Category Archives: Law Notes

Which Contract Form Should You Use? (Guest Post)

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Nathan Hinch

Today’s Guest Post is by Nathan B. Hinch, an associate at Mueller & Reece, LLC in Bloomington, Illinois, concentrating in the practice of commercial, construction, environmental, and real estate law.  He can be reached at nhinch@muellerreece.com and on twitter @NathanHinch. 

 Form Construction Contracts – How Do They Compare, and How Should They Be Used?

By Nathan B. Hinch

Imagine that you are a contractor from the mythical State of Verbalville, a land where the handshake deal is the norm and no one ever puts anything in writing.  If a developer/owner awarded you a project and asked you to sign an AIA Document A101™ form construction contract, along with AIA Document A201™ General Conditions, would you sign it without reading the document?  Of course not.  Assuming that you were willing to consider bucking the verbal trend and sign the document at all, you would likely read it over very carefully first.  You might also consult an attorney, to help you understand the potential risks and liability issues involved with the contract, including the enforceability of the contract under Verbalville State law, and suggest changes to the document.

Now imagine that you are a contractor in my home State of Illinois and are awarded a project in North Carolina.  If the developer/owner handed you a ConsensusDOCS® 200 form construction contract with general conditions and asked you to sign, would you do so without reading it?  Would you consult a professional attorney before signing?  What if you were familiar with the form documents from your work in Illinois?  Would it matter if it was an EJCDC document instead?

I have worked with AIA, ConsensusDOCS®, and EJCDC form documents, and all three are excellent resources that in the right hands can help save time and money for construction projects.  But here’s the point – form contracts are wonderful tools that can help allocate risk and clarify the roles and responsibilities of the parties, but that is all they are.

In the construction field, the leading form contracts have been drafted by teams of experts representing the interest groups in general and supporting teams of attorneys.  If you have never used or read one of these before, I would encourage you to take an evening and read through at least one of those mentioned above.  Given the detail of the documents, it may be difficult to imagine that these forms, without editing, are likely not specific enough for your project.  But keep in mind as you read that these are national forms and are meant to be of use throughout the U.S.  By definition these forms do not generally consider 1) variations in State law requirements and 2) your particular project needs or goals.  For that reason, credible forms such as those produced by AIA, ConsensusDOCS®, or EJCDC will encourage users to consult an attorney before using the document for specific projects.  They are not meant for “plug and play” use.

For a great reference comparing these forms, see Gillies, Heckman, and Perlberg, THE Construction Contracts Book: How to Find Common Ground in Negotiating Design and Construction Clauses, American Bar Association 2008.  The EJCDC and ConsensusDOCS websites both provide a matrix from this book for PDF download.  The book may be purchased from the ABA website here.

[Ed note:  I second Nathan’s book recommendation, which is a great resource for anyone considering the pros and cons of each set of form documents.  You can sometimes find the book much cheaper from your usual big online book site, so check around]

Nathan and I look forward to answering your comments, thoughts, and questions.  Drop us a note!

 

ConsensusDocs v. AIA: a useful chart (Tue Tip)

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one large and one small strawberry

Which strawberry (er, form contract) will YOU choose?

Here is a handy comparison chart  common ConsensusDocs forms to their standard AIA counterparts.

The chart is produced by the folks at ConsensusDocs, so I’m sure any ambiguities were interpreted in their favor.  That being said, if you are considering using a different standard form contract for your next project, you might want to check it out!

Have you taken the plunge into the ConsensusDocs?  Prefer to stick by the tried and true AIA documents?  Are you an EJCDC maverick instead?  Drop me a line to tell me why you use the contract you do.

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Photo (c) This is Chris via Creative Commons License.

S.Korea strengthens Building Code after Quake

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Korea

 

As an update to my post on the Japanese earthquake, there is news from South Korea that the government there is already working to strengthen quake-resistant capacity. 

“We are seeking to revise a construction law to strengthen quake-resistant capacity for two-story and smaller buildings,” the land and transportation ministry said. “The government will complete its final plan for that by next week.”

Under current Korean law, only large buildings with more than two stories and floor space of more than 1,000 square meters are required to be built according to quake-resistant guidelines, and the ministry is looking to expand the quake-resistent guidelines to smaller buildings.  Currently,  smaller structures are not subject to the requirement, even though they make up 84% of the total construction.  

The U.S. is unlikely to adopt new standards in such a lightening fashion.

Comments? Questions?  Drop me a line, or follow me on Twitter @melissabrumback

Japan Earthquake: Engineering that saved lives

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globe showing earthquake activity

Photo: NASA. Cumulative Earthquake Activity (1960-1995).

The earthquake that hit Japan one week ago today [note: this article was originally published on March 18, 2011], which had a reported  magnitude of 8.9, ranks as the 7th largest earthquake ever recorded, and the death toll continues to rise from the trifecta of earthquake, tsunami, and nuclear power issues.    The death toll could have been even worse, however, without the strict Japanese Building Codes which doubtless saved thousands of lives.

According to the New York Times, such features as extra steel bracing, giant rubber pads and embedded hydraulic shock absorbers in high buildings make modern Japanese buildings among the sturdiest in the world during a major earthquake.   Japan has such strict building codes because it is located in the “Ring of Fire,” where over 90% of the world’s total earthquakes occur.

John Wilson of Swinburne University (Melbourne) Centre for Sustainable Infrastructure says Japan’s “stringent” building regulations make the country well-prepared for earthquakes and tsunamis.  “[Building codes] were tightened up a lot in the 1980s – most of the buildings built over the last 30 years in Japan will be subject to very tight seismic regulations,” he said.  “They are designed for quite a high lateral force, to allow for the forces that get generated from such earthquakes… but also in many buildings they add additional features such as additional damping in the buildings to absorb some of the energy.”

During the earthquake, despite being hundreds of miles from the epicenter, Tokyo’s tall buildings literally swayed like trees as the quake shook the ground.  According to structural engineer Bill Faschan:  “The basic idea, particularly (for) a tall building, is it’s supposed to act like a tree. A tree in the wind, it sways back and forth. And in a seismic event, it’s very similar. Obviously, the ground (is) shaking as opposed to the building being moved back and forth by the wind, but (it’s) the same idea. It’s supposed to move. It’s supposed to give.”

Is the U.S. ready for a big earthquake?

Not according to some experts.  Even in the more earthquake-prone areas such as California, they say, the U.S. is far behind Japan in the building technology.  As Donald R. Prothero with the L.A. Times pointed out:

Although California building codes are among the most stringent in the United States (thanks to what the 1933 Long Beach quake, which destroyed nearly all of our unreinforced masonry buildings), they don’t begin to match the standards demanded in Japan. Just consider the high overpasses where the 5 and 14 Freeways meet — which fell in the 1971 Sylmar quake; their replacements fell in the 1994 Northridge quake — and you begin to realize just how vulnerable our infrastructure is. And those quakes were only 6.6 and 6.7 in magnitude.

What comes next for the Building Codes?

Will U.S. jurisdictions create more stringent Building Codes after seeing the Japanese earthquake’s damage?  Although California does take  the likelihood of earthquakes into account its Code, will it now tighten them further?

Drop me a line in the comments to discuss this or any other Construction law topic.  And don’t forget to sign up for email delivery of blog posts directly to your mailbox. 

Friday Extra:  Check out this Blog Post for a simple to understand explanation of the science behind Japan’s earthquake.