ConsensusDocs recently introduced noteworthy updates to its most used prime and subcontract agreements, detailed here. In this article, we’ll take a closer look at the revisions made to the short forms, which are more frequently used than the long forms. These streamlined documents, particularly the ConsensusDocs 205 Agreement Between Owner and Constructor & General Conditions (Short Form), have undergone strategic changes to enhance clarity and efficiency while maintaining the integrity of essential terms and conditions.
Overview: The ConsensusDocs 205 stands as a compact, 15-page document that integrates the general terms and conditions and the agreement. Because the long-form ConsensusDocs agreements address issues in more contractual detail and have more innovative provisions, there are more revisions in the long-form agreements. This article details the 205 short-form revisions that focus on essential clauses while maintaining brevity.
- Article 4. The ethics section was shortened slightly. The revised language in the 205 matches the revision in the long-form agreement ConsensusDocs 200. This change is stylistic, not substantive.
- Section 5.1.10. This section now explicitly states that the owner has the authority to take actions beyond accepting or rejecting a submittal. In addition, it mandates that the Constructor must now provide a submittal schedule within 30 days of commencing the Work.
- Section 12.4.1. When cost-of-the-work plus overhead and profit are used to calculate the cost of change orders, the previous version of the agreement featured separate blanks for overhead and profit. Now, in the revised agreement, one figure is used to cover both overhead and profit. Owner groups requested this change.
- Definition of Days and Business Days. Days and Business days are now defined to avoid confusion and therefore capitalized. These terms were already defined in the long agreements.
- Section 15.3. The requirement for “existing structures” in the Builder’s Risk policy requirements for property insurance was removed. This change acknowledges that obtaining existing structure insurance through a Builder’s Risk policy with reasonable deductibles may not be feasible.
- Section 15.3.2. The terms “subcontractors” and “suppliers” were made lowercase because they are not defined. Note that fewer terms are defined in the short-form agreements.
- Section 15.3.4. Regarding the Constructor’s comprehensive general liability, instead of saying to the extent of the limits of the CGL Policy, it now reads “to the extent of proceeds paid.”
- Section 19.5.3. A reference to the statute of repose was added to time bar claims or causes heard in an arbitration. Some state caselaw has questioned if such time bars apply to arbitration. By addressing this explicitly in the contract, this confusion is avoided and makes it clear that the time bar should apply to arbitration as well as litigation.
- Definition of Prime Agreement. “Prime Agreement” is now a defined term and reference throughout the document.
- Section 10.6.2. This section, which gives the Subcontractor the right to request financial project financial information, has been moved into section 10.6. This is not a substantive change.
- Section 17.1. The 7-day notice requirement for the Subcontractor to Constructor is now triggered upon their “first recognizing the conditions” giving rise to the claim. Previously, it was triggered upon “knowledge of the facts.” This is more of a stylistic change to conform to the language used in other ConsensusDocs standard contracts rather than a substantive change.
- Section 17.8.3. A reference to the statute of repose was added to time bar claims or causes heard in arbitration. Some state caselaw has questioned if such time bars apply to arbitration. By addressing this explicitly in the contract, this confusion is avoided and makes it clear that the time bar should apply to arbitration as well as litigation.
Comments or questions about this article can be directed to Brian Perlberg, Executive Director and Senior Counsel, ConsensusDocs Coalition, at bperlberg@ConsensusDocs.org. All existing users will get to choose whether to use the new standard forms or the previous edition for the next 13 months.