Contract Formation and Provisional Sums

Which of the following correctly identifies the three major elements of a properly formed contract?

• Offer, Acceptance, Money

• Offer, Expectance, Consideration

• Offal, Acceptance, Consider

• Offer, Acceptance, Consideration

What does the term 'to have capacity' mean when referring to someone who enters into a contract?

• That they must have the money to pay for the work

• That they must already own the land for the building to be constructed on

• That they must be of sound mind and of a legal age to enter into a legally binding contract

• That they must be qualified to construct a building

An express term in a contract is ...

• One that is written into the contract at the last minute

• one that only exists because it is the normal way of doing business for that industry

• one that clearly sets out exactly what the parties to the contract can and cannot do

• one that states who the parties to the contract are

An example of an invitation to treat might be:

• a receipt for payment

• an item on a shop shelf

• a chocolate bar with a sign saying 'eat me' on it

• a response to a tender document

What is the effect of a counter-offer on the original offer?

• to make it null and void

• to make it a wider offer to be considered under the contract negotiations

• to make the original offer legally binding

The acceptance must mirror the offer. What does this statement mean?

• That whatever is set out in the offer must be agreed to by all parties

• That the acceptance must reflect all the main points in the offer

• That the acceptance must reflect all the points in the offer

• That the offer cannot be negotiated

When communicating acceptance, if the client is silent (ie they don't respond to the offer) then the general rule is that they accept the offer.

• TRUE

• FALSE

A provisional sum is:

• A figure that cannot be altered in any way once it has been agreed

• An amount of money included in a contracted sum that will change once the full extent of the cost is known

• A cost for an item in a building that reflects how much it could be purchased for. It may be removed and replace with another item if the client wishes.

• A clause in the contract for something that may or may not happen

A Prime Cost (PC) sum is:

• A figure that cannot be altered in any way once it has been agreed

• An amount of money included in a contracted sum that will change once the full extent of the cost is known

• A cost for an item in a building that reflects how much it could be purchased for. It may be removed and replace with another item if the client wishes.

• A clause in the contract for something that may or may not happen

A provisional sum means that the final contract sum is likely to change.

• True

• False