You are on page 1of 56

OAA Standard Contracts 2005

ARCHITECT - CLIENT CONTRACT

OAA Standard Contracts 2005

Agreement A record of what has been agreed upon.

OAA Standard Contracts 2005

Agreement You need to have agreed upon something before you can record that you have.

OAA Standard Contracts 2005

vs.

Agreement

Contract

OAA Standard Contracts 2005

Traditionally we refer to Contract as the instrument recording agreed terms and conditions between Owner and Contractor, and Agreement as the instrument recording agreed terms and conditions between Client and Architect, or between Architect and Consultant.

OAA Standard Contracts 2005

Forms of Contract

ORAL

Oral Contract
OAA Standard Contracts 2005
Not worth paper its written on If no witness hard to claim or defend Memories short and convenient Hardly ever a clear mutual understanding of each others expectations At best they increase the bank accounts of lawyers since they have to spend more time in litigation

OAA Standard Contracts 2005

Forms

Written

Written Contracts
OAA Standard Contracts 2005
All that oral contracts are not Signing a formal document emphasizes seriousness of the matter Contrary to argument against written contract, Clients are not intimidated Good business practice Often those who did not have one lament that fact later

Forms of Written Contracts


OAA Standard Contracts 2005
Single page (e.g. OAA 301) Architectural practices own letter agreement (unilateral contract ) Sign-back letter contract Owner standard contract Industry standard contract

OAA Standard Contracts 2005

Single Page Contract 301


1. To be used as interim agreement binding the parties until more detailed agreement can be arrived at. Allows Architect to proceed with the project. 2. As a last resort only when the alternative is an oral agreement - Not encouraged!

OAA Standard Contracts 2005

OAA Standard Contracts 2005

OAA Standard Contracts 2005

OAA Standard Contracts 2005

Architects Own Contract


OAA Standard Contracts 2005
Seldom contains the balanced, protective clauses (for both parties) Argued by users that other contracts offend and intimidate the client (The same clients who lost their being intimidated by launching litigation action!) Not always compatible with other documents (e.g. CCDC contracts between Owner and Contractor)

Clients Standard Contract


OAA Standard Contracts 2005
Often prepared by Owners legal counsel seeking to shift balance of risk to Architect If forced into a non Canadian Standard Form of Contract for Architectural Services - consult with both your own legal counsel and your insurer before signing.

Clients Standard Contracts


OAA Standard Contracts 2005

Beware of Double Jeopardy clauses:


- Architect will hold Owner harmless from all defects. - Architect will ensure that the building is built in complete conformance with all applicable codes, regulations, bylaws, etc. of all authorities having jurisdiction. - Architect will obtain building permit.

OAA Standard Contracts 2005

These types of statements are often considered as a warranty or guarantee and as such are exclusions in your insurance or indemnity policy. Accordingly, you are not covered but your client is provided with a cause of action (hence the double jeopardy).

Standard Documents
OAA Standard Contracts 2005

Strive to use the standard documents prepared for your use by your profession. They have stood the test of time, have had legal input, and are continually being updated to reflect changes in practice in law and in custom.

OAA Standard Contracts 2005

Standard Contracts
Document Nine
Canadian Standard Form of Agreement Between Architect and Consultant

OAA Standard Contracts 2005

Documents Six and Seven have been replaced by Document Six, 2002.

RAIC Document Six has been replaced in Ontario by OAA Standard Contract 600

OAA Standard Contracts 2005

Changes in Practice and technology as well as the need for a document that can be flexible, comprehensive and easily customizable to more closely reflect the realities of architectural practice today and tomorrow, prompted the need for a new standard document.

Document 600 is that document.

OAA Standard Contracts 2005

Document 600- An Overview


The OAA developed and published Mastering the Business of Architecture to support Ontario practices in 1999, and distributed it to all members. The MBA Kit, as it is often known, is intended to provide a business resource and tool to Ontario architects to support them operating in a more competitive, business environment. Part of the MBA Kit provides guidance on preparing a detailed scope of services for a project, then developing, negotiating and contracting the appropriate fee.

OAA Standard Contracts 2005

As we released the MBA Kit, we became aware of the new AIA B141 standard agreement, which provides much greater utility in scoping and describing services in detail, and more flexibility in reflecting fee arrangements than the then current Canadian version. On the recommendation of the OAA, the participants in the National Practice Program agreed to redevelop the Canadian standard form in a brand new format, similar to the AIA document.

OAA Standard Contracts 2005

Subsequent to publication of RAIC Six, 2002, a number of members expressed concerns in regard to the document. OAA Council directed staff to develop an Ontario based contract which led to document 600

OAA Standard Contracts 2005

Document 600 is subdivided into 5 distinct modules:

Cover
Authorizes use and protects copyright

A
Agreement Form Definitions

GC
General Conditions

SCH
Schedules A-Architects Services B-Client
Responsibilities

OAA Standard Contracts 2005

The Agreement is the only module requiring the parties to execute. The Cover, Agreement and Schedules are in Word format for maximum flexibility The definitions and General Conditions are in pdf. Changes, if necessary are made through agreement article A.18 or marking and initialing the hardcopy

OAA Standard Contracts 2005

Cover
Space is provided on the cover to identify the project and the project number

OAA Standard Contracts 2005

Agreement Form

OAA Standard Contracts 2005

Additional services are reserved for changes in scope of architectural services, and should be minimal.

OAA Standard Contracts 2005

GENERAL CONDITION 7.5


The client acknowledges that either the architect or the client may engage consultants on behalf of and for the benefit and convenience of the client; and agrees that the architect shall not be liable to the client, in contract or in tort, for the acts, omissions or errors of such consultants whether retained by the architect or the client. Nothing in this clause shall derogate from the architects duty of coordination.

OAA Standard Contracts 2005

SCH
Schedules
Architects Services Client Responsibilities

OAA Standard Contracts 2005

SCHEDULE A TO 600
ITEM

ARCHITECT'S SERVICES: FEE CLASS

CLIENT'S RESP.

N/A

Analyses of client's needs- review clients stated objectives and advise on viability of the project Statement of Requirements or Building Program- Set out the fundamental objectives of the project, including the interrelation of space allocations, the areas required for the spaces, specific materials and /or assemblies to be used, massing, time factors, cost implications, constraints, and any special design considerations required for the project.

OAA Standard Contracts 2005

Schedules The system is designed for maximum flexibility. Modules may be further separated into sub-modules grouping services by fee arrangement (e.g. fixed fee or percent of construction cost for a group of services; and time based for another group).

OAA Standard Contracts 2005

Some may prefer to have a column added to the side of the schedule of services with a fee noted alongside each item. In the alternative, groups of services may have a fee attached; and another alternative would be to not have any fee attached to the schedule other than what was noted in the agreement for the project.

OAA Standard Contracts 2005

Flexibility
Discuss menu with client and jointly customize the agreement

Prepare customized version and discuss proposed services and clients obligations with the client

OAA Standard Contracts 2005

Flexibility
Some may prefer to place $ value of services along each item Some may prefer to place hours for each service Some prefer no list of fees for service tasks

OAA Standard Contracts 2005

No Cherry Picking

OAA Standard Contracts 2005

IMPORTANT!
One important aspect of the main menu and schedule approach is that it provides an excellent vehicle with which you can use as a checklist to review with your client in detail the services you will be providing. The time taken to review the entire agreement including agreement form, Definitions, General Conditions, and the Schedules is perhaps the best investment you can make to avoid disagreements and to ensure that the expectations of both parties converge.

OAA Standard Contracts 2005

Services that were not easily reflected by previous versions of the standard agreement between Client and Architect can now be readily accommodated by appropriate customized schedules of Architects Services and Clients Obligations. Some members will prefer to review the entire main menu with their clients and together prepare the schedules. Others may prefer to prepare a customized schedule of services and review the schedule with the client - adding or subtracting services through dialogue.

OAA Standard Contracts 2005

Customize Expand on or delete list of services as required for each project/client

OAA Standard Contracts 2005

New for 2005 OAA 600 OAA 609*


GUIDES for 600 and 609*
(*609, Contract For Sub-consultant services, is anticipated to be issued at the end of 2005).

OAA Standard Contracts 2005

Summary
1. The contract is a RECORD of what has been agreed between the client and the architect. In order that this record may be made, the parties will have to have discussed their expectations of each others obligations and reached an accord.

OAA Standard Contracts 2005

Summary
2. Standard contracts prepared by your association serve as an excellent starting point for you to prepare a contract customized for your client and for your clients project. The final contract should be balanced and fair to both parties.

OAA Standard Contracts 2005

Summary
3. Do not enter into ORAL contracts. They offer very little or no protection to either party and are the source of disputes which can (and often do) escalate into serious and costly legal arguments.

Summary
OAA Standard Contracts 2005

4.

Avoid hybrid forms of contracts, particularly those drafted to transfer risk to parties in nontraditional ways. Avoid the practice of the letter agreement. Use as much as possible the professions standard contracts.

Summary
OAA Standard Contracts 2005

5.

Standard contracts are compatible with other standard documents recognized as such in the industry (CCDC documents, design-build documents 14 & 15, CCDC documents, etc.).

OAA Standard Contracts 2005

Summary
6. Document 600 is designed to be compatible with and complementary to the MBA Kit. Fees and services are more closely linked than previous versions.

OAA Standard Contracts 2005

Summary
7. Document 600 readily accommodates an expanded range of services including non-traditional services.

OAA Standard Contracts 2005

Summary
8. Document 600 provides architects with another tool for business and marketing opportunities.

OAA Standard Contracts 2005

Summary 9. The format is redesigned for ease of use and reference:


Document is separated into distinct modules
cover agreement definition general conditions schedules

Articles in the agreement and general conditions modules are identified by an alpha-numeric code for ease of reference

Summary
OAA Standard Contracts 2005

10. Additional services are minimized and relegated to unforeseen and unanticipated scope changes. Services not agreed to in the agreement are treated as change in scope and subject to adjustment to fees and time.

OAA Standard Contracts 2005

Summary
11.Electronic format makes the document readily accessible and easier to complete while maintaining control over the maintenance of it as a standard document.

Summary
OAA Standard Contracts 2005

12 As in all contractual relations, one of the


best investments of time is a careful, item by item discussion between architect and client as to the scope of services. It not only greatly reduces later opportunity for the client to introduce scope creep, but also serves to identify to the client the value of the architects services and increases the convergence of the expectations of the parties to the agreement. Document 600 facilitates such discussions by introduction of the list of services

OAA Standard Contracts 2005