Chapter 7
With Chapter 7 begins Part B of the book, titled “The Main Actors: The Owner,
1. The chapter begins with a discussion of the owner (Section 7.2)—the prime
mover behind a construction project. Ask the students: How is the owner’s
sophistication likely to impact on the success of a construction project?
2. A review of the question “who has authority to speak for the owner or to
4. A thorough knowledge of the prime contractor (Section 7.4) is crucial to
understanding the remainder of the book. If nothing else, courts are most familiar
5. This chapter treats the CM (Section 7.5) on par with the prime contractor.
Although students are probably familiar with construction management, this is
certainly the place to compare and contrast a prime contractor with both a CM at–
risk and a CM as–agent. What are the advantages and disadvantages? What
type of owner would function better with each type of CM? Using the same
6. The role of lenders (Section 7.6) should not be skipped. A basic
understanding of the financing of a construction project and the role of the lender
Answers to Chapter Questions
1.) Every construction project involves which three elements?
(3) implementation of that design through the services of a constructor.
2.) What are the major types of owners and what are the legal consequences of those
differences?
3.) What are the four different situations that may occur that would allow a contractor
to not bear the risk of unforeseen subsurface conditions?
4.) What are the primary reasons for the development of Construction Management?
5.) Explain the primary differences between the CM as Agent or Advisor (CMa) and the
CM as Constructor (CMc) delivery methods.
a. The CMa contracts only with the owner and has no contract relationship
6.) What are the consequences to a CMc of agreeing to a guaranteed maximum price
(GMP)?
7.) What are the three matters that overlap between the CMa’s and architect’s
responsibilities that are of great importance to the contractor?
8.) In the case Hoida, Inc. v. M&I Midstate Bank, what did the court rule in regard to the
subcontractors claim that a lender had a duty to shield them from the contractor’s
misconduct?
9.) What is the difference between a performance bond and a payment bond?
10.) What is the difference in how public projects and private projects are
funded?
