In the complex and evolving world of construction projects, disputes are often inevitable. However, their resolution doesn’t have to be time-consuming or contentious. By leveraging tools like ConsensusDocs’ standard contracts and the American Arbitration Association’s® (AAA®) ClauseBuilder AI, construction stakeholders can create customized alternative dispute resolution (ADR) clauses that are both fair and efficient.
What is ConsensusDocs?
ConsensusDocs is a suite of standardized construction contract templates that are developed collaboratively by leading construction industry organizations. These documents are designed to promote best practices and reduce disputes by providing balanced and comprehensive contract language. Contractors, subcontractors, owners and legal professionals rely on ConsensusDocs for clarity and consistency in their contractual agreements.
One of ConsensusDocs’ key features is its flexibility. While the templates offer standardized provisions, they are not rigid which allows users to customize terms to meet the specific needs of their projects.
AAA ClauseBuilder AI
ClauseBuilder AI is a groundbreaking tool, launched by the AAA, which streamlines the drafting of arbitration and mediation clauses. The free tool is designed for legal professionals and anyone who needs help drafting arbitration and mediation clauses. Using generative AI, ClauseBuilder AI enables parties to tailor ADR clauses to their unique needs. Users can select preferences for key arbitration components, such as:
- Number of arbitrators
- Method for selecting arbitrators or mediators
- Governing rules and locale
- Confidentiality provisions
- Time limits for proceedings
ClauseBuilder AI simplifies the clause-drafting process, reducing the time and effort needed to create robust ADR language.
Why Combine ConsensusDocs and ClauseBuilder AI?
While ConsensusDocs provides the foundational contract structure, it may not always include tailored ADR terms that suit the nuances of a particular project or partnership. This is where ClauseBuilder AI adds immense value.
By integrating ClauseBuilder AI with ConsensusDocs, stakeholders can:
Enhance Customization:
Start with a ConsensusDocs contract and use ClauseBuilder AI to refine the ADR clause, making sure it aligns with project requirements.
Increase Efficiency:
Both tools streamline drafting processes. ConsensusDocs eliminates the need to start from scratch, while ClauseBuilder AI builds on standard ADR language to include arbitration- and mediation-specific options.
Reduce Risk of Disputes:
Tailored ADR clauses foster clarity and predictability, minimizing ambiguities that could otherwise escalate into conflicts.
Ensure Industry-Approved Language:
ConsensusDocs templates are widely trusted by industry professionals, and the AAA’s ClauseBuilder AI can provide that arbitrations and mediations are administered under the AAA Construction Arbitration Rules and Mediation Procedures, the most widely used set of ADR rules in construction.
Steps to Tailor Construction ADR Clauses
Start with ConsensusDocs:
Select the appropriate contract template from the ConsensusDocs library. For example, the ConsensusDocs 200 Owner/Constructor Agreement with General Conditions includes a default dispute resolution clause. For AAA-administrated arbitration, look specifically at §12.5.1.2.
Review Project Needs:
Evaluate whether the default arbitration and mediation language meets the needs of your specific project. Consider factors like project size, complexity, and timelines.
Access ClauseBuilder AI:
Use ClauseBuilder AI to customize the ADR clause. The intuitive platform will guide you through options such as:
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- Single vs. panel arbitrators
- Selection process and qualifications for arbitrators or mediators
- Virtual or in-person proceedings
- Expedited timelines for resolution
Integrate into ConsensusDocs:
Once finalized, integrate the tailored ADR clause back into your ConsensusDocs agreement. This ensures a seamless blend of standardized contract language and bespoke dispute resolution terms.
Collaborate and Review:
Share the revised contract with all stakeholders for review and approval. Tools like ConsensusDocs’ collaborative features can simplify this process.
A Practical Example
Consider a large-scale construction project involving multiple subcontractors The ConsensusDocs 750 Standard Subcontract Agreement might serve as the base contract. Using ClauseBuilder AI, the ADR clause could be tailored to:
- Require a panel of three arbitrators with industry-specific experience
- For smaller disputes, include a 90-day expedited timeline for hearings, possibly after mediation
- Include an option for virtual hearings and conferences to reduce costs and delays
- Clarify if other parties may be joined to an arbitration.
By integrating these customizations, parties can be confident that any disputes are resolved efficiently, without derailing project schedules or budgets.
The Future of Construction Dispute Resolution
Combining the strengths of ConsensusDocs and ClauseBuilder AI represents a significant step forward in modernizing construction contract management and dispute resolution. With these tools, stakeholders can mitigate risks, streamline processes, and foster collaboration—all while ensuring their dispute resolution mechanisms are tailored to their unique needs.
As the construction industry continues to embrace innovation, tools like ConsensusDocs and ClauseBuilder AI are leading the way, offering solutions that save time, reduce conflict, and promote fairness in every project.
For additional information about this article please send comments or questions to Rod Toben, Vice President at AAA: TobenR@adr.org. Brian Perlberg, ConsensusDocs’ Executive Director & Senior Counsel sits on the AAA National Construction Dispute Resolution Committee (NCDRC) of the AAA. More info here. He can also be reached at bperlberg@ConsensusDocs.org about this article.