MN General Contractor flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Gross profit

Revenue minus direct job costs such as labor, materials, subcontracts, and equipment; it excludes general overhead and taxes.

Gross margin percentage

Gross profit divided by revenue, expressed as a percentage; it measures how much of each revenue dollar remains after direct job costs.

Markup

Gross profit divided by direct job cost, expressed as a percentage; markup is always higher than gross margin for the same job.

Working capital

Current assets minus current liabilities; positive working capital indicates ability to fund near-term operating costs and job expenses.

Current ratio

Current assets divided by current liabilities; a ratio below 1.0 means current liabilities exceed current assets available to pay them.

Break-even revenue

Fixed overhead divided by gross margin percentage; it is the sales volume at which gross profit exactly covers fixed overhead.

Retainage

Portion of progress payment withheld by the owner until contract conditions are met; it reduces contractor cash flow and must be tracked separately.

Minnesota materials sales tax

Minnesota generally treats contractors as consumers of materials they install, so contractors pay sales tax on those materials rather than charging tax on construction labor.

Minnesota Residential Code

Adopted state code for one- and two-family dwellings and townhouses; it is based on the IRC with Minnesota amendments and governs permits and inspections.

Frost depth footing

Footings must extend below the local frost line so soil freezing does not lift the foundation; required depth varies by Minnesota location.

Emergency escape opening

Basement and sleeping-room window required for rescue; minimum 5.7 square feet clear, 24 inches high, 20 inches wide, sill no more than 44 inches high.

Stair riser and tread

Maximum riser height is 7.75 inches and minimum tread depth is 10 inches for conventional residential stairs under the adopted code.

Guard height

Required guard at open sides and decks is at least 36 inches high in residential construction, with openings that reject a 4-inch sphere.

Smoke alarm locations

Smoke alarms are required in each sleeping room, outside sleeping areas, and on each story; interconnection and power source rules depend on code edition.

Building permit inspection sequence

Typical inspections occur at foundation, framing, rough-in, and final; concealed work must be approved before it is covered.

Wall bracing

Structural method using sheathing and framing to resist lateral loads; it must follow approved plans and code-prescribed bracing amounts.

Contract consideration

Something of value exchanged by each party, such as payment for construction services; without consideration, a contract may not be enforceable.

Statute of Frauds

Minnesota rule requiring certain agreements, including land sales and contracts not performable within one year, to be in writing and signed.

Pre-lien notice

Written notice that may be required from certain contractors and suppliers to preserve mechanic’s lien rights; timing and content are set by statute.

Mechanic’s lien statement

Document recorded against property to claim unpaid construction work; Minnesota generally requires recording within 120 days after last furnishing.

Lien foreclosure deadline

A mechanic’s lien generally must be foreclosed by lawsuit within one year after the lien statement is recorded; missing it can void the lien.

Conditional lien waiver

Waiver that becomes effective only when the stated payment is received; it protects the claimant if the check does not clear.

Substantial completion

Stage when work is sufficiently complete for intended use, triggering the punch list, warranty start, and often retainage release.

Request for information

Formal project document asking the designer to clarify plans or specifications; responses must be logged and distributed to affected parties.

Fall protection trigger

OSHA requires fall protection in construction at 6 feet or more above a lower level, using guardrails, nets, or personal fall arrest.

Ladder setup rule

Portable ladder should be set at a 4:1 angle and extend at least 3 feet above the landing, with top and bottom secured.

Excavation protective system

Trenches 5 feet or deeper require a protective system such as sloping, shoring, or shielding unless made in stable rock.

Spoil pile setback

Excavated soil and equipment must be kept at least 2 feet from the trench edge to reduce collapse risk.

Scaffold fall protection

Scaffold work at 10 feet or more requires guardrails or personal fall arrest; top rails are typically 38 to 45 inches high.

Hazard Communication Standard

OSHA rule requiring chemical labels, safety data sheets, and employee training so workers understand hazards of materials on site.

Stormwater construction permit

NPDES permit required when construction disturbs one acre or more; it requires a SWPPP with erosion and sediment controls.

Minnesota workers compensation

Minnesota employers must carry workers’ compensation insurance for employees; misclassifying employees as independent contractors can create liability.