Contracts & ExecutionQuestion 875 of 1605
A contractor's bid submitted to an owner is best characterized in contract terms as:
a.An accepted contract that binds the owner immediately
b.A warranty of habitability
c.A liquidated damages clause
d.An offer that the owner may accept, reject, or that may lapse or be revoked under applicable rules
Explanation
A contractor's bid is generally an offer to perform the described work for the stated price; a binding contract forms only when the owner accepts it. Until acceptance, the owner may reject it, the offer may lapse after a stated or reasonable time, and it may be revocable, subject to any statutory or bid-bond limits that keep public bids open. A bid is not itself an accepted contract, a damages clause, or a warranty.
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Related questions on this topic
- 'Frustration of purpose' as an excuse for nonperformance applies when:
- A third-party beneficiary who is an 'intended beneficiary' of a contract:
- An 'incidental beneficiary' of a contract differs from an intended beneficiary in that an incidental beneficiary:
- 'Promissory estoppel' may allow enforcement of a promise, even without traditional consideration, when:
- A general contractor uses a subcontractor's bid to prepare and win the prime contract, reasonably relying on that bid. If the sub then tries to withdraw the bid, the general may argue the sub is bound under:
- A 'retention' (retainage) provision in a construction contract generally allows the owner to:
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Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)