Revised Contracts Lay the Foundation for Successful Projects
Changes to the ConsensusDocs Coalition’s contracts are a response to the industry’s evolution and shift in best practices.
Contracts are the foundation of every project. While no contract can guarantee a successful project, a contract that is well drafted is the first step to building a better project.
The mission of the ConsensusDocs Coalition, a coalition of 40 leading design and construction industry associations, is to publish contracts that reflect and promote the objectives of all parties, rather than the objectives of individual stakeholders, to advance the best interests of the project. Recently, the coalition published comprehensive revisions to many of its prime and subcontract agreements. ConsensusDocs’ revised contracts address changes and best-practice industry developments, including design, construction, insurance, legal, technology and terminology.
“As the industry transitions, so must our documents,” explains Philip E. Beck, former chair of the ConsensusDocs Content Advisory Council (2014-2015) and partner with Smith, Currie & Hancock LLP. “These documents must facilitate more collaborative, integrated, sustainable, technology-driven project delivery approaches that build on lean, green and sustainable principles. The coalition is focused on more practical, shorter and succinct contracts that emphasize clarity and transparency.”
These reasons are why the coalition began publishing contract forms, and the organization will continue creating new forms and revising existing forms that suit the industry as it changes. Whether it’s new or revised, ConsensusDocs contract forms ensure industry stakeholders have the best foundation possible for their projects.
“While none of the revisions reflects a major shift in the philosophy or guiding principles behind ConsensusDocs, they do include revisions and improvements designed to keep pace with industry changes and best practices,” states Carrie L. Ciliberto, Esq., deputy executive director & counsel for ConsensusDocs.
The revised documents clarify and expand on the following:
- Termination for Convenience: Circumstances under which a termination for convenience is permitted, circumstances under which a termination for default can be converted to a termination for convenience, and the potential consequences of doing so, are revised.
- Schedule: References are added to Critical Path Method Scheduling concepts and principles.
- Changes & Directives: Accommodate changes with no time or cost impact and expands the term to encompass owners’ written directives.
- Indemnification: Requires indemnification for intentional acts and clarifies the definition of “Others.”
- Insurance: Default is for the constructor, rather than the owner, to purchase the builder’s risk insurance policy.
- Bonding: Bond penal sum will no longer automatically float with changes to the contract amount.
- Payment: Revises “cost of the work” applicable to work performed on a cost-reimbursable basis as well as changes concerning contingent payment.
- Dispute Resolution: A “check-the-box” option is provided for parties to select who will administer any mediation.
- Owner/Design Professional Relationship: Eliminates language which could have been interpreted to create a fiduciary relationship between the owner and its design professional.
The comprehensive revisions to various key ConsensusDocs forms represent the culmination of thousands of volunteer hours invested by the ConsensusDocs Content Advisory Council, the significant contributions and support of the 40 member organizations, as well as invaluable feedback of industry participants, attorneys, and other design, construction, insurance and surety professionals who use the ConsensusDocs family of documents.
The coalition will continue to release new and updated contract documents throughout 2017 and beyond to further its mission of helping the industry build a better way.
Coming in early 2017:
Visit www.ConsensusDocs.org for more information or to download a free preview sample