Success on a construction project can rise or fall on the contract you choose. Remember, financial solvency often depends on it. If just one contract out of 10 goes bad, this might lead to a general contractor shutting its doors. So why should you choose ConsensusDocs over American Institute of Architects (AIA) standard construction contract documents? Making extensive global revisions is a technique to address some concerns, but it isn’t the best strategy and lessens the predictability offered by standard documents in the first place. This article explores the fundamental advantages that set ConsensusDocs contracts apart.
Mission
ConsensusDocs' goal is to write fair contacts that advance better project results. Fairness stems from neutralizing bias by giving all the stakeholders to the A/E/C industry an equal voice at the drafting table.
Role of the Owner, Passive Check-Payer or Decider
Owners possess an active role in ConsensusDocs. An Owner ultimately has the most to gain or lose in a construction project’s success because it is the Owner’s long-term capital asset. An Owner may delegate, to an architect, authority to approve change orders. However, decision-making authority defaults to the owner.
Communications
ConsensusDocs emphasizes direct party communications to facilitate positive relationships. Electronic communications, such as email, are allowed for project administration and formal notice.
Project Financial Information and Sharing Information
ConsensusDocs allows a builder to request and receive project financial information before and during construction. ConsensusDocs provides the industry’s only standard questionnaire and guidelines to help ask reasonable questions about project financing.
Writing Style and Timely Updates
ConsensusDocs contracts are written from the perspective that good legal writing is simply good writing. Clear and concise contract language helps the parties understand, administer, and interpret the contract. A distinguishing feature in ConsensusDocs is the integration of the general terms and conditions and the agreement into one document. This avoids conflict among the two documents. Responsibilities and obligations, such as indemnification, are reciprocal. So, what is good for the goose is good for the gander. ConsensusDocs revises its documents every 5 years, but also allows the flexibility for discrete revisions typically based on changes to case law or the insurance market. Timely updates keep users up to date.
Caselaw and Litigation
ConsensusDocs now possesses a successful 10-year track record. Billions of dollars in projects have been put in place using the documents. Not one reported case has been generated using ConsensusDocs – something that ConsensusDocs touts.
Dispute Mitigation vs Dispute Escalation
ConsensusDocs utilizes an innovative tier approach that requires the parties to talk with each other at the project and senior project level to mitigate claims before they are escalated to a formal claim. ConsensusDocs also employs innovative and effective dispute mitigation techniques such as a project neutral or a dispute review board (DRB).
Design Documents
ConsensusDocs provides owners with a balanced architectural agreement that isn’t written by an architectural association. ConsensusDocs 240 Owner/Design Professional balances a design professional’s IP rights and an owner’s need to build or renovate a project. An owner may continue a project if there is a dispute between the owner and architect provided payment for services performed has been paid. An architect retains their claim rights. Also, owners are given the option to negotiation and pay for the right to reuse design documents for future projects along with a waiver of claims against the architect.
The ConsensusDocs architect agreements provide the owner construction phase design documents that are sufficient “to bid and build the work.” Reciprocally, the design professional may rely upon the design services provided by others.
Conclusion
ConsensusDocs encourages direct party communications to build positive collaboration. Owners gain more control of their projects. Constructors are viewed as problem solvers rather than problem makers. Architects are treated fairly, but are not favored over others. As successful projects trend toward collaboration, contracts should reflect business relationships to build better.