Real Estate Newsletter
AIA Standard Forms Designate the Architect as Arbiter of Disputes
Architects generally play three distinct roles in the construction process: (1) agent of the owner, (2) independent contractor and (3) arbiter. An architect serves as an arbiter to settle differences between the owner and contractor over the course of a construction project. Typically, the architect will serve as an arbiter only to the extent provided by the construction contract documents.
Efficient Dispute Resolution
Construction projects often involve the interaction of a variety of industry participants. Quite frequently, individuals spanning numerous disciplines are required to work together over extended periods of time. As a result, the contracts governing such projects often contain provisions that are subject to many differing interpretations.
In order to ensure the timely and efficient completion of a project, the construction industry has long recognized the need for an informed decision-maker to quickly and effectively resolve disputes that arise during construction.
AIA Standard Form Agreements
Many construction contracts grant the architect the initial authority to interpret contract documents in the event that a dispute arises between parties to the contract. For example, the American Institute of Architects (AIA) sells standard forms that designate the architect as the initial arbiter of disputes between the owner and the contractor, including Document A201 (“General Conditions of the Contract for Construction”) and Document B141 (“Standard Form of Agreement Between Owner and Architect”). These are among the most widely used and accepted construction documents in the industry.
In fact, the AIA sells between 300,000 to 400,000 copies of the A201 per year. Further, the AIA estimates that, for every document sold, at least nine illegal copies are reproduced. Even those parties that do not use the AIA documents in their entirety often use the forms as guides when drafting contracts.
After the architect reviews the parties’ respective claims, the architect will make a final decision that is binding upon the parties. Pursuant to the architect’s authority to settle disputes and in the interest of reaching a timely compromise between parties without the delay and expense of courtroom proceedings, courts generally do not allow opposing owners and contractors to arbitrate or litigate a claim until the architect has rendered a final decision on the matter. Even in cases where the architect’s decision is unacceptable to either party, the AIA standard forms call for formal mediation, and for arbitration if the mediation is unsuccessful.
Failure to Comply with Architect’s Decision
In general, the attempt by one of the parties to avoid or ignore the architect’s authority as decision-maker could limit the availability of alternative legal remedies. For example, a contractor (or less commonly an owner) who ignores the architect’s dispute resolution authority under the AIA scheme may encounter difficulties in subsequent attempts to pursue a legal claim.
Potential Conflict of Interest
Although architects possess the necessary technical expertise to render informed decisions in a timely fashion, there are concerns that potential conflicts of interest might arise, making it difficult for architects to resolve disputes in a fully neutral and independent fashion. For example, because the architect is typically paid by the owner and performs numerous tasks as the owner’s agent, the architect might be unfairly biased in favor of the owner. In addition, the architect is often asked to evaluate the sufficiency, accuracy and adequacy of the architect’s own plans and specifications.
AIA Code of Ethics and Professional Conduct
Despite these potential conflicts of interest, the AIA Code of Ethics and Professional Conduct deems it a violation for one of its members to render anything other than an impartial decision when acting as an independent arbiter. Therefore, an architect may face disciplinary action in for failing to act in an impartial manner when serving as an arbiter of disputes.
© 2024 NextClient.com, Inc. All rights reserved.
