available to a surety who does not want to pay out under a performance bond? If the contractor is financially strong, and files a letter of credit with the owner stating that she will have no difficulty in paying subcontractors, she need not comply with the lien legislation trust provisions.
Answer: False Page: Difficulty: Difficult Skill: Applied Comment: All contractors must comply with the trust provisions regardless of their financial strength. Why can it be said that contractors are in the business of granting credit? Answer: The payment scheme used in construction contracts is generally that the contractor does the work, the work is certified, and then payment is made. Thus, the contractor provides the goods and services before being paid and is therefore effectively granting the owner credit.
How does one perfect a lien? Contractor A employed two subcontractors, B and C. Assuming there are no other liens on the project, the holdback amount is correct and the liens are proven, how much will C recover from the holdback?
Why might a multiple holdback system result in practice even if the legislation only requires a single holdback system? Answer: Under a single holdback system only the owner is required by statute to hold back money from the prime contractor. Under a multiple holdback system all contractors and subcontractors are required to hold back money from those below them on the construction chain. Under a single holdback system, if the prime contractor did not hold back money from the subcontractor after being paid by the owner, the prime contractor may have to pay out more than was received from the owner to that point.
For similar reasons, holdbacks will be agreed upon down the construction chain, and the result will be a multiple holdback system. The measured mile approach is suitable for analyzing jobs involving many short tasks all quite different in nature. Answer: False Page: Difficulty: Difficult Skill: Applied Comment: With such a project it is difficult to use productivity on one task to predict productivity for another.
The measured mile approach is better for jobs involving few tasks, which each extend for a long period of time. How are critical path activities defined? Answer: Critical path activities are those for which any delay will cause an equal delay to the project completion.
What is the common feature of all activities on the critical path? Two critical path activities can take place at the same time, but at least part of the earlier one must be finished before any part of the later one can be started. Which head of damage is generally most difficult to prove?
Labour law is consistent throughout Canada. What feature of the relationship between employers and employees led to the development of unions? Answer: The inequality of bargaining power that makes a single employee unable to bargain effectively against a large employer. In what context will it likely be most difficult to effectively organize workers into a union?
Which of the following will release the purchaser of a business from the obligations under the existing collective bargaining agreement? All of the circumstances must be considered. Generally employers have the right to sue employees for the mistakes they make that result in the employer having to pay damages to a third party.
What test do courts apply to determine whether information is confidential? Answer: If the information would be valuable to a competitor business, then it will likely be confidential. However, the mutual understanding of the parties when exchanging that information is also relevant.
Which of the following will likely constitute just cause warranting dismissal? What aspect of the employment standards dispute process is most different to litigating in court? This is different from the court system where the plaintiff must pursue the defendant to recover judgment. An employee was clearly wrongfully terminated by an employer, and then tried in vain for over a year to find a new job. Answer: The first issue is limitation periods.
Employment standards legislation typically sets short notice periods, and if the employee waited a year to make the claim, she may well have missed the limitation period. The limitation period to bring a court action will be longer e. The second issue is quantum of damages.
The damages the court would order under the common law will likely be more generous than the amount that would be payable under the employment standards legislation.
The third issue is jurisdiction. The employment contract, or the legislation, may require the dispute to be resolved by the employment standards branch, and not in court. The fourth issue is recoverability. The government assists with recovery of claims under the employment standards legislation, but not with recovery of court judgments. Compliance with the general provincial occupational health and safety legislation is always enough to avoid contract and tort liability. Furthermore, in unusually dangerous circumstances, tort duties may require more than mere compliance with the minimum standards set by the occupational health and safety legislation that is of general application.
Engineers, architects, or contractors who fail to meet the stricter standards may be liable to the owner if accidents occur and cause damage to property. Answer: Workers must give up the right to sue their employer in tort or contract for causing their injuries. What actions may be appropriate for a professional engineer to take if an owner requests the engineer to certify work which the owner and the engineer agree does not comply with the building code? Where federal and provincial statutes both deal with the same issue, the federal legislation will always apply and the provincial one will not.
If they do conflict, the federal legislation will prevail. What is the difference between an environmental site assessment and an environmental audit?
Answer: Environmental site assessments investigate and deal with pollution on a site, while environmental audits review a company's performance to determine compliance with environmental regulations. Who may pass laws relating to acceptable standards of land contamination?
The provincial government can set standards for provincial land, or delegate the authority to municipalities to do so. What type of environmental assessment would likely be required for a pipeline project that will cut through First Nations land and will disrupt the migratory path of three species of nearly extinct animals?
It is prudent, but not mandatory, for private parties to consult with aboriginal people affected by a project before commencing the project. If an owner wants to contract with an aboriginal contractor, but the contractor cannot get bonded, what precaution might the owner take to reduce the harm associated with default by that contractor?
Answer: The owner could insist on an increased holdback. Because the securities guidelines issued by the Canadian Securities Administrators CSA do not create a cause of action for inadequate reporting, they are not relevant when claims of misrepresentation are made.
In the context of securities regulation, what is the purpose of a prospectus? Answer: The prospectus provides financial information to investors so they can make an informed decision on whether or not to invest. An organization will not likely be liable for disclosure of personal information if that information is already publicly available. What does it take to obtain significant measurement results in thermographic examinations?
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