10 Things to Avoid on your Commercial Project – Item #8: Wrong Agreement/Contract

The wrong agreement or contract is a pitfall to avoid in any transaction, but especially in construction. Never, never, ever let a contractor provide you with an agreement to sign. An initial proposal and bid are fine, but not a contract. These types of agreements are inevitably written to protect the contractor and their interests, not yours. As the Owner, it’s your project and your money. The contract should protect you, and you should be able to dictate the terms that are important for you. It should also be fair to the contractor. Courts do not look favorably at unrealistic clauses in contracts. The industry standard is a series of contracts developed by the American Institute of Architects (AIA). These contracts and supporting documents have been developed over decades and tried in courts throughout the world. Your architect and legal counsel can advise you as to the appropriate agreement and make any necessary modifications for your specific project or situation. The two most often utilized documents are:

• AIA-A201-2017 The Standard Form of Agreement Between Owner and Contractor
• and the
• AIA-A201-2017 General Conditions for Construction

These can be used in conjunction with other standardized AIA documents that protect all parties. These tried and true agreements are the bedrock of most construction projects and can be relied upon to create a fair and equitable agreement that is clear and concise for all parties involved. There are other options available from other sources, such as the Design Build Institute of America that may be appropriate for certain projects. Consult with your attorney before executing any agreement.