oaa standard contracts 2005
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ARCHITECT - CLIENT CONTRACT
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Agreement
“A record of what has been agreed upon.”
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“You need to have agreed upon something before you can record
that you have.”
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“Agreement”
vs.
“Contract”
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005 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.
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Forms of Contract
ORAL
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Oral Contract
• Not worth paper it’s written on
• If no witness hard to claim or defend
• Memories short and convenient
• Hardly ever a clear mutual understanding of each other’s expectations
• At best they increase the bank accounts of lawyers since they have to spend more time in litigation
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Forms
Written
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Written Contracts
• 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
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Forms of Written Contracts
• Single page (e.g. OAA 301)
• Architectural practice’s own ‘letter agreement ‘(unilateral contract )
• Sign-back letter contract
• Owner “standard” contract
• Industry standard contract
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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!
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Architect’s “Own” Contract
• 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)
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Client’s “Standard” Contract
• Often prepared by Owner’s 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.
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Client’s “Standard” Contracts
•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.”
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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).
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Standard Documents
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.
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DocumentNine
Canadian StandardForm of
AgreementBetweenArchitect
andConsultant
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005 Documents Six and Seven have been
replaced by Document Six, 2002.
RAIC Document Six has been replaced in Ontario by OAA
Standard Contract 600
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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.
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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.
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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.
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• 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
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Document 600 is subdivided into 5 distinct modules:
CoverAuthorizes
use and protects
copyright
AAgreement
FormDefinitions
GCGeneral
Conditions
SCHSchedules
A-Architect’sServicesB-Client
Responsibilities
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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
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Space is provided on the cover to identify the project and the project number
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A
Agreement Form
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• Additional services are reserved for changes in scope of architectural services, and should be minimal.
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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 architect’s duty of coordination.
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SCH
SchedulesArchitect’s Services
Client Responsibilities
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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.
Analyses of client's needs- review client’s stated objectives and advise on viability of the project
N/ACLIENT'S RESP.
ARCHITECT'S SERVICES:
FEE CLASS
ITEM
SCHEDULE A TO 600
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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).
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005 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.
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• Discuss menu with client and jointly customize the agreement
• Prepare customized version and discuss proposed services and client’s obligations with the
client
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• 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
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No ‘Cherry Picking’
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005 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.
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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 Architect’s Services and Client’s 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.
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Customize
Expand on or delete list of services as required for each
project/client
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New for 2005OAA 600OAA 609*
GUIDES for 600 and 609*(*609, Contract For Sub-consultant services, is anticipated
to be issued at the end of 2005).
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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 other’s obligations and reached an accord.
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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 client’s project. The final contract should be balanced and fair to bothparties.
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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.
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Summary
4. Avoid hybrid forms of contracts, particularly those drafted totransfer risk to parties in non-traditional ways.
Avoid the practice of the “letteragreement”. Use as much as possible the profession’s standardcontracts.
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Summary
5. Standard contracts are compatiblewith other standard documentsrecognized as such in the industry(CCDC documents, design-builddocuments 14 & 15, CCDCdocuments, etc.).
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6. Document 600 is designed to be compatible with and complementary to the MBA Kit.
Fees and services are more closelylinked than previous versions.
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7. Document 600 readily accommodates an expanded rangeof services including non-traditional services.
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Summary
8. Document 600 provides architects with another tool for business and marketing opportunities.
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Summary9. 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
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Summary
10. Additional services are minimized andrelegated to unforeseen and unanticipated scope changes.
Services not agreed to in theagreement are treated as change inscope and subject to adjustment tofees and time.
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Summary11.Electronic format makes the document
readily accessible and easier to complete while maintaining control over the maintenance of it as a standard document.
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Summary
12 As in all contractual relations, one of thebest investments of time is a careful, item byitem discussion between architect and clientas to the scope of services. It not onlygreatly reduces later opportunity for theclient to introduce “scope creep”, but alsoserves to identify to the client the value of the architects services and increases theconvergence of the expectations of theparties to the agreement.
Document 600 facilitates suchdiscussions by introduction of the list ofservices
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