Demystifying Conditions of the Contract

Understanding and crafting Conditions of the Contract is crucial for design professionals. This comprehensive guide breaks down this complex topic into two essential components: General Conditions and Supplementary Conditions.

General Conditions: The Foundation of Contractual Clarity 

General Conditions are standardized clauses that govern various aspects of a construction contract. These include:

  • Defining the parties involved.
  • Managing changes in the work.
  • Setting timelines.
  • Addressing payments and project completion.
  • Ensuring adequate insurance and bonds.

These conditions often come in preprinted forms from organizations such as the American Institute of Architects (AIA), Engineers Joint Contract Documents Council (EJCDC), and Design/Build Institute of America (DBIA). Some owners, like school districts and large corporations, may have their own specific General Conditions. These documents are typically referenced rather than included in the Project Manual.

General Conditions are tried and tested, having been prepared by consensus committees and withstood the test of time and legal challenges, providing both the Owner and Design Professional with assurance in case of project issues.

Supplementary Conditions: Tailoring the Contract to Your Project 

General Conditions are generic and may require supplementation to meet project-specific requirements. Supplementary Conditions can include:

  • Addressing weather delays and extensions of time.
  • Understanding liquidated damages for project delays.
  • Exploring bonuses for early completion.
  • Determining insurance types and limits.
  • Incorporating equal opportunity employment statements.

Depending on the chosen General Conditions, terminology throughout the Project Manual may need modification to align with these conditions.

Special conditions may also be necessary, especially in state and local municipality projects that use standardized specifications for materials and methods. These special conditions modify those standard specifications.

Key Concepts for Crafting

To craft effective General and Supplementary Conditions, you need to grasp some fundamental concepts:

  • Construction Participants: Conditions of the Contract define the duties, obligations, and limitations of each party involved.

    • Owner: The entity offering the project and a signatory party to the construction contract. The Owner may differ from the Owner of the construction contract in cases where a landlord owns a building but a tenant handles interior finish-out.

    • Contractor or Construction Manager: The entity responsible for construction, typically employing subcontractors and sub-subcontractors for specific tasks.

    • Architect, Engineer, or Other Design Professional: The licensed entity responsible for design, Contract Documents, and often construction observation, even though they are not signatory parties to the construction contract.

  • Types of Construction Contracts: Different contract types cater to various owner needs and project requirements. Organizations like AIA, EJCDC, and DBIA offer standard contract forms.

    • Single Prime Contract: One Contractor or Construction Manager handles all the work.

    • Multiple Prime Contract: Multiple contractors or Construction Managers are selected for specific work portions, necessitating coordination.

    • Design/Build Contract: Both design and construction occur under one contract, which may involve a single entity or a partnership formed for the project.

In Summary: Mastering Contract Conditions

In summary, mastering Conditions of the Contract is vital for design professionals, ensuring smooth project execution and legal protection. Understanding the nuances of General and Supplementary Conditions, along with essential contract concepts, empowers professionals to navigate construction projects successfully. This knowledge is not only critical for successful project delivery but also for safeguarding your interests in the complex world of construction contracts.

Related SimpleSpecs Specification Template: 00 70 00 – Conditions of the Contract where General and Supplementary Conditions.