June 12, 2023

Reaching an agreement on a construction contract that leads to a positive outcome for all parties involved – owner, builder, designer – should be the goal of your contract negotiations. What contract you start with as your foundation and which provisions you prioritize in your negotiations matter. On a webinar hosted by the Association of Corporate Counsel (ACC) entitled The Construction Tool-Kit for the In-House Counsel When Faced with a Construction Contract, Celestina Jimenez, Vice President & General Counsel at RK Industries, gave a brief overview of the three leading publishers of standard documents for construction, identified as the American Institute of Architects (AIA), ConsensusDocs, and the Engineers Joint Contract Documents Committee (EJCDC). She looks to provisions in ConsensusDocs to “come to a middle ground,” as they are “the best written to get to consensus.”  Make plans to attend ConsensusDocs’ June 14th webinar on contract negotiation strategies for subcontract agreements. Register here.

Construction contracts commonly start with an industry-standard document, then modifications are made. She commented that it is helpful when analyzing a contract to know which standard contract document was used as the base contract. Each standard document has its perspective and bias, according to Ms. Jimenez. She remarked that the ConsensusDocs standard construction contracts are more balanced.

In any negotiation, reaching an agreement on a specific provision may be difficult. Some practitioners find subscribing to multiple standard contract documents helpful in implementing effective contract negotiation strategies so that they can draw upon these standard provisions and cite to them authoritatively as industry-standard. For instance, in your contract negotiations, you may find that an architect’s copyright rights in the instruments of service are quite protective of the architect in the AIA B101 agreement. You might make custom changes to modify that contract agreement. Still, it may be more persuasive in your contract negotiations to use the authority of excerpting provisions of the ConsensusDocs 240 Owner and Design Professional Agreement.

In section 10.1, that agreement provides for the following:

OWNERSHIP OF TANGIBLE DOCUMENTS Owner shall receive ownership of the property rights, except for copyrights, of all documents, drawings, specifications, electronic data, and information (“Documents”) prepared, provided, or procured by Design Professional or by consultants retained by Design Professional and distributed to Owner for this Project, upon making the final payment to Design Professional or in the event of termination under ARTICLE 8, upon payment for all sums due to Design Professional under ARTICLE 8. Owner’s acquisition of the copyright shall be subject to the Owner’s making of all payments required by this Agreement.

If you have any questions or comments to this article, contact Brian Perlberg, ConsensusDocs Coalition Executive Director & Senior Counsel.