Contract documents

June 21, 2023

 AIA Contract Documents (ACD) has produced documents for the design and construction industry since 1888. ACD offers many different types of documents, including agreements between owner and architect, owner and contractor, and owner and consultant. ACD also offers a significant library of forms commonly used in the construction industry, such as change order forms, application for payment forms, and lien waiver and release forms. Most agreements reference a separate general conditions document, and A201 is the most commonly referenced general conditions document in the industry. 

 So, what is A201- 2017? At its core, it is an “umbrella” document that coordinates the responsibilities of the major project participants. It defines terms and the relationships between the various parties. While not an agreement itself, many agreements on the project refer to the A201 for various reasons.The owner/architect agreement, the owner/contractor agreement, and even the contractor/subcontractor agreements refer to and incorporate A201. ACD does publish other families, or groups, of documents for different project delivery methods, but A201 is referenced in the commonly used Conventional (Design-Bid-Build) delivery method. 

 Each party has their own separate agreements with other parties, but A201 ties the responsibilities of the architect, contractor, and owner together for the whole project. In this way, the A201 provides consistency across all contractual relationships, from the prime owner/contractor agreement, down to the contractor/subcontractor agreements. For this reason, it is just as important for the subcontractors to have A201 as it is for the prime contractor. 

 A201 details all the relationships between the parties, and it also covers important concepts such as time, changes, payments, claims, suspension, termination, and insurance. Here are some sections of interest to contractors and subcontractors: 

 Providing Notice 

 Many provisions require that one party notify another, so it is crucial to understand how these types of notice may be provided. A201 Section 1.6.1 states that when notice is required, it shall be provided in writing and “delivered in person, by mail, by courier, or by electronic transmission if a method for electronic transmission is set forth in the Agreement.” ACD publishes a group of digital practice documents which were updated in 2022. These govern the use of digital data and what is acceptable as a means of electronic transmission. The parties may attach these exhibits to their Agreement to clarify how they intend to communicate. It is important to note that A201 treats notice of Claims differently than other forms of notice. Given the importance and gravity of a Claim, Section 1.6.2 of A201 requires notice of Claims to be provided “in writing and shall be deemed to have been duly served only if delivered to the designated representative of the party to whom the notice is addressed by certified or registered mail, or by courier providing proof of delivery.”  

 Subcontractual Relations 

 A201 Section 5.3 covers subcontractual relations. General conditions cover all parties to the project, including subcontractors, consultants, and others involved in the project. This means that the rights and obligations of the prime agreement “flow down” to the subcontractors and sub-subcontractors. For this reason, it is important for subcontractors on a Project to insist on reviewing and understanding the general conditions document that was included in the prime agreement between the owner and contractor.   

 Progress Payments 

 A201 Section 9.6.8 protects the owner from claims by subcontractors. If the owner has paid the prime contractor, that contractor must defend the owner from lien claims arising out of the project, from any subcontractor or supplier, including sub-subcontractors. The prime contractor is responsible for attorney’s fees as well. The owner is required to notify the prime contractor when the owner receives notice of a lien or other claim. If court-approved, the contractor may substitute a surety bond. 

 Termination by the Owner 

 If the Owner terminates the Contractor for convenience, A201 Section 14.4.3 requires the owner to pay the contractor for work performed, costs associated with termination, and a termination fee, if any. Note that the costs associated with termination include the costs associated with terminating subcontractors. Contractors and subcontractors should carefully consider these factors as they determine their termination fee. 

 Know what you signed up for! 

 When signing an agreement, it is important to have all applicable documents, including general conditions. Make sure you read and understand the documents and ask an attorney for relevant legal advice. 

 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.