Contract Change #9: Owner’s Right to Carry Out the Work (law note)

construction workerChange # 9 to the AIA A201 General Conditions has to deal with the Owner’s Right to Carry Out the Work.  [Click here for the previous post on AIA Contract Changes.]

In prior versions of the General Conditions, if a contractor defaulted and the Owner (after giving notice) opted to cure by carrying out the work itself, an appropriate Change Order would be issued.  However, a Change Order is a contract that requires an agreement by both the Owner and Contractor, and, obviously, Contractors were reluctant to agree that they were in default and responsible for a deductive change order.

The new Section 2.5 allows the Owner to carry out the work if the Architect approves, without a signed change order.  Instead, the Architect can withhold or nullify a payment to the Contractor (under Section 9.5.1) to reimburse the Owner for the work carried out.

If the Contractor disagrees with the actions of the Owner or the Architect, or the amounts claimed as costs to the Owner, the Contractor can institute a Claim under the Claims section (Article 15) of the 201.

Up tomorrow, Change #8– Direct Communications on the Construction Project.

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