AIA owner-contractor documents are worth a look

  • April 23, 2018
  • Andrew J. Heal

The American Bar Association Forum on Construction Law held a conference in Boston in October 2017 where leading ABA lawyers gave presentations over the course of two days, reviewing and commenting on the new American Institute of Architects’ 2017 A Series Owner- Contractor documents. What follows are some brief high level comments on these new AIA forms from a Canadian perspective.1

Since 1888, the AIA has published industry-wide standard construction contract documents and related forms. The idea is that, like the Canadian Construction Documents Committee standard forms in Canada, these consensus documents enjoy broad industry support as a relatively fair and balanced allocation of project risks and responsibilities. Fair risk allocation, much like beauty, is in the eye of the beholder. Like the CCDC documents, licences to use them must be purchased. Also, there are instructions for online editing and use of electronic forms.

The design, bid, build contract of project delivery remains front and centre even in this new world of integrated project delivery, and alternative financing models of project delivery. This conference focused on the Owner/Contactor Series A standard forms.

There are some clear differences between AIA 2007 and AIA 2017. Their relevance to the Canadian practitioner may only be to consider the American perspective when clients either build here, or travel to the U.S. to build there. Engaging local U.S. counsel is always advisable, and the ABA Forum has many leading practitioners listed state by state. Much like Canada, civil rights and property law is state-based, including lien law. There are some interesting points in AIA 2017 that can form discussion points:

  • Insurance, A201 article 11, and the Insurance Exhibit. There have been substantial revisions that allow a tailoring of the AIA 201 General Conditions to keep up with industry and market changes. Either the owner or the contractor is required to purchase property insurance for “all-risks” coverage for the entire project on a replacement cost basis, and to keep that project insured until the end of the usual one-year correction (warranty) period.
  • Article 11 (A201-201). The substantive terms pertaining to insurance are mostly set out here (a few are still in A201). Here now owner and contractor (as opposed to insurer) have to provide notice of insurance coverage cancellation.
  • Sustainable Projects. There is now an E204 -2017 aggregating of prior guidance such as the D503-2011 guide and A141 -2014 Exhibit C guide for sustainable projects.
  • BIM and Digital Data. Now provides in 3.11 A201 – 2017 that contractor may maintain all the contract documents (and change orders and change directives) at the site in electronic format, and provides for electronic notice.
  • Termination Fee Provisions. There are now provisions for relief for termination for convenience including a predetermined fee, or an amount for reasonable overhead and profit.
  • There is further guidance on the use of alternate methods or materials.
  • Liquidated damages are further entrenched as an owner remedy for late completion.
  • Now, for the first time, there is express acknowledgment for an initial decision-maker to interpret the contract documents, or contract dispute other than the architect (or in the CCDC language) the consultant.
  • There is now express acknowledgment of the need of the owner to, when requested, provide evidence of adequate financial arrangements, particularly where there is a material change in the contract sum.
  • There is an important ability on the part of the Ccontractor to object to specified or required means and methods that it determines might not be safe, and to propose alternative means and methods that are safe for the evaluation of the architect.

It must be remembered that “one size fits all”2 may not be an ideal solution, but rather a good starting point. Many projects cannot bear a “bespoke” contract solution but the allocations made in the AIA 2017 suite of documents are intended to be fair, and are a good starting point for discussion with a client and local U.S. counsel.

Andrew J. Heal is a partner with Heal & Co. LLP, Toronto, , These comments are not intended as legal advice.

End notes

  1. See AIA website, A series Documents. There are Series A – G documents; and well over 200 documents and guides to consider across the project delivery spectrum.
  2. See for example, King & Spalding Commentary, JD Supra.