Define a Bid Bond and during what period can a contractor wi

Define a Bid Bond and during what period can a contractor withdraw the bid without penalty? 1. l LLC 2. If the leasing agreement between the owner South Street developers Urban Renewa & St. Justine preschool was $24.00/sqft per year rental fee and the pre-school was 13,167sqft what would be a legally acceptable liquidated damages per day be: Assume 30 days/month 3. Circle three ways that a construction contract can be terminated: A- Mutual Agreement B- A fist fight C- Successful completion of the contract D- A duel to the death owner to choose the weapons E- Default (either side) 4. Define what a negotiated contract is and which of the fee structures below are common: A- B- Cost +percent of cost Cost +fixed fee CCt flsoft tarig clas E- All of the above

Solution

1. A bid bond is a type of surety bond which is a three party agreement comprising a surety ( company backing ), the principal (contractor) and the obligee ( owner). abid bond is in place when contractor submits project bid and is taken so that if bid is awarded to contractor he does the job in same price as quoted in bid and under same conditions. If the contractor withdraws the bid before opening of the bid then then bid security is received on the withdrawl date and after opening of the bid within 90 days bid security can be received without penalty.

2. Rental fee = $ 24/ sqft per year

Area of school= 13167 sqft

Rent of school per year=13167*24= $316008

If there are 30 days in month, then number of days in year= 360 days

one day rent of school= 316008/360= $877.8

Liquidity damage is a fixed cost decided during the contract which are calculated on the basis of losses.

So, in the above case loss is only of the per day rent thus liquidity damages per day should be $ 877.8 and interest on this amount.

Total liquidty damages is $878.

3. Three ways a construction contract can be terminated are

a) successfull completion of contract as the work is done

b) a duel to death owner to choose weapon as it is a breach.

c) Mutual agreement both parties can terminate contract on mutual understanding

4.) Negotited contract is a type of contract awarded on basis of direct agreement without going through bidding process. It is direct contract between contract and client.Generally contractor and client that have experience of working together and have a relationship built on trust.

Cost + percent of cost type fee structure is adopted for negotiated contract because design documents are generally not preapred at negotiation stage and lum sum value is decided on base of experience and previous similar works.

Note: Only experienced contractor can work in negotiated contract.