Volume 5 - Number 50 | December 17, 2007 - Construction Claims Advisor

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You are here: Home » Volume 5 - Number 50 | December 17, 2007

Volume 5 - Number 50 | December 17, 2007

EDTIOR'S NOTES | Issue 5-50: Standardized contracts are easy enough to come by. If you want a legal document for a simple matter, such as a power of attorney or will, a simple Google search will yield hundreds of results. Want to sell a vehicle? Just type in “Bill of Sale” and you’ll get another plethora of options that will also work for sales of equipment, watercraft, aircraft, furniture, animals and personal property. When it comes to standardized contracts in construction, though, the American Institute of Architects (AIA) has the corner on the market. The contracts and incorporated clauses have stood up to countless lawsuits. In this week’s first case, a homeowner argued that a clause in the document in question was one-sided because it was written by an organization designed to favor architects. His argument failed and the contract stood.

In another contract-related case, a contractor did not provide contract-mandated notice of a claim. Although a type of notice was filed, it did not meet the specifications of the contract and was therefore disallowed.

And finally, if a contract is not signed, a contractor’s best bet is to hold off on the project until all parties have signed on the dotted line. A notice to proceed is not sufficient to prove that an agreement between the parties is in place. Because a contractor began work on a municipal project before the contract was signed, it had no legal recourse when it was dismissed from the contract.

AIA ARBITRATION CLAUSE DID NOT UNDULY FAVOR ARCHITECTS: A standardized contract widely accepted in the construction industry holds its own against allegations from a homeowner that it is one-sided and unconscionable.

CLAIM NOTICE STRICTLY ENFORCED AGAINST CONTRACTOR: Case law prevails against a contractor that fails to submit proper notice of a claim. Because the notice lacked “verification,” the court does not address the underlying issue—payment for alleged extra work.

NO PUBLIC CONTRACT FORMED DESPITE TRANSMITTAL OF MULTIPLE DOCUMENTS: Bid acceptance, a notice to proceed and approved change order requests between a contractor and a municipality are not sufficient proof to establish a binding contract. The dismissed contractor is left without recourse.