Contract documents

March 1, 2024

There is no set way to schedule a project. Each project requires a different schedule based on the characteristics of the job. This article will take a look at language found in A201- 2017 General Conditions of the Contract for Construction and A101-2017 Standard Form of Agreement between Owner and Contractor and highlight some the key considerations to make when setting either the duration or date to achieve Substantial Completion.

Contract Terms

Before discussing key considerations, it is helpful to look at some of the relevant agreement terms. The general conditions related to the project schedule are mainly found in Article 8 of A201-2017. For example, Section 8.1.1 of A201-2017 defines Contract Time as “the period of time, including authorized adjustments, allotted in the Contract Documents for Substantial Completion of the Work.” Then, Section 8.2.1 states, in relevant part that, “[b]y executing the Agreement, the Contractor confirms that the Contract Time is a reasonable period for performing the Work.” As a reminder, Section 9.8.1 of A201-2017 defines Substantial Completion as “the stage in the progress of the Work when the Work or designated portion thereof is sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or utilize the Work for its intended use.”

The specifics related to Contract Time are mainly found in Article 3 of A101-2017. This article focuses on one of those specifics – Substantial Completion. Specifically, Section 3.3 of A101-2017 allows the parties select whether Substantial Completion of the Work will be (i) not later than a set number of calendar days from the date of commencement of the Work; or (ii) by a specific date. Then Section 3.3.2 of A101-2017 allows the parties to identify any portions of the Work that will be completed prior to Substantial Completion of the entire Work and their respective Substantial Completion dates.

Key Considerations

Section 8.2.1 of A201 is designed to preclude any claim from the Contractor that the time limits established in the Contract Documents are unreasonable from the outset. If a prospective contractor feels that any of the specifics related to Contract Time are unreasonable, then the appropriate time to negotiate a change is before the Agreement is executed, not afterward. When setting either the duration or date upon which the Substantial Completion will be achieved, parties should consider the following:

Option 1 – Not later than a certain number of calendar days from the commencement of the Work. If there is not a specific date for the commencement of the Work, the parties may agree that Substantial Completion will be achieved within a specific performance period.

Option 2 – A specified date. If an Owner has a specific deadline or occupancy date that needs to be met for business or operational reasons, setting a specific date for Substantial Completion allows for alignment with these expectations. Certain projects may also have legal or regulatory deadlines or milestones that require adherence to a specific Substantial Completion date. Failure to meet these deadlines may result in legal consequences or regulatory penalties. To the extent a specific date is set to achieve Substantial Completion, the Owner may need to ensure the site will be ready for Work to proceed, including obtaining any necessary permits.

Partial Occupancy. If portions of the Work are to be occupied before the entire Work is complete, the parties will want to identify that in Section 3.2.2 of A101-2017. Parties should take into consideration whether Substantial Completion of each portion of Work will be achieved within a specific performance period or by a specified date. Additionally, these Substantial Completion dates should align with the Substantial Completion date specified for the entire Work.

Substantial Completion is a critical aspect to delivering the project on time and within budget. Parties should carefully assess the conditions of each Project, negotiate a fair and reasonable Substantial Completion date, and then clearly document that in their Agreement.

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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.