On large construction projects, with several layers of contractors, there is the risk of conflicting contract provisions. For example, the owner’s architect may use an AIA contract, the general contractor may use its own contract with the subcontractors, and some subcontractors may use their own contract with subsubcontractors. With so many contracts, there are almost certainly conflicting provisions, be it relating to indemnity, insurance and waivers of damages. It is important to determine at the outset which contracts will control.
Form contracts, such ConsensusDocs, address this problem by setting forth the priority of contracts. For example: In the event of a conflict between this Standard Agreement as modified and the other Subcontract Documents, this Agreement shall govern.
Many AIA standard contracts include a provision that in the event of a dispute concerning the interpretation of the contract documents, the dispute must be submitted to the project architect or engineer for interpretation. The clause will also state that the project architect or engineer’s interpretation is be binding on the parties.
But, if you are not using a form contract, you can incorporate language to accomplish the same purpose. You could include language in your contract that simply states that if a conflict exists between your subcontract and other contracts on the project, your contract will control.
Take Away: As you review your next contract, watch out for conflicts and make sure you are addressing which contract language will control. It’s also a good idea to contact an experienced construction attorney to assist in drafting language that will clarify which contract will control.
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