Bonds, Insurance & Legal Terms Flashcards Preview

ARE Decks > Bonds, Insurance & Legal Terms > Flashcards

Flashcards in Bonds, Insurance & Legal Terms Deck (18)
Loading flashcards...
1
Q

Payment bond

A

A bond secured by the General Contractor which guarantees that the Owner will not pay twice for labor and materials.

2
Q

Bond (Surety Bond)

A

An agreement under which on party (the surety or bonding company) guarantees to make good to another party (the oblige or owner) the debt, default, or failure to perform of a third party (the principal or contractor).

3
Q

Completion Bond

A

A bond obtained by the contractor or owner, which guarantees that the project will be completed free of liens.

4
Q

Performance Bond

A

A bond, secured by the General Contractor, which guarantees that the project will be completed. • A type of surety obtained by the contractor. • It is for the protection of the owner and is used to help ensure that the work will be completed in accordance with the contract documents.

5
Q

Bid Bond

A

• A bond, secured by the bidder, which guarantees that the Owner will contract for the project for the bid proce as noted in the accepted bid.

6
Q

Labor and Material Payment Bond

A

• Who Gets it > Contractor • Who it Pays > Subcontractors • Who it Protects > Owner • A bond acquired by the contractor in which the contractor and the contractor’s surety guarantee to pay their subcontractors and to purchase materials for the construction. • The purpose of the Labor and Material Payment Bond, is to protect the owner from claims made for unpaid contractor’s bills after final payment has been made, and to, provide a means to discharge liens that are files after the completion of the project. • AIA Document A312

7
Q

Affidavit

A

A written statement of facts voluntarily made by an affiant under an oath or affirmation administered by a person authorized to do so by law.

8
Q

Lien

A

A legal clain by a party against another party for satisfactionh of a monetaqry claim.

9
Q

Surety

A

• A written promise or bond by a person or entity who guarantees the performance of an obligation of another party. • It can protect an owner’s interest by ensuring that the contractor fulfills the requirements of the contract documents.

10
Q

Errors and omissions insurance

A

Insurance obtained by the Architect as protection against errors and omissions in the preparation of the Contract Documents.

11
Q

Builder’s Risk Insurance

A

A specialized form of property insurance that provides coverage for loss or damage to the work during the course of construction.

12
Q

Bonus and Penalty Clause

A

A provision in the construction contract for payment of bonus to the contractor for completing the project prior to a specific date , and for a charge (penalty) against the contractor for failing to complete the project by that date.

13
Q

Incentive Clause

A

Clause in a cost plus fee contract between the owner and the contractor in which the savings between the guaranteed maximum cost and the actual project cost are proportionally shared.

14
Q

Letter of intent

A

A letter signifying intention to enter into a formal agreement and setting forth the general terms thereof.

15
Q

Liquidated Damages

A

A sum chargeable against the contractor as reimbursed for damages suffered by the owner because of the contractor’s failure to complete the work within a specified time.

16
Q

Professional Liability Insurance (Errors and Omissions Insurance)

A

Insurance that financially protects an architect against claims for damages resulting from professional negligence.

17
Q

Eminent Domain

A

The right of the government to take private property for public use, with the owner receiving fair compensation

18
Q

Discount

A

(Loan Placement Charge / Origination Fee / “Points”) That portion of a construction loan that must be paid to the lender for the privilege of borrowing the money.