Utah Contractor Practice Exam

In construction contracts, particularly for public works or larger projects that involve architects, retention is often a common practice. Retention refers to a portion of payment that is withheld until the completion of a project to ensure that the work is completed satisfactorily and to cover any potential claims or issues that may arise. The correct answer indicates that retention is typically 10% of the first draw. This means that when payments are disbursed for the initial work completed, a percentage is held back from that payment. This practice helps ensure that contractors have an incentive to complete the job well, as they will receive the withheld amount upon satisfactory completion. Holding a percentage of the first draw rather than the total job price allows for a more flexible approach to retention. It minimizes the risk for both parties by facilitating cash flow while still ensuring accountability. In contrast, the other percentages and approaches listed would not align with common practices in such contracts involving architects and public works. This approach reflects standard industry norms, fostering a balance between effective project funding and completed work quality.