Main Menu
Significant Changes Made to AIA Construction Contracts

The most commonly used standard form construction contracts are issued by the American Institute of Architects (AIA). Recently, the general conditions provisions of the AIA standard form contracts underwent significant revisions. Most significantly, the A201 general conditions standard forms, which are common to most AIA construction contracts between owners and contractors, and between contractors and their subcontractors, were revised as follows:

1. Statute of Limitations

Previously, A201-1997 provided that the statute of limitations for claims against a contractor begins upon substantial completion of the construction project. This provision has been modified to provide that the statute of limitations will be established by applicable state law. The purpose of this revision is to allow for the “discovery rule,” which is followed by many states. Under the discovery rule, the statute of limitations commences when the owner discovers or should have discovered the contractor’s breach of contract. Although the A201-2007 allows the “discovery rule,” it also includes a 10 year “statute of repose” that provides that any claims against the contractor must be asserted within 10 years after substantial completion.

2. Architects

Previously, the AIA general conditions provisions prevented a party from joining the architect to any dispute between the owner and the contractor. The revised A201-2007 allows the architect or any other party “whose presence is required if complete relief is to be accorded at arbitration” to be joined in a dispute between the owner and the contractor that involves a “common question of fact or law.”

3. Dispute Resolution

The new revisions include a “check the box” dispute resolution provision that allows the parties to decide whether disputes will be resolved by arbitration, litigation or other dispute resolution means. Previously, the AIA contracts required that all disputes be decided by binding arbitration before the American Arbitration Association.

4. Ability to Pay

Previously, the AIA general conditions required the owner to furnish reasonable evidence to the contractor that the owner could pay amounts under the contract, both as a condition to starting work and as an ongoing requirement during the course of the project. Many owners complained about the obligation to continually provide such financial information during the project. The AIA provisions have been revised to provide that the owner is only obligated to provide evidence of the ability to pay where: the owner has failed to make payments to the contractor; the changes to the work materially change the contract; or the contractor has identified in writing a reasonable concern regarding the owner’s ability to pay.

5. Concealed Conditions

A201-2007 contains a revision that when a contractor encounters human remains or burial markers, archaeological sites or wetlands that the owner had not previously disclosed to the contractor, the contractor, upon discovering these concealed conditions, must immediately cease operations and provide notice to the owner and the architect. The owner is then obligated to obtain governmental approvals required to resume construction, and the contractor may request an adjustment of contract time and price.

6. Initial Decision Maker

Previously, the architect was designated as the initial decision maker with regard to any claims or disputes on the construction project. A201-2007 contains a blank for identification of the initial decision maker. The architect remains the initial decision maker if the parties do not identify a different initial decision maker.

7. Insurance Coverage

The new revisions also address insurance coverage. A201-2007 deletes the requirement for project management protective liability insurance and, instead, requires that the contractor name the owner, architect and the architect’s consultants as additional insureds under the contractor’s commercial liability coverage. In addition, the contractor must maintain completed operations coverage.

8. Payments to Subcontractors

A201-2007 imposes a reasonable time limit by requiring that the contractor make payments to subcontractors no later than seven days after receipt of payment from the owner. Previously, A207-1997 simply required “prompt payment.”

The AIA standard form contracts also contain two new documents, “C106-2007, Digital Data Licensing Agreement” and “A201-2007, Digital Data Protocol Exhibit,” which facilitate the transfer of digital and confidential data on design and construction projects.

  • Partner

    Mark is the Co-Chair of the Litigation Department, and he concentrates his practice in business litigation and dispute resolution. He has broad experience in contract, commercial, estate, real estate, trade secret, employee ...



Recent Posts




Back to Page