This is the second in a series of articles discussing the 1997 editions of AIA documents issued for publication this October. The first article outlined the general scope of the many changes made by the new documents. Future articles will deal with particular changes affecting contractors, design professionals, and owners.
Thousands of words and hundreds of articles will be written about the significant changes caused by the publication of the 1997 AIA construction documents. Commentators will wax eloquent about concepts like design delegation, mutual waiver of consequential damages, changes in indemnification obligations, and more. But perhaps the biggest change from a day-to-day, practical perspective is embodied in one word. Rarely has a one word change in a document had the potential for such a dramatic alteration of the posture of present and future disputes as the change from "intended" to "indicated" in the 1997 edition of AIA Document A201, General Conditions of the Contract for Construction.
Some history is instructive. Article 1.2.3 of the 1976 edition of A201 read as follows:
The intent of the Contract Documents is to include all items necessary for the proper execution and completion of the Work. The Contract Documents are complementary, and what is required by any one shall be as binding as if required by all. Work not covered in the Contract Documents will not be required unless it is consistent therewith and is reasonably inferable therefrom as being necessary to produce the intended results. Words and abbreviations which have well-known technical or trade meanings are used in the Contract Documents in accordance with such recognized meanings.
The same Article 1.2.3 in the 1987 edition of A201 read as follows:
The intent of the Contract Documents is to include all items necessary for the proper execution and completion of the Work by the Contractor. The Contract Documents are complementary, and what is required by any one shall be as binding as if required by all; performance by the Contractor shall be required only to the extent consistent with the Contract Documents and reasonably inferable from them as being necessary to produce the intended results.
The corresponding Article in the 1997 edition of A201 (Article 1.2.1) is exactly the same as the 1987 Article except for one thing — the word "intended" in the last line has been changed to "indicated". The word "intended", and the concept of "intended results" was also present in the 1963, 1967, and 1970 versions of A201. In fact, every general conditions document for building construction issued by the AIA as a national document in the past has required the contractor to provide "intended" results. Now, for the first time, the results must be "indicated" in the Contract Documents. According to the negotiators, the contractor need no longer guess at the intent of the documents — the contractor can rely on what is shown on the drawings and written in the specifications. A very significant change indeed.
We are aware of many cases where design professionals have used the hammer of "intent" where intent was only subjective. There are reported cases in which "intent" has been used: to require arbitration of disputes where arbitration was not clear; to require contractors to provide sophisticated sprinkler systems, or HVAC systems, or security systems, where the only indication of such a requirement was a sprinkler head, or outlet, or sensor on a drawing; to require arbitration in instances where essential parties refused to be bound; to require a sewer connection from the street when none was indicated; and even to require complete building systems when the basis of the contract as bid was a preliminary sample layout. The presence of "intent" language has forced courts to write convoluted decisions in which documents were construed to be "complementary" only if they were "consistent", and "minor work" was held to be required even though not described in the drawings because it was not only "necessary" but also "consistent" and therefore must have been "intended".
We expect that contractors will have a much stronger argument for additional compensation for "extra work" if A201 (1997) is in use. If components, systems, bracing, fixtures, etc. are not specifically shown on the drawings, but are required during construction by code-enforcing agencies, the owner, or a design professional, a strong argument will be available that only what can be expressly found in the contract documents has been included in the original price. Similarly, if the word "indicated" is stricken from the document and the old word "intended" is put in its place, a strong indication of subjective contractual intent will be available to the owner and its design professional to require compliance without compensation for "extra work".
Careful reading of these new documents will be necessary. Even single words can have profound effects on the fortunes of the parties.
This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations. For more information on this topic, please contact marketing@jordanramis.com or call (888) 598-7070.