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July 1, 2022
As an owner, you may need a construction contract for a small project that doesn’t require lengthy, complex legal terms. In this case, the A104-2017 Standard Abbreviated Form of Agreement Between Owner and Contractor and the A105-2017 Standard Short Form of Agreement Between Owner and Contractor are both excellent choices. These AIA contracts provide simple yet effective solutions for managing smaller projects. This article highlights the key factors you should consider when choosing between A104-2017 and A105-2017 for your construction needs.
Importance of Construction Contracts for Small Projects
Even for small construction projects, having a clear, well-defined contract is crucial. A construction contract provides a framework to outline each party’s responsibilities, ensuring clear expectations, reducing risks, and ultimately helping to foster a successful business relationship. This is true whether your project is straightforward or includes slightly more complexity.
Key Differences Between A104-2017 and A105-2017 Construction Contracts
Both the A104-2017 and A105-2017 create a stand-alone contractual relationship between the owner and contractor. This means that general conditions are included directly in the contract without being referenced or attached separately. However, while both contracts are designed for small projects, the A104-2017 offers more flexibility for projects with a slightly higher degree of complexity. Below, we compare the most significant differences between the two contracts:
1. Enumeration of the Contract Documents
Both contracts allow you to reference the essential documents, such as drawings, specifications, and addenda. However, the A104-2017 provides additional flexibility by allowing you to incorporate building information modeling (BIM), sustainability goals, and other supplementary conditions. It also includes provisions for establishing the protocols for digital data exchange, ensuring all parties are aligned in the digital realm.
2. Method of Compensation
The A104-2017 is suitable for projects that may involve more detailed or complex scopes. It offers compensation options by stipulated sum or cost of work with or without a guaranteed maximum price (GMP). In contrast, the A105-2017 uses a simplified approach with stipulated sum compensation only. The A105-2017 is ideal for projects with clearly defined scopes, detailed designs, and minimal risk of unforeseen conditions.
3. Delegated Design
If your project requires professional design services from the contractor, the A104-2017 allows for delegated design, where the contractor may provide the design services in addition to their general responsibilities. It also outlines how delegated design should be managed. The A105-2017, on the other hand, does not include any provision for delegated design.
4. Subcontractor Agreements
The A104-2017 includes provisions governing the contractor’s use of subcontractors for portions of the work. This includes requirements like notifying the owner and architect of proposed subcontractors and flowing down terms to subcontractors. The A105-2017 lacks these standard provisions, making it simpler but less comprehensive in terms of subcontractor oversight.
5. Hazardous Materials
The A104-2017 includes clear provisions for situations where hazardous materials or substances are encountered during construction. It outlines the owner’s indemnification obligations, ensuring both parties understand their roles if such materials are found. The A105-2017 does not address hazardous materials or indemnity related to them.
6. Dispute Resolution
In the event of a dispute, A104-2017 includes the architect as the initial decision maker, followed by mediation. If mediation fails, the contract provides options for more formal dispute resolution, such as arbitration or litigation. The A105-2017 omits arbitration and other advanced dispute resolution methods but provides a section where parties can add their desired resolution procedure if needed.
Which Construction Contract Should You Choose?
When deciding between A104-2017 and A105-2017, it’s important to consider the scope, complexity, and risk of your project. A104-2017 is better suited for projects with slightly more complexity, including detailed designs, use of subcontractors, and the potential for hazardous materials. A105-2017 is ideal for simpler projects that involve a clear scope, defined costs, and minimal risk.
For More Complex Projects, Consider Other AIA Documents
For projects that are more complex than those suited for the A104-2017 or A105-2017, you might consider using more detailed AIA documents, such as:
Each of these incorporates AIA Document A201-2017, the General Conditions of the Contract for Construction. For single-family residential projects, there are specialized agreements, including AIA Document A110-2021 and others that are designed specifically for residential construction.
In any case, take the time to carefully assess your project’s risks and complexity before selecting a contract.
AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors. Any language quoting from AIA Contract Documents that have not yet been released is subject to change before final publication.