This set of Civil Engineering Drawing Multiple Choice Questions & Answers (MCQs) focuses on “Contract System”.
1. A voluntary arrangement between two or more parties that is enforceable by law as a binding legal agreement is known as __________
d) mutual fund
Explanation: A contract arises when the parties agree that there is an agreement. Formation of a contract generally requires an offer, acceptance, consideration, and a mutual intent to be bound. Each party to a contract must have capacity to enter the agreement. Minors, intoxicated persons, and those under a mental affliction may have insufficient capacity to enter a contract. Some types of contracts may require formalities, such as a memorialization in writing.
2. What is the type of mistake which occurs when only one party to a contract is mistaken as to the terms or subject-matter?
a) Mutual mistake
b) Unilateral mistake
c) Bilateral mistake
d) Individual mistake
Explanation: The courts will uphold such a contract unless it was determined that the non-mistaken party was aware of the mistake and tried to take advantage of the mistake. It is also possible for a contract to be void if there was a mistake in the identity of the contracting party. An example is in Lewis v. Avery where Lord Denning MR held that the contract can only be voided if the plaintiff can show that, at the time of agreement, the plaintiff believed the other party’s identity was of vital importance. A mere mistaken belief as to the credibility of the other party is not sufficient.
3. _______________ contract is one that has automatic renewals until one party requests termination.
Explanation: If these are left unattended, they can have significant cost impacts with little value. If these agreements won’t work for the company, the clauses stating the contract automatically renews should be removed. If the clause makes sense or cannot be taken out, alerts can still be set in a contract management platform as a reminder.
4. How are final contracts signed in modern business?
b) Document scanning
c) Thump impression
d) Shaking hands
Explanation: Electronic signatures, or e-Signatures, have become crucial for businesses as they seek to increase the speed of time-to-signature, e-Signatures are legally binding and have the same legal status as a written signature, as long as it fulfills the requirements of the regulation it was created under.
A contract management platform should include the ability to integrate with an e-Signature software, or include e-Signatures as part of the platform.
5. Which tender allows anyone to submit a tender to supply the goods or services that are required?
a) Framework tendering
b) Selective tendering
c) Open tendering
d) Close tendering
Explanation: On larger projects, there may then be a pre-qualification process that produces a short-list of suitable suppliers who will be invited to prepare tenders. This sort of pre-qualification process is not the same as selective tendering.
Open tendering has been criticised for attracting tenders / expressions of interest from large numbers of suppliers, some of whom may be entirely unsuitable for the contract and as a result it can waste a great deal of time, effort and money. However, open tendering offers the greatest competition and has the advantage of allowing new or emerging suppliers to try to secure work.
6. ________________ involves the preparation of tenders based on a typical or notional bill of quantities or schedule of works.
a) Framework tendering
b) Selective tendering
c) Negotiated tendering
d) Serial tendering
Explanation: The rates submitted can then be used to value works over a series of similar projects, often for a fixed period of time following which the tendering procedure may be repeated. Serial tendering can reduce tender costs, and may encourage suppliers to submit low rates to secure an ongoing program of work.
7. _______________ tendering is used when all the information necessary to calculate a realistic price is available when tendering commences.
Explanation: Single-stage tendering is the more traditional route, used when all the information necessary to calculate a realistic price is available when tendering commences:
• An invitation to tender is issued to prospective suppliers (perhaps following completion of a pre-qualification questionnaire and/or a pre-tender interview). The invitation to tender will include information describing the goods or services required in sufficient detail to enable prospective suppliers to prepare an accurate tender.
• Tenders are prepared and returned by prospective suppliers (this may involve questions and answers and a mid-tender interview to clarify the client’s requirements).
• Submitted tenders are then assessed and compared (this may involve further interviews).
• The preferred tenderer is selected and negotiations opened.
• Subject to the outcome of those negotiations the preferred tenderer may then be appointed.
8. An invitation to tender might not include?
a) Holiday packages
c) A letter of invitation to tender
d) Design drawing
Explanation: An invitation to tender might be issued for a range of contracts, including; equipment supply, the main construction contract (perhaps including design by the contractor), demolition, enabling works and so on.
An invitation to tender might include:
• A letter of invitation to tender.
• The form of tender.
• The form of contract.
• A tender pricing document.
• A drawing schedule.
• Design drawings.
9. Mutual mistake occurs when both parties of a contract are mistaken as to the terms.
Explanation: Each believes they are contracting to something different. Courts usually try to uphold such mistakes if a reasonable interpretation of the terms can be found. However, a contract based on a mutual mistake in judgment does not cause the contract to be voidable by the party that is adversely affected.
10. In Schedule contract the contractor undertakes the execution or construction of specific work with all its contingencies, to complete it in all respect within a specified time for a fixed amount.
Explanation: In lump sum contract the contractor undertakes the execution or construction of specific work with all its contingencies, to complete it in all respect within a specified time for a fixed amount. In this an owner agrees to pay a contractor a specified lump sum after the completion of work without a cost breakdown. After work no detailed measurements are required.
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