What Are Examples Of Some Of Standard Construction Contracts Available For Construction Projects?
There are several organizations that have created standard form contracts, which contractors, owners, architects, and other construction professionals can use to fit their needs. The most prominent of these standard contract creators is the American Institute of Architects (AIA), which has developed a series of standard form contracts that address nearly any kind of project that a construction or design professional may be involved in. There are contracts between owners and contractors, including standard Owner-Contractor agreements, as Design-Build contracts, where the general contractor is not only the builder but is also involved in design services. There are also contracts for Project Management, where the contractor may not be doing the actual construction but is overseeing the construction process.
The AIA also has agreements for contractors to use with their sub-contractors and for owners to use with architects, engineers, surveyors, and other design or technical professionals. There are contracts that contain specific terms that would be applicable to green or sustainable projects. There are agreements that apply to joint ventures. There is a standard form contract out there for just about any situation that a contractor might find himself in. Importantly, the AIA is not the only organization that provides standard form contracts to its subscribers or members. Construction Professionals can also obtain these types of contracts from ConsensusDocs, the Design-Build Institute of America, and others. Each organization has a unique approach to the form contracts, so it is important for a contractor or developer to find the one that best matches its needs.
What Are The Advantages Of The AIA Or Other Standard Contracts?
There are two primary advantages of the AIA contracts. First, they have been around for a long time, so they are readily understood by those who have dealt with them before. This understanding comes not only from using them repeatedly, but also from the lawsuits that have arisen between parties to these contracts, which allows the courts to clarify the meaning or application of certain language in the contracts, which in turn provides construction professionals and their attorneys the guidance to know how that term is likely to be interpreted in the future.
In addition, the AIA contracts are comprehensive and cover just about any situation that might arise in a construction project. However, those two factors that are advantages on some projects might end up being disadvantages on another project. For example, for a contractor who’s never dealt with the AIA contract before, it is not particularly helpful to know that there are decades of history that went into the exact wording used in the contract. They simply won’t have the understanding that comes from having used the same form contract over and over again. In fact, this comprehensiveness found in the AIA contracts can be overwhelming and confusing to someone who has not used those contracts before.
To understand why the comprehensiveness of the AIA contracts can be both an advantage and a disadvantage, it is important to understand that it is not uncommon for an AIA contract to include a 15 to 20 page primary contact, which is supplemented by a 40 page general conditions document which is considered part of the contract even though it is a separate document. For a contractor working with such a contract for the first time, it can be intimidating and the very length of the contract makes it likely that they will miss some key contract term. This is why it is important for contractors, developers, and other construction professionals to work with an experienced construction attorney to help them understand what they are getting into, point out any potential pitfalls, and be ready to advise them through the process.
Are AIA Contracts Drafted From Scratch Or Are They Pre-Existing? Why Is This An Advantage When Issues Arise?
Architects and their trade organization, the American Institute of Architects, saw that there was a need for uniformity and predictability in construction contracts. When the AIA first put these contracts together, it was meant to address the needs that were brought to its attention by its members (the working architects) and by its members’ clients (property owners and developers). Today, these standard contracts have been around for decades, and every few years, the AIA will review and amend the contracts, so that loopholes, ambiguous terms, or other deficiencies can be revised or removed, and to address the changing realities of the construction industry.
Architects have a role in the construction process because not only do they design buildings and other projects, but they are often involved in the administration of the project as well. In those cases, they are retained by the owner to represent the owner’s interest throughout the construction process. These responsibilities can vary from project to project, but will likely include inspecting the project to monitor progress and quality, reviewing and approving payment requests received from the contractor, and acting as an initial decision maker when there is a dispute between the owner and contractor.
The advantage of using a pre-existing contract that they’ve been working on for so long and have tweaked and revised over the years, is that almost all the rights and responsibilities of the parties have been meticulously laid out and explained. There are decades of history behind it and many of the terms have been edited to make sure that they are as clear and as concise as they can be.
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