Date. The date represents the date the Agreement becomes effective. It may be the date an original oral agreement was reached, the date the Agreement was originally submitted to the Owner, the date authorizing action was taken or the date of actual execution. It will be the date from which the Contract Time is measured unless a different date is inserted under Section 3.1.
Parties. Parties to the Agreement should be identified using the full address and legal name under which this Agreement is to be executed, including a designation of the legal status of both parties (sole proprietorship, partnership, joint venture, unincorporated association, limited partnership or corporation [general, limited liability, closed or professional], etc.). Where appropriate, a copy of the resolution authorizing the individual to act on behalf of the firm or entity should be attached. Other information may be added, such as telephone numbers and electronic addresses.
Project. The proposed Project should be described in sufficient detail to identify: (1) the official name or title of the facility; (2) the location of the site; and (3) a brief description of the Project, including the proposed building usage, size, and capacity or scope of the Project.
Architect. As in the other AIA Contract Documents, the Architect’s full legal or corporate title should be used.
Article 2 The Work of This Contract
If portions of the Work are to be performed by persons or entities other than the Contractor, these should be indicated in the Supplementary Conditions.
Article 3 Date of Commencement and Substantial Completion
The following items should be included as appropriate:
§ 3.1 The date of commencement of the Work should be inserted if it is different from the date of the Agreement. It should not be earlier than the date of execution (signing) of the Agreement. After the first sentence, enter either the specific date of commencement of the Work, or if a notice to proceed is to be used, enter the sentence, “The date of commencement shall be stipulated by the notice to proceed.” When time of performance is to be strictly enforced, the statement of starting time should be carefully weighed.
§ 3.3 The time within which Substantial Completion of the Work is to be achieved may be expressed as a number of days (preferably calendar days) or as a specified date. If a specified date is used and the date of commencement is to be given in a notice to proceed, these dates must be carefully coordinated to allow sufficient time for completion of the Work. Any requirements for earlier Substantial Completion of portions of the Work should be entered here.
Optionally, insert any provisions for liquidated damages relating to failure to achieve Substantial Completion on time, or for bonus payments for early completion. Liquidated damages are not a penalty to be inflicted on the Contractor, but must bear an actual and reasonably estimable relationship to the Owner’s loss if construction is not completed on time. There is little or no legal precedent to support the proposition of linking a bonus with a penalty. If liquidated damages are to be assessed because delayed construction will result in actual loss to the Owner, the amount of damages due for each day lost should be entered in the Supplementary Conditions or the Agreement. Factors such as confidentiality or the need to inform subcontractors about the amount of liquidated damages will help determine the placement of such language. If provision for liquidated damages is included, it should be carefully drafted by the Owner’s attorney. Such a provision may be based on the following sample language:
The Contractor and the Contractor’s surety, if any, shall be liable for and shall pay the Owner the sums hereinafter stipulated as liquidated damages for each calendar day of delay until the Work is substantially complete: ________ ($__).
For further information on liquidated damages, penalties and bonus provisions, see AIA Document A503–2007, Guide for Supplementary Conditions.
Article 4 Contract Sum
§ 4.1 Enter the Contract Sum payable to the Contractor.
§ 4.2 Identify any alternates described in the Contract Documents and accepted by the Owner. If bidding or proposal documents permit the Owner to accept other alternates, subsequent to this document’s execution, attach a schedule showing the amount of each alternate and the date it expires.
§ 4.3 Identify unit prices and state quantity limitations, if any, to which the unit price will be applicable.
§ 4.4 Identify and state the amount of any allowances.
Article 5 Payments
§ 5.1.2 Insert the time period covered by each Application for Payment if it differs from the one given.
§ 5.1.3 Insert the time schedule for presenting Applications for Payment, and indicate due dates for making progress payments. The last day upon which Work may be included in an Application should normally be no less than 14 days prior to the payment date, in consideration of the 7 days required for the Architect’s evaluation of an Application and issuance of a Certificate for Payment and the time subsequently accorded the Owner to make Payment in Article 9 of A201. The Contractor may prefer a few additional days to prepare the Application. Due dates for payment should be acceptable to both the Owner and Contractor. They should allow sufficient time for the Contractor to prepare an Application for Payment, for the Architect to certify payment, and for the Owner to make payment of the Architect’s certified amount. They should also be in accordance with time limits established by this Article and Article 9 of A201–2007.
§ 188.8.131.52 Indicate the percent retain age, if any, to be withheld when computing the amount of each progress payment. The Owner frequently pays the Contractor the bulk of the earned sum when payments fall due, retaining a percentage to ensure faithful performance. These percentages may vary with circumstances and localities. The AIA endorses the practice of reducing retain age as rapidly as possible, consistent with the continued protection of all affected parties. See AIA Document A503–2007, Guide for Supplementary Conditions, for a complete discussion.
§ 184.108.40.206 Insert any additional retain age to be withheld from that portion of the Contract Sum allocable to materials and equipment stored at the site. Payment for materials stored off the site should be provided for in a specific agreement and enumerated in Section 8.6. Provisions regarding transportation to the site and insurance protecting the Owner’s interests should be included.
§ 5.1.8 Describe any arrangements to reduce or limit retain ages indicated in Sections 220.127.116.11 and 18.104.22.168, if not explained elsewhere in the Contract Documents. A provision for reducing retain age should provide that the reduction will be made only if the Architect judges that the Work is progressing satisfactorily. If the Contractor has furnished a bond, demonstration of the surety’s consent to reduction in or partial release of retain age must be provided before such reduction is effected. Use of AIA Document G707A™–1994 is recommended.
§ 5.2.2 Insert the date by which Owner shall make final payment, if it differs from the one stated. When final payment is requested, the Architect should ascertain that all claims have been settled or should define those which remain unsettled. The Architect should obtain the Contractor’s certification required by Article 9 of A201–2007 and must determine that, to the best of the Architect’s knowledge and belief and according to the Architect’s final inspection, the requirements of the Contract have been fulfilled.
Article 6 Dispute Resolution
§ 6.1 In this section, the Owner and Contractor may identify an Initial Decision Maker to render initial decisions on claims arising between them. If the parties do not identify an Initial Decision Maker, then the Architect will provide initial decisions.
§ 6.2 Select from three choices of binding dispute resolution: (1) arbitration, (2) litigation or (3) another method that the parties must identify. Other types of dispute resolution include a dispute resolution board or a mini-trial. For additional information about other methods of dispute resolution, refer to The Construction Industry’s Guide to Dispute Avoidance and Resolution, free online at www.adr.org.
Article 8 Miscellaneous Provisions
§ 8.2 Enter any agreed-upon interest rate for overdue payments.
§ 8.3 Identify the Owner’s representative and indicate how that person may be contacted.
§ 8.4 Identify the Contractor’s representative and indicate how that person may be contacted.
§ 8.6 Insert other contract provisions here.
Article 9 Enumeration of Contract Documents
A detailed enumeration of all Contract Documents must be made in this article. List additional documents in Section 9.1.7 that will form part of the Contract Documents.
EXECUTING THE AGREEMENT
The persons executing AIA Document A101–2007 should indicate the capacity in which they are acting (i.e., president, secretary, partner, etc.) and the authority under which they are executing the Agreement. Where appropriate, a copy of the resolution authorizing the individual to act on behalf of the firm or entity should be attached.