February 8, 2023

Prefabrication continues to grow in usage and impact. It is a hybrid of construction and manufacturing. Also, prefabrication includes on-site and off-site performance requirements. As such, several interesting legal issues arise that must be addressed contractually. Consequently, ConsensusDocs has just published the ConsensusDocs 253 Standard Agreement Between an Owner and Prefabricator.

The ConsensusDocs 253 is based upon the risk allocation principles in the ConsensusDocs 200 Standard Owner/Constructor Agreement and General Terms and Conditions. This new document empowers an Owner to contract directly with the Prefabricator with an off-the-shelf best practices standard agreement. The agreement presumes the most common type of prefabrication, in which a prefabricated component is made off-site at the prefabricator’s site, and then, that component is delivered and installed at the worksite. Some highlights include:

  • Establishes industry standard definitions for Fabrication Site, a prefabricated Component, and a prefabricated Storage Area;
  • Guides users to delineate work to be performed off-site versus at the worksite in an exhibit;
  • Specifies adequate storage areas that must be provided for prefabricated components;
  • Requires three days’ advanced notice for inspections of the Prefabricator’s site to protect sensitive proprietary information (§9.6);
  • Recognizes that a Prefabricator’s fabrication methods and methods may be confidential (§3.22 and §9.6);
  • Addresses warranty issues when a Prefabricator acts as a manufacturer versus providing other materials and equipment that are incorporated in the Work (§3.8);
  • Addresses several scenarios regarding the risk of loss of a prefabricated component during different stages of transportation and delivery (§3.10); and
  • Provides an option to require an upfront payment to account for the large capital outlays needed to make for prefabricated components (§9.1).