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The Construction Specifications Institute

Audio Presentation

Bonus SessionAIA DOCUMENT A201-2007

GENERAL CONDITIONS OF THECONTRACT FOR CONSTRUCTION

Project DeliveryEducation Program

Construction Document Technology (CDT)Preparatory Course

2011

1www.csinet.org

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© The Construction Specifications Institute 2011

The Construction Specifications Institute is a Registered Provider with The American Institute of Architects Continuing Education Systems. Credit earned on completion of this program will be reported to CES Records for AIA members. Certificates of Completion for non-AIA members available on request.

This program is registered with the AIA/CES for continuing professional education. As such, it does not include content that may be deemed or construed to be an approval or endorsement by the AIA of any material of construction or any method or manner of handling, using, distributing, or dealing in any material or product. Questions related to specific materials, methods, and services will be addressed at the conclusion of this presentation.

AIA

2

Standard General Conditions by Professional Organizations

• This bonus session is based on AIA (American Institute of Architects) Document A201-2007 General Conditions of the Contract for Construction

• Other standard general conditions by other professional organizations include the following– EJCDC (Engineers Joint Contract Document Committee) Document C-

700 Standard General Conditions of the Construction Contract – AGC (Associated General Contractors of America) ConsensusDOCS

Document 200 Agreement and General Conditions Between Owner and Contractor

3Conditions of the Contract


General Conditions Comparison

A201 C-700 200• General Provisions• Owner• Contractor• Architect• Subcontractors•Construction by Owner or by Separate Contractors• Changes in the Work• Time• Payments and Completion• Protection of Persons and Property• Insurance and Bonds• Uncovering and Correction of Work• Miscellaneous Provisions•Termination or Suspension of the Contract• Claims and Disputes

• Definitions and Terminology• Preliminary Matters• Contract Documents: …• Availability of Lands; …• Bonds and Insurance• Contractor’s Responsibilities• Other Work at the Site• Owner’s Responsibilities• Engineer’s Status During Construction• Changes in the Work; Claims• Cost of the Work; …• Change of Contract Price and Time• Tests and Inspections; …• Payments and Completion• Suspension and Termination • Dispute Resolution• Miscellaneous

• Agreement• General Provisions• Contractor’s Responsibilities• Owner’s Responsibilities• Subcontracts• Contract Time• Contract Price• Changes• Payment•Indemnity, Insurance, Waivers and Bonds• Suspension, Cure, Termination • Dispute Resolution• Miscellaneous• Contract Documents


General Conditions Comparison• AIA and EJCDC Documents

– Separate and supplemental to Agreement– High page count AIA-39 + EJCDC-62– Design professional is “visible”– AIA subscription / EJCDC download

• AGC ConsensusDOCS– Integrated Agreement– Low page count – 35, more concise– Design professional is not “visible” as much– Subscription

AIA A201 Conditions of the ContractTable of Articles

1. General Provisions2. Owner3. Contractor4. Architect5. Subcontractors6. Construction by Owner

or by Separate Contractors

7. Changes in the Work8. Time

6Conditions of the Contract

9. Payments and Completion

10. Protection of Persons and Property

11. Insurance and Bonds12. Uncovering and

Correction of Work13. Miscellaneous

Provisions14. Termination or

Suspension of the Contract

15. Claims and Disputes

Conditions of the Contract• Defines basic rights,

responsibilities, and relationships of parties involved in performance of Contract

• Inherent part of Owner-Contractor Agreement

Project Delivery Practice Guide: 11.5.4.2 7


ARTICLE 1GENERAL PROVISIONS

8

Basic Definitions• The Contract Documents

– Enumerated in Owner-Contractor Agreement• Agreement• Conditions of the Contract• Drawings• Specifications• Addenda• Other documents listed• Modification

– Modifications• Written amendment • Change order• Construction change directive• Written order for a minor change

9Conditions of the Contract: 1.1

Basic Definitions• The Contract

– Agreement between the parties

– Not an agreement with certain other parties

• The Work– Construction and services

required by Contract Documents

– Labor, materials, equipment and services to fulfill Contractor’s obligations

– Whole or part of Project


Basic Definitions• The Project

– Total construction of Work performed under Contract Documents in whole or part

– May include construction by Owner and separate Contractors


Basic Definitions• The Drawings

– Graphic and pictorial portions of Contract Documents– Shows design, location and dimensions of Work

• The Specifications– Written requirements for materials, equipment, systems, standards and

workmanship for Work

• Instruments of Service– Representations of creative work by Architect and consultants– Studies, surveys, models, sketches, drawings, specifications, and

similar materials

• Initial Decision Maker– Person identified to render decisions on claims and terminations

Commentary: Previous editions did not useinitial decision maker – Architect was thedecision maker 12

Conditions of the Contract: 1.1

Intent of Contract Documents• Contract Documents to include items necessary for

execution and completion of Work by Contractor• Contract Documents are complementary• Performance by Contractor required only to extent of

Contract Documents and reasonably inferable


Ownership of Instruments of Service• Architect and consultants deemed author and owners of

respective instruments of service • The Following are authorized to use instruments of service

exclusively for execution of Work, but does not own or can claim a copyright– Contractor– Subcontractors– Sub-subcontractors– Material or equipment suppliers



ARTICLE 2OWNER

15

General• Owner is a person or entity identified in Agreement• Designated representative has express authority to bind

Owner to matters requiring approval or authorization• If requested by Contractor, furnish statement of record legal

title to property (site) for Contractor’s mechanic’s lien rights


Information and Services Required of the Owner

• If requested by Contractor, furnish reasonable evidence of financial arrangements to fulfill obligations

• Secure and pay for approvals, easements, assessments and charges (Contractor responsible for permits and fees designated by Contractor Documents)


• Furnish survey describing physical characteristics, legal limitations, utility locations, and legal description

• Furnish information or services designated by Contractor Documents

Owner’s Right to Stop the Work• Can issue written order

to Contractor to stop the Work if Contractor – Fails to correct Work not in

accordance with Contract Documents

– Repeatedly fails to carry out the Work in accordance with Contract Documents

• Has no duty to stop the Work for benefit of others


Owner’s Right to Carry out the Work• Can correct deficiencies in the Work if Contractor

– Defaults – Neglects to carry out Work in accordance with Contract Documents– Fails to commence and continue correction of such default or neglect



ARTICLE 3CONTRACTOR

20

General• Contractor is a person or entity identified in Agreement• Designated representative has express authority to bind

Contractor to matters under Contract• Perform Work in accordance with Contract Documents• Not relieved of obligations

– Tests and inspections or approvals performed by others– Architect’s administration of Contract


Review of Contract Documents andField Conditions by Contractor

• Execution of Contract represents Contractor– Has visited site– Become generally familiar with local

conditions– Correlated observations with Contract

Documents

• Before starting Work, Contractor shall– Study and compare various Contract

Documents– Take field measurements of existing

conditions– Observe any conditions at site affecting Work


Supervision and ConstructionProcedures

• Contractor shall supervise and direct Work using best sill and attention

• Solely responsible for, and have control over, following construction activities (even if Contract Documents include instructions for following activities, Contractor obligated to evaluate jobsite safety)– Means– Methods– Techniques– Sequences – Procedures – Coordination


Supervision and ConstructionProcedures

• Contractor responsible to Owner for acts and omissions of Contractor

• Contractor responsible for inspection of Work already performed for proper condition to receive subsequent Work


Labor and Materials• Contractor provides and pays for following for proper

execution and completion of the Work– Labor– Materials– Equipment– Tools– Construction equipment– Water – Heat– Utilities– Transportation– Other facilities and services


Labor and Materials• Contractor may make substitutions

– Only with consent of Owner– After evaluation by Architect– In accordance with

• Change order• Construction change directive

• Contractor shall – Enforce strict discipline and good order

among employees and persons carrying out Work

– Not employ unfit persons or persons not properly skilled


Warranty• Contractor warrants to Owner and Architect that materials and

equipment furnished– Will be of good quality and new – Will conform to Contract Documents– Will be free from defects

• Work not conforming to Contractor’s warranty may be considered defective

Commentary: Contractor does not warrant adequacy ofContract Documents


Permits, Fees, Notices, and Compliance with Laws

• Contractor shall secure and pay for– Building permit– Other permits– Fees– Licenses– Inspections by government agencies

• If Contractor performs Work contrary to following, Contractor assumes responsibility and bears cost for correction– Laws– Statutes– Ordinances


– Codes– Rules and regulations– Lawful orders of public

authorities

Permits, Fees, Notices, and Compliance with Laws

• Contractor to provide notice to Owner and Architect if following conditions encountered– Subsurface or concealed differences that differ from Contract Documents– Unknown physical conditions of an unusual nature that differ from those

ordinarily found to exist


Allowances• Costs included in Allowance

– Cost of material and equipment delivered to site– Taxes, less trade discounts

• Costs included in Contract Sum– Unloading and handling at site– Labor– Installation– Overhead– Profit – Other expenses

• Cost differences adjusted by change order


Superintendent• Contractor shall employ

competent superintendent and assistants– In attendance at Project site

during performance of Work– That represents the Contractor– Communications are binding

as if given to Contractor– Owner and Architect has no

reasonable objection– Cannot be changed without

Owner’s consent


Contractor’s Construction Schedule• Contractor shall submit construction schedule for the Work

– Shall not exceed Contract Documents time limits– Revised at appropriate intervals– Related to entire Project and extent required by Contract Documents– Shall provide for expeditious and practicable execution of the Work

• Contractor shall submit submittal schedule


– Coordinated with construction schedule

– Allow Architect reasonable time to review

Documents and Samples at the Site• Contractor shall maintain following at Project site in good

order and marked currently to indicated field changes and selections made during construction– Drawings– Specifications– Addenda– Change orders – Other modifications– Shop drawings– Product data– Samples– Similar required submittals


Shop Drawings, Product Data and Samples

• Terms defined• Shop drawings, product data,

samples and similar submittals are not Contract Documents

• Purpose is to demonstrate way Contractor proposes to conform with information given and design concept expressed in Contract Documents

• Submittals not required by Contract Documents may be returned by Architect without action



• Contractor shall review submittals for compliance with Contract Documents, approve, and submit to Architect

• By submitting submittals, Contractor represents to Owner and Architect that Contractor has– Reviewed and approved them– Determined and verified materials, field measurements and field

construction criteria– Has checked and coordinated submittal information with requirements of

the Work and Contract Documents

• Contractor shall perform no Work until respective submittals have been approved by Architect



• Work shall be in accordance with approved submittals and Contractor is not relieved from deviations from Contract Documents

• Contractor not required to provide licensed architectural or engineering services unless


– Performance and design criteria specifically required by Contract Documents for portion of the Work

– Unless necessary for means, methods, techniques, sequences and procedures

Use of Site• Contractor shall

– Confine operations to site and areas permitted by• Laws• Statutes • Ordinances• Codes• Rules and regulations• Lawful orders of public

authorities– Not unreasonably

encumber site with materials or equipment


Cutting and Patching• Contractor responsible for following and for restoring areas to

condition existing prior to– Cutting– Fitting – Patching

• Contractor shall not damage or endanger Work of the Owner or separate Contractors


Cleaning Up• Contractor shall keep premises free from accumulation of

waste materials or rubbish• At completion of Work, Contractor shall remove

– Waste materials– Rubbish– Contractor’s tools– Construction equipment– Machinery– Surplus materials

• If Contractor fails to clean up, Owner may do so and be reimbursed by Contractor


Access to Work• Contractor should provide Owner and Architect access to the

Work in preparation and progress


Royalties, Patents and Copyrights• Contractor shall pay royalties and license fees• Contractor shall defend suits or claims for infringement of

copyrights and patent rights and hold Owner and Architect harmless from loss

• Contractor not responsible for such defense or loss when particular design, process or product of particular manufacturer is required by Contract Documents


Indemnification• Contractor shall indemnify and hold harmless the following

from claims, damages, losses and expenses from performance of the Work to the extent caused by negligent acts or omissions– Owner– Architect– Architect’s consultant



ARTICLE 4ARCHITECT

43

General• Architect is a person or entity identified in Agreement• Designated representative has express authority to bind

Contractor to matters under Contract• Duties, responsibilities and limitations of authority of Architect

as set forth in Contract Documents shall not be – Restricted– Modified – Extended


• If Architect is terminated, Owner shall employ successor architect as to whom Contractor has no reasonable objection

Administration of the Contract• Architect will

– Provide administration of the Contract as described in Contract Documents

– Be Owner’s representative during construction

– Have authority to act on behalf of Owner to extent provided in Contract Documents


Administration of the Contract• Architect will visit site at intervals appropriate to stage of

construction– To become generally familiar with progress and qualify of portion of Work

completed– To determine in general if Work observed is being performed in a manner ,

when completed, will be in accordance to Contract Documents– Not required to make exhaustive or continuous on-site inspections to check

quality or quantity of the Work


Administration of the Contract• Architect will keep Owner reasonably informed about progress

and quality of Work completed and report to Owner– Known deviations from Contract Documents and schedule– Defects and deficiencies observed in the Work

• Architect not responsible for Contractor’s failure to perform Work in accordance with Contract Documents


Administration of the Contract• Architect will not have control over, charge of, or responsibility

for, construction – Means– Methods – Techniques– Sequences– Procedures– Safety precautions and programs


Administration of the Contract• Architect will have no

control over or charge of and will not be responsible for acts and omissions of

– Contractor– Subcontractors– Agents or employees– Other persons or entities

performing Work


Administration of the Contract• Based on Contractor’s

Applications for Payment, Architect will– Review and certify amounts due– Issue Certifications for Payment

• Architect has authority – To reject Work not conforming

with Contract Documents– To require inspection or testing

of Work whether or not fabricated, installed or completed


Administration of the Contract• Architect will review and take action

on Contractor’s submittals– For limited purpose of checking for

conformance with information given– Design concept expressed in Contract

Documents– Not conducted for purpose of

determining accuracy and completeness of details, dimensions, and quantities of for substantiating instruction for installation or performance of equipment or systems

– Review does not constitute approval of safety precautions


Administration of the Contract• Architect will

– Prepare Change Orders and Construction Change Directives– Authorize minor changes – Investigate and make determinations and recommendations regarding

concealed and unknown conditions


Administration of the Contract• If Owner and Architect agree, Architect will provide project

representatives at site• Architect will interpret and decide matters concerning

performance under, and requirements of, Contract Documents on written request of either Owner and Contractor (this may want to be changed if initial decision maker is used)

• Regarding communications – Owner and Contractor shall endeavor to communicate through Architect– Communications by and with Architect’s Consultants through Architect – Communications by and with Subcontractors through Contractor


Administration of the Contract• Interpretations and decisions of Architect will

– Be consistent with intent of, and reasonably inferable from, Contract Documents

– Endeavor to secure faithful performance by Owner and Contractor– Not show partiality to Owner or Contractor– Not be liable for results of interpretations or decisions rendered in good

faith


• Architect’s decisions on aesthetic effect will be final if consistent with intent expressed in Contract Documents

Administration of the Contract• Architect will review and respond to requests for information

about Contract Documents



ARTICLE 5SUBCONTRACTORS

56

Definitions• Subcontractor is a person or entity who has direct Contract

with Contractor to perform portion of Work at site• Sub-subcontractor is a person or entity who has direct or

indirect Contract with Subcontractor to perform portion of Work at site


Award of Subcontracts and OtherContracts for Portions of the Work

• Contractor– Shall not contract with entity

to whom Owner or Architect has made objection

– Will not be required to contract with anyone Contractor has made objection

– Shall not substitute Subcontractor if Owner or Architect has made objection


Subcontractual Relations• Contractor shall require Subcontractors

– To be bound by terms of Contract Documents– To assume toward Contractor all obligations and responsibilities which

Contractor assumes toward Owner and Architect – To enter into similar agreements with Sub-subcontractors


Contingent Assignmentof Subcontracts

• If Owner terminates Contractor for cause, subcontracts are assigned by Contractor to Owner who assumes Contractor’s rights and obligations

• Owner may further assign subcontract to successor Contractor or other entity



ARTICLE 6CONSTRUCTION BY OWNER OR BY

SEPARATE CONTRACTORS

61

Owner’s Right to Perform Construction and to Award Separate Contracts

• Owner reserves right to perform construction or operations with Owner’s own forces and to award separate Contracts

• Owner shall coordinate activities of Owner’s own forces and separate Contractors with Work of Contractor

• When Owner performs construction or operations, Owner subject to same Conditions of the Contract as Contractor


Mutual Responsibility• Regarding Owner and separate Contractors, Contractor shall

– Afford opportunity for storage of materials and equipment– Allow performance of their activities– Connect and coordinate Contractor’s construction and operations with

theirs

• If Contractor’s Work depends on Owner or separate Contractors, Contractor shall report discrepancies or defects in such construction; failure to report constitutes acceptance

• Contractor shall reimburse Owner for costs payable to separate Contractors because of Contractor’s delays, improperly timed activities or defective construction; and vice versa


Owner’s Right to Clean Up• If disputed among Contractor, separate Contractors and

Owner concerning clean up, Owner may clean up and Architect will allocate cost among those responsible



ARTICLE 7CHANGES IN THE WORK

65

General• Changes accomplished after Contract execution that do not

invalidate Contract– Change order – Based on agreement among Owner, Contractor and

Architect– Construction Change Directive – Requires agreement by Owner and

Architect and may or may not be agreed to by Contractor– Minor change in the Work – Issued by Architect alone

• Promptly performed under applicable provisions of Contract Documents


Change Orders• Written instrument,

prepared by Architect and signed by Owner and Contractor, agreeing to


– Change in the Work– Amount of adjustment in

Contract Sum– Amount of adjustment in

Contract Time

Construction Change Directive• Written order, prepared by Architect and signed by Owner and

Architect, directing a change in the Work prior to agreement on– Amount of adjustment in Contract Sum– Amount of adjustment in Contract Time

• Owner may, without invalidating the Contract, order following changes in the Work with the “CCD”– Additions– Deletions– Other revisions

• Used in absence of total agreement on Change Order terms


Construction Change Directive• Methods for adjustment of

Contract Sum– Itemized lump sum– Unit price– Fixed or percentage fee– Approved otherwise

• Upon receipt, Contractor promptly proceeds with change and indicates agreement of disagreement with adjustment

• Contractor’s signature indicates agreement


Construction Change Directive• If Contractor does not proceed or disagrees with method of

adjustment of Contract Sum, Architect will determine reasonable method of adjustment that includes – Costs of labor– Costs of materials– Equipment rental costs– Costs for

• Premiums for bonds and insurance• Permit fees• Sales, use or similar taxes

– Additional costs of supervision and field office personnel

• When Contractor agrees, Change Order issued by A/E


Minor Changes in the Work• Architect has authority to order

minor changes in the Work not involving – Adjustment in Contract Sum– Adjustment in Contract Time– Not inconsistent with Contract

Documents

• No Change Order needed



ARTICLE 8TIME

72

Definitions• Contract Time – Period of time,

including adjustments, allotted in Contract Documents for Substantial Completion of the Work

• Date of Commencement of the Work – Date established in Agreement

• Date of Substantial Completion –Date certified by Architect

• Day – Calendar days unless otherwise defined


Progress and Completion• Time is of the essence – By

executing Contract, Contractor confirms Contract Time is reasonable

• Contractor cannot prematurely commence operations before effective date of insurance

• Contractor proceeds expeditiously with adequate forces to achieve Substantial Completion within Contract Time


Delays and Extensions of Time• If Contractor is delayed by any of following, then extended by

Change Order– Act or neglect by Owner or Architect– Changes in the Work– Labor disputes– Fire– Unusual delay in deliveries– Unavoidable casualties– Mediation of arbitration– Other causes justified by Architect



ARTICLE 9PAYMENTS AND COMPLETION

76

Contract Sum• Stated in Agreement, including adjustments, is total amount

payable by Owner to Contractor for performance of the Work


Schedule of Values• Allocates entire Contract Sum to various portions of the Work • Prepared in form and supported by data to substantiate

accuracy as Architect requires• Basis for reviewing Contractor’s Applications for Payment


Applications for Payment• Contractor submits in accordance with Schedule of Values

supported by data substantiating right to payment• Includes

– Completed portions of the Work– Change Orders– Authorized Construction Change Directives– Stored materials– Cannot include requests for payment for portions of the Work for which a

Subcontractor will not be paid

• Contractor warrants– By time of payment, title to Work passes to Owner– Upon submittal, previous Certificates for Payment free of liens and claims


Applications for Payment


Certificates for Payment• Upon receipt of

Contractor’s Application for Payment, Architect will perform one of following– Issue Certificate for

Payment to Owner– Notify Contractor and

Owner of Architect’s reasons for withholding certification in whole or in part


Certificates for Payment• Upon receipt of Contractor’s Application for Payment, Architect

will perform one of following– Issue Certificate for Payment to Owner– Notify Contractor and Owner of Architect’s reasons for withholding

certification in whole or in part

• Representation by Architect to Owner that– Work has progressed to point indicated and quality in accordance with

Contract Documents – Contractor is entitled to amount certified


Certificates for Payment• Not a representation that Architect

– Made exhaustive or continuous on-site inspections to check quality or quantity of the Work

– Reviewed construction • Means• Methods • Techniques• Sequences • Procedures

– Reviewed data to substantiate Contractor’s right to payment

– Ascertained purpose Contractor has used previous payments


Decisions to Withhold Certification• Architect may withhold Certificate for Payment in whole of in

part– To extent reasonably necessary to protect Owner– If in Architect’s opinion representations to Owner cannot be made

• Architect may withhold a Certificate for Payment or may nullify Certificate previously issued to protect Owner because of subsequently discovered evidence because of– Defective Work not remedied– Third party claims– Failure of Contractor to make payments to Subcontractors

Continued on following slide


Decisions to Withhold CertificationContinued from previous slide–Reasonable evidence that Work cannot be completed for unpaid balance–Damage to Owner of separate Contractor–Reasonable evidence Work cannot be completed within Contract Time–Repeated failure to carry out Work in accordance with Contract Documents

• When reasons are removed, certification will be made for amounts previously withheld

• Owner may issue joint checks to Contractor and any entity to whom Contractor failed to make payment


Progress Payments• After Certificate issued, Owner makes payment • Contractor makes payment to Subcontractors reflecting

retainage• Owner has right to request evidence that Contractor has made

payments to others• Following does not constitute acceptance of Work not in

accordance with Contract Documents– Certificate for Payment– Progress payment– Partial or entire use or occupancy of Project


Failure of Payment• Contractor may stop

Work until payment is received if any of following happen– Architect does not issue

Certificate– Owner does not pay

Contractor


Substantial Completion• Stage in progress of Work when sufficiently complete in

accordance with Contract Documents so that Owner can occupy or utilize for intended purpose

• When Contractor considers Work substantially complete, Contractor prepares comprehensive list of items to be completed or corrected

• Architect will make an inspection to determine whether the Work is substantially complete

• Contractor completes or corrects items on list


Substantial Completion• When Work is substantially complete,

Architect– Prepares Certificate of Substantial

Completion – Establishes Date of Substantial Completion – Establishes responsibilities of Owner and

Contractor for• Security• Maintenance• Heat• Utilities• Damage to Work• Insurance• Fix time for Contractor to finish list of

items


Substantial Completion• Warranties commence on Date of Substantial Completion• Upon acceptance by Owner, and consent of surety, Owner

makes payment of retainage


Partial Occupancy or Use• Owner may occupy or use any

completed or partially completed portion of the Work

• Can commence whether or not substantially complete

• Consent of Contractor to partial occupancy or use cannot be unreasonably withheld

• Partial occupancy or use does not constitute acceptance of the Work


Final Completion and Final Payment• When Contractor is ready for final inspection and acceptance,

upon receipt of final Application for Payment– Architect will make such final inspection– When Architect finds Work acceptable under Contract Documents and

Contract fully performed– Architect will issue final Certificate of Payment stating entire balance is due

and payable


Final Completion and Final Payment• Prior to Final Payment, Contractor must submit

– Affidavit that all payments made– Evidence that required insurance will remain in effect for period of time– Statement that insurance will be renewable– Consent of surety– Other data required by Owner

• Making Final Payment constitutes waiver of claims by Owner except– Unsettled liens, claims, security interests or encumbrances– Failure of Work to comply with Contract Documents– Terms of special warranties

• Acceptance of Final Payment constitutes waiver of claims



ARTICLE 10PROTECTION OF PERSONS

AND PROPERTY

94

Safety Precautions and Programs• Contractor responsible for initiating, maintaining and

supervising safety precautions and programs


Safety of Persons and Property• Contractor responsible for safety and protection to prevent

damage, injury or loss to– Employees on the Work– Work and materials and equipment– Other property at, or adjacent to, site


Safety of Persons and Property• Contractor shall

– Comply with applicable safety laws, statues, ordinances, codes, rules and regulations, and lawful orders

– Erect and maintain safeguards – Exercise utmost care with explosives and hazardous materials– Remedy damage and loss– Designate Contractor employee with duty of prevention of accidents– Not permit loading that causes damage or unsafe condition

• Injury or damage to person or property– If either party suffers injury or damage because of act or omission of other

party, written notice to other party required– Notice should contain information to enable investigation


Hazardous Materials• Contractor

– Responsible for compliance with Contract Documents – If hazardous materials encountered, Contractor may stop Work in area

and notify Owner

• Owner– Responsible for hazardous materials required by Contract Documents

except for Contractor’s negligence– Not responsible for hazardous materials Contractor brings on site not

required by Contract Documents– Responsible if Contractor held liable by governmental agency for

remediation of material from performing Work


Emergencies• In an emergency

affecting safety, Contractor may act, at Contractor’s discretion, to prevent threatened damage, injury or loss



ARTICLE 11INSURANCE AND BONDS

100

Contractor’s Liability Insurance• Contractor purchases and maintains insurance to protect from

claims resulting from operations under Contract at limits specified or required – Worker’s compensation– Bodily injury or death of Contractor’s employees– Bodily injury or death of other than Contractor’s employees– Personal injury liability– Damages because of injury or destruction of tangible property– Use of motor vehicles– Damage arising out of completed operations– Contractual liability


Owner’s Liability Insurance• Owner purchases and maintains Owner’s usual liability

insurance


Property Insurance• Owner purchases and maintains builder’s risk “all risk”

insurance which includes

• Owner purchases and maintains boiler and machinery insurance


– Perils of fire and physical loss

– Theft– Vandalism– Malicious mischief– Collapse– Earthquake– Floor

– Windstorm– False-work– Testing and startup – Temporary buildings– Debris removal– Contractor’s compensation– Architect’s compensation

Property Insurance• Owner, at Owner’s option, may purchase and maintain

insurance to insure Owner against loss of use of Owner’s property due to fire or other hazards

• .Waivers of Subrogation– Owner and Contractor waive all rights for damages against Each other and their

subcontractors, sub-subcontractors, agents and employees, each of the other– Architect, Architect’s consultants, separate Contractors, and their subcontractors,

sub-subcontractors, agents and employees

– Subrogation: The purpose of subrogation is to compel the ultimate payment of a debt by the party who, in Equity (fairness) and good conscience, should pay it. This subrogation is an equitable device used to avoid injustice.


Performance Bond and Payment Bond• Owner has right to require Contractor to furnish bonds

covering faithful performance and payment of obligations



ARTICLE 12UNCOVERING AND CORRECTION

OF WORK

106

Uncovering of Work• Architect may request portions of the Work covered, contrary

to A/E request or requirements, be uncovered for Architect’s examination and replaced at Contractor’s expense

• If Architect has not requested opportunity for examination, portions of the Work covered should be uncovered for Architect’s examination– Replacement at Owner’s expense if Work in accordance with Contract

Documents– Correction of Work and replacement at Contractor’s expense if Work not

in accordance with Contract Documents


Correction of Work• Before or after Substantial Completion, Contractor should

correct Work rejected by Architect for failing to conform to Contract Documents whether fabricated, installed or completed or not

• After Substantial Completion, if within one year after Date of Substantial Completion or after commencement of warranties, Contractor should correct nonconforming Work– Requires notice by Owner; failure to do so constitutes Owner’s waiver– If Contractor fails to correct Work, Owner has right to do so at

Contractor’s cost– One year correction period not extended for Work corrected under this

article. – Work not finished at Substantial Completion has extended dates.


Acceptance of Nonconforming Work• If Owner prefers to accept Work not in accordance with

Contract Document– Owner may do so instead of requiring removal and correction– Appropriate and equitable adjustment to Contract Sum



ARTICLE 13MISCELLANEOUS PROVISIONS

110

Governing Law• Contract governed by law of Project location

Successors and Assigns• Owner and Contractor bind themselves, their partners,

successors, assigns and legal representatives to covenants, agreements and obligations contained in Contract Documents

111Conditions of the Contract: 13.1 and 13.2

Written Notice• Written notice deemed duly served

– Delivered in person to individual or member of firm or entity– Delivered to officer of corporation– With proof of delivery

Rights and Remedies• Duties and obligations imposed by Contract Documents and

rights and remedies in addition to those available by law


Tests and Inspections• Tests, inspections and approvals made as required by

– Contract Documents– Applicable laws, statutes, ordinances, codes, rules and regulations or

lawful orders of public authorities

• Contractor shall– Make arrangements with independent entity– Bear costs– Bear costs to remedy deficient Work identified from testing and

inspections

• Owner will– Bear costs for tests, inspections or approvals required after bids received– Bear costs for tests, inspections or approvals where law prohibits Owner

from delegating cost to Contractor


Tests and Inspections• If additional testing, inspection or approvals is required,

Architect will instruct Contractor to perform – Owner bears costs if Work conforms to Contract Documents– Contractor bears costs if Work does not conform to Contract Documents

Interest• Payments due and unpaid bears interest


Time Limits on Claims• Owner and Contractor commences claims and causes of

action against other according to – Agreement stipulations – Within time period specified by law, but not more than 10 years after Date

of Substantial Completion



ARTICLE 14TERMINATION OR SUSPENSION

OF THE CONTRACT

116

Termination by the Contractor• Contract may be terminated if Work is stopped for 30

consecutive days through no fault of Contractor for any of following reasons– Public authority order to stop Work– Act of government that requires Work to be stopped– Architect has not issued a Certificate for Payment, or Owner has not

made payment– Owner fails to furnish evidence of financial arrangements to fulfill

obligations


Termination by the Contractor• Contract may be terminated due to:

– Repeated suspensions– Delays or interruptions of entire Work

if time is equal to an aggregate of 100 percent of total number of days scheduled for completion, or 120 days out of any 365 day period

• Contractor may, upon 7 days written notice, terminate contract with Owner and recover payment for Work executed

• Contract may be terminated if Work is stopped for 60 consecutive days because Owner has repeatedly failed to fulfill Owner’s obligations important to progress of the Work


Termination by the Ownerfor Cause

• Owner may terminate Contract if Contractor– Refuses or fails to supply workers and materials– Fails to make payment to Subcontractors– Disregards applicable laws, statutes, ordinances, codes, rules and

regulations or lawful orders of public authorities– Breach of provision of Contract Documents

• If Initial Decision Maker certifies cause exists, Owner may terminate Contract– Exclude Contractor from site and take possession of materials and

equipment– Accept assignment of Subcontractors– Finish the Work


Termination by the Ownerfor Cause

• When terminates, Contractor not entitled to further payment

• If unpaid balance exceeds costs of finishing, excess shall be paid to Contractor

• If costs of finishing exceeds unpaid balance, Contractor pays Owner


Suspension by the Ownerfor Convenience

• Owner may, without cause, order Contractor to suspend, delay or interrupt the Work in whole or in part

• Contract Sum and Contract Time adjusted by Change Order and included profit; no adjustment for– Performance would have been suspended, delayed, or interrupted by

another cause for which Contractor responsible– Adjustment made or denied under another provision of Contract

Documents


Termination by the Ownerfor Convenience

• Owner may terminate Contract for convenience and without cause

• Contractor shall– Cease operations– Take action to protect and preserve the Work– Terminate all Subcontracts and Purchase

Orders

• Contractor entitled to – Payment for Work executed– Costs for termination– Overhead and profit on the Work not

executed



ARTICLE 15CLAIMS AND DISPUTES

123

Claims• Demand or assertion by one party seeking payment of money

or other relief with respect to Contract terms– Includes other disputes and matters in question– Party making claim responsible for substantiation

• Must be initiated by written notice to other party, Initial Decision Maker and Architect within 21 days after– Occurrence of event giving rise to claim– Condition giving rise to claim first recognized

• Pending resolution– Contractor should proceed with the Work– Owner should continue to make payments


Claims• If Contractor wishes to make claim for increase in Contract

Sum, written notice required prior to executing the Work• If Contractor wishes to make claim for increase in Contract

Time, written notice required with cost estimate and probable effect of delay on progress

• If weather conditions are basis of claim for additional time


– Claim should be documented substantiating conditions were abnormal

– Conditions could not have been anticipated

– Conditions had adverse effect on scheduled construction

Claims• Contractor and Owner waive claims against each other for

consequential damages – Damages incurred by Owner for

• Rental expenses• Loss of use, income, profit, financing, business and reputation• Loss of management or employee productivity or services

– Damages incurred by Contractor for • Principal office expenses including personnel compensation• Loss of business and reputation• Loss of anticipated profit

This does not include Liquidated Damages


Initial Decision• Claims referred to Initial Decision Maker for initial decision• Initial Decision Maker reviews claim and take one of following

actions– Request additional supporting data– Reject claim in whole or in part– Approve claim– Suggest compromise– Advise parties unable to resolve claim

• Initial decision shall be final and binding, but subject to mediation, and if that fails, to binding dispute resolution

• Either party may file for mediation of an initial decision


Mediation• Claims, disputes or other controversial matters subject to

mediation as a condition precedent to binding dispute resolution

• Parties should endeavor to resolve claims by mediation, unless parties agree otherwise


• Fees shared by both parties

• Agreements reached are enforceable as settlement agreements in any court having jurisdiction

Arbitration• If selected as method for binding dispute resolution, claims not

resolved by mediation subject to arbitration• Award rendered is final and judgment may be entered upon it

according to applicable law in any court having jurisdiction• Either party may consolidate an arbitration under this

Agreement with any other arbitration to which it is a party under certain conditions


Questions?

130

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