Having the right agreement in place is paramount in any project. Having the wrong agreement in place or an agreement with incorrect or insufficient information can cost companies millions. Many construction projects require builders to tap into the large array of contracts housed by the American Institute of Architects (AIA). The size of the project can determine which AIA documents are relevant and necessary for the builder. While most of the AIA agreements are meant for larger projects, builders should be familiar with the ones that are used for smaller projects (more on these below). When a builder is faced with a small project where an agreement will be used, the first step is to decide which AIA agreement is appropriate.
The AIA has issued construction documents for over 100 years. Today, the AIA has nearly 200 forms and contracts that are used in the construction industry, and they generally are updated every ten years. While these form contracts are common in commercial construction, they are less common in residential construction and smaller projects. The AIA, however, has issued several form contracts designed specifically for use with less complex construction jobs.
The AIA family of forms are categorized alphabetically. The two most common categories are the A-Series contracts, which are referred to as owner and contractor agreements, and the B-series contracts, which are referred to as owner and architect agreements.
While the owner-contractor, A-Series, contracts often appear to be relatively short, because most of them incorporate 40 plus pages of general conditions, their length is deceiving. The AIA has a lengthy general conditions form, the A201, which sets forth the rights, responsibilities, and relationships of the owner, contractor, and architect.
Nevertheless, the AIA offers a few short form agreements that have internal general conditions and do not incorporate the bulky A201. Three of these short form agreements are the A104, A105, and A145
The AIA Document A104 is intended for use on medium sized construction projects of limited scope and complexity. It may be used for projects where payment is based on either a fixed price or the cost of the work plus a fee, with or without a guaranteed maximum price.
The A104 is considered a short form agreement because it is a stand-alone agreement that does not require the use of a separate general conditions document. If the owner and builder select either of the two cost-plus payment methods, the parties will need to complete an Exhibit A to the A104, which provides the detail for the cost of the project.
When using the A104, the corresponding owner/architect agreement is the B104.
The AIA Document A105 is for use on smaller projects that are modest in size and brief in duration, and where payment to the contractor is based on a fixed price. Like the A104, the A105 is also a stand-alone agreement that contains its own general conditions. When the AIA A105 is used, the B105 is the corresponding agreement between the owner and architect.
If the builder uses a short form AIA agreement on a project, the builder should be careful with related project contracts. For example, on AIA projects, builders generally use A401 as their subcontract. The problem is that the A401 incorporates the general conditions found in A201, while A104 does not. As a result, when the builder uses a short form agreement with the owner (“short form agreement”), the builder should seek legal advice so that appropriate modifications can be made to A401.
Additionally, modifications to the short form agreement are not binding on the architect. Thus, unless the architect’s contract is modified to coordinate with modifications to the short form agreement, the architect will provide project administration as stated in an unmodified short form agreement. Obviously, such a situation can cause problems. For this reason, the owner should make the necessary changes to its contract with the architect, so the architect’s contract is complimentary to any changes to the short form agreement.
For design-build projects, A145–2015 is intended to be used for a one- or two-family residential project and consists of the agreement portion and Exhibit A, a Design-Build Amendment that is executed when the owner and design-builder have agreed on the contract sum. A design-build project is one in which the owner contracts with a design-builder, and the design-builder is obligated to complete the design and construction of the project. The A145 is a streamlined document developed for use in residential design-build projects.
After selecting the right form, it is important to remember that the AIA family of documents have limitations from a builder’s perspective. These form AIA contracts, without modifications, do not comply with Texas residential construction law and do not fit every project. If you need assistance with an AIA contract, the attorneys at Brackett & Ellis, P.C. can assist you in making your construction contract work for you. Give us a call to schedule a consultation today – 817-338-1700.