Chapter 5 of CSI Project Delivery Practice Guide (PDPG) outlines key terms and concepts of Contracts and Legal Issues, which are on the Construction Documents Technologists (CDT) Exam.

Two key terms to know are: contract and agreement, which tend to be used interchangeably. Fortunately, for purposes of the PDPG, these terms have the same meaning. Agreements are the foundation for establishing, organizing, and managing activities involved in the design and construction of a facilitiy or other building structure. While having an agreement between two parties is not usually mandatory, it is good and prudent business practice to have them, even for small projects.

Contracts accomplish the following:

• the expectations of each party to be protected -duty to perform according to agreed-upon terms
• a "meeting of the minds"
• the binding of two parties until the agreement terms are fulfilled
• the possibility of enforcement by the courts if disputes or conflicts arise
  (PDPG - Chapter 5, p. 67)

Owner, Architect/Engineer, and Contractor Tripartite

Note Figure 5.1 on the tripartite relationship (PDPG - Chapter 5, p. 68)

Elements of a Contract

A contract is established when two parties agree to be bound in a relationship defined by obligation or promises. Usually, one party agrees to pay money to another party that will provide a service or product - in a sense, design and construction services are provided to accomplish a product, which is the building.
(PDPG - Chapter 5, p. 68)

Contracts generally include the following basics elements:
(See p. 68-69 for detailed description of each.)

• Offer and Acceptance
• Mutual Consent
• Capacity
• Scope of Work
• Consideration
• Good Faith
• Legality
• Remedy for Breach of Contract
• Written
• Signatures

Standard Agreement Forms

Know the four different associations, their contracts, and differences from each other:

• American Institute of Architects (AIA; aiadocuments.org)
  • Document Series (Types A to G)
  • Document Families (10 types)
• Engineers Joint Contract Documents Committee (EJCDC; content.asce.org)
  a coalition between the American Council of Engineering Companies (ACEC), American Society of Civil Engineers (ASCE), The Associated General Contractors of America (AGC), and the National Society of Professional Engineers (NSPE)
• Design-Build Industry of America (DBIA; dbia.org)
• Associated General Contractors of America (AGC; agc.org)
• Construction Specifications Institute (CSI; csinet.org)
   

Example - Contract between Owner and Contractor
Know the provisions included in a typical contract. (Review p. 71-73.)

Contract Types
Know structure and contract types for contractural relationships.(Review p. 74-76.)

• Single-Prime Contract
• Multiple-Prime Contracts
   

Form of Agreement

Compatibility of Agreements

Design Team Coordination

Important Legal Issues

• Need for Written Historical Record
• Professional Standard of Care
• Professional Negligence
• Compliance with Building Codes, Laws, and Regulations
• Spearin Doctrine
• Actions Can Change the Terms of a Contract
• Interpretations by the Courts
   

Image Credit: Getty Images (Martin Barraud)

Image Credit: Construction Specificatoins Institute