Contract Writing Checklist
Choosing a Design or Construction Contract
When you are choosing a contract for your architect and contractor, you have a number of standard forms to choose from. The AGC (Associated General Contractors), AIA (American Institute of Architects), CMAA (Construction Management Association of America) and others have their standards. In addition, the firm you deal with may not use a standard form, but use one custom developed for them.
Frankly, all contracts are biased. Which way depends on the writer. The AIA documents are slanted towards the architectural community. The AGC documents are slanted towards the contracting community. However, the benefit to using these standard documents is that they have been reviewed by peers and are coordinated amongst the various documents.
Contract Review Checklist
Here’s a checklist I use when reviewing or modifying a contract:
1. Scope of Work
- Detailed description of the services to be provided
- Detailed description of the facility being designed or constructed
- Owner responsibilities
- Contracting party responsibilities
- Schedule for the work to be performed
2. Commercial
- How will the work be paid for? Lump sum?, T&M?, etc.
- What is reimbursable cost and what is included
- Retention provisions
- Bonding or other security requirements
- Terms of payment and the invoicing procedures
3. Legal
- Changes section including Force Majeure and disputed changes
- Waiver of consequential damages by both parties
- Warranties and guarantees section
- Indemnifications
- Damage to property
- Insurance section
- Audit rights
- Project documentation and retention
- Liens
- Assignments
- Completion and acceptance
- Termination or cancellation section
- Governing law and dispute resolution
- Precedence of the documents
Recommendations When Negotiating a Contract
I strongly recommend paying for legal advice prior to negotiating or executing any contract. You should understand the various contracts and what the provisions mean. If you don’t, then you better ask. That is what you are buying with your money. The contract also documents what risks you have agreed to be responsible for. The contract checklist above should make you a more informed buyer.
I found your blog on MSN Search. Nice writing. I will check back to read more.
Eric Hundin
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Eric,
Thanks for the comment. Real estate investing and developing was an eye opener for me. You quickly learn that you earn every penny. Should be some interesting posts in the future as nothing goes as you actually plan.
[…] document.write(”); Contract Writing ChecklistWhen you are choosing a contract for your architect and contractor, you have a number of standard forms to choose from. The AGC (Associated General Contractors), AIA (American Institute of Architects), CMAA (Construction Management more […]
Found your post on a Google Search, and enjoyed it. I think that you have some good information here. These form contracts are extraordinary popular in the construction industry, especially as the project size increases.
You mentioned the AGC contracts in your post, but not ConsensusDOCS. Perhaps you had not heard of it.
AGC actually discontinued their contract documents program in late 2007, and launched (along with nearly 20 other trade associations) ConsensusDOCS. ConsensusDOCS.org has more information. The documents are marketed as “a consent” between all trades (contractors, architects, engineers, surities). It makes for interesting research, and I will be curious to see how it goes.
I keep a construction law blog that keeps track of these kind of developments. The blog is at http://blog.wolfelaw.com. The “Construction Contracts” category can be found here: http://blog.wolfelaw.com/search/label/Construction%20Contracts
Scott,
Thanks for comment. I checked your site and the posts are full of good information related to construction law. I didn’t spend a lot of time on consensusdocs.org, but will review it. Not sure how that many trade groups ever agreed on anything!