What Contractors Need to Know About the AIA’s 2017 Contracts Update
The American Institute of Architects’ (AIA) contract document series is widely used and in the construction industry. Although these forms can be changed, they stand as an excellent blueprint to contractual documents. It’s important to note that the AIA issues revisions to its documents every 10 years. Following are the notable revisions to the A1A forms for contractors.
Clarification of the Architect’s Role
One of the hallmark elements of AIA contracts is that, by default, the architect is the initial decision maker. Introduced in the revision, the AIA specified that the architect is the first stop in claims resolution between the parties on a construction project. The architect must make their decisions without favoritism to either the owner or contractor. The previous version of AIA contracts required that all communication goes through the architect. However, the new version of AIA contracts outlines, permits, and simplifies direct communication between the owner and contractor. With the advanced background that general contractors bring to the table, they are more than capable of communicating technical information on their own behalf and keeping the architect abreast.
Insurance and Bonds
Another significant change in the revised documents is that most insurance provisions are now an exhibit to the agreement. This also offers additional details related to a contractor’s risk. This makes the resources easier to use and understand. This revision details what coverage contractors should have and what their obligations are.
Retainage and Termination Provisions
The new forms also address retainage, which is a portion of payment withheld from a contractor’s check to cover any defects or delays down the road. If the contractor worked with a subcontractor then the contractor held that same percentage from the subcontractors check until final payment. Should you have questions about any AIA contract provisions, a West Palm construction lawyer can assist you further.
There are times when a contractor or subcontractor isn’t a good fit for a project, even after the project has already begun. In these instances, a contractor got paid up to the point of termination and whatever they were intended to make in profit and overhead. In the new revision, there is a termination fee. There is a blank space in the form where the fee is to be entered and this represents a starting point for negotiations and discussion.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.