1. Overview of Significant Contract
Issues
Renovation, Remodeling & Repair of
Buildings
Robert P. Hall, Jr., Esq.

2. Introduction
• What is a contract?
• Classification of construction contracts
• Use of standard forms
• Why is a lawyer recommended?
• List of separate “contract” documents
• General comments—”delivery systems”

3. What is a contract?
• Function—record the terms of the agreement----
(a) should define the scope and price of the
services and product to be provided—(b) should
allocate the risks between owner and contractor,
and (c) should provide level of prediction when
selected events arise
• What “if” certain events arise—what will be the
result

4. General Conditions-Table of
Contents
• General Provisions
• Owner
• Contractor
• Administration of the
contract
• Subcontractors
• Construction by owner
• Changes in the Work
• Time
• Payments and completion
• Protection of property
• Disputes
• Indemnification
• Insurance/Bonds
• Correction of Work
• Termination
• Attorney Fees

5. Classification of Contracts
• Lump sum—complete work for a fixed
price
• Cost plus—contractor paid for all costs
plus a stated fee—or time/materials—all
costs plus stated overhead and profit
• Cost up to a maximum guaranteed price-
contractor gets costs plus overhead/profit—
but only up to a maximum limit

6. Delivery Systems
• Design Bid—traditional—architect provides
plans—general contractor provides bid. Owner
enters into separate contract with architect and
general contractor
• Design Build—Owner contracts with one firm
who handles design and construction
• Construction Manager—Owner contracts with
one firm who in turn hires designers and
contractors

7. Use of Standard Forms
• Preprinted form agreement prepared by industry
groups—such as architect and contractor
organizations—eg—AIA—AGC
• In theory—could substitute for a tailored
agreement—save attorney fees
• Reflect bias of the industry group who prepared
them—but they reflect the industry’s
negotiating position—important to generally
understand

8. Standard Forms--Advantages
• Advantages—easier and less expensive to
prepare—even with an addendum
• Easier to understand—interpreted by
courts-owner can get a higher level of
predictability in the event of a dispute
• In author’s experience—contractor’s more
agreeable to industry forms with
addendums than specially tailored
agreements

9. Standard Forms--Disadvantages
• Reflects bias of the group who prepares them
• Not prepared for common interest developments
—some view them as not applicable to such
projects
• Changes reflected in the addendum to the standard
form may make understanding of the total
agreement when read together difficult

10. Standard Forms—General
Comments
• Whether used or not—they reflect the
organization’s current position on standard
contract issues—their use will provide a good
reference point for negotiations
• As discussed below—the most used form—AIA—
has undergone significant changes from the 1987
to 1997 and now to 2007 versions

11. Separate Contract Documents
• Main agreement—(eg—AIA 101)—brief
form –describes the project—scope—and
price—incorporates other contract forms
• General Conditions—most important
contract document—mostly legal—
provisions of general application
• Special conditions—technical requirements
• Plans--Specifications

12. AIA “family” of documents
• Contracts labels—main documents--”A” series—
owner—contractor—”B” series-owner—architect
• G Series—standard forms during the progress of
the work—eg—change orders—request for
clarifications etc.—
• AIA form A201—attempts to set forth rules
and procedures for virtually all aspects of the
work—most important legal document—

13. General Conditions (e.g.
AIA201)—key provisions
• 1.1.1—contract documents—make sure
now more than ever that all contract
documents are identified
• 1.2—intent of contract documents
• 1.3—ownership and use of drawings
• 2.1 and 2.2—information and services
required by the Owner

14. General Conditions (key
provisions—continued)
• 2.3 and 14.2—owner’s right to stop the
work or terminate the contract
• 3.2—review of contract documents and
field conditions by contractor (key new
1997 change)
• 3.5 warranty provisions
• 3.9--superintendent

15. General Conditions (Continued)
• 3.12—shop drawings—product data and
samples
• 3.18—indemnification issues
• 4.1—architect issues
• 4.3-4.5—claims and disputes (see next
discussion)
• 7.1-7.3—changes in the work

16. General Conditions (Continued)
• 9.2—schedule of values
• 9.3—applications for payment
• 9.8-substantial completion
• 9.10—final payment and related issues
• Article 11—insurance and bonds
• Attorney fee provision/may need to be
added

17. Architect Agreement—general
comments
• additional services
issue
• obligation to design
within budget
• ownership of and use
of documents
• indemnification
• architect sign off letter
• waiver of
consequential damages
• arbitration of disputes
• Owner’s review and
approval of the design
before the next of the
repair process starts