110 Contractual Consequence of Government Agency Approval; Governmental and Association Standards

• Jurisdiction: Arizona

The Registrar of Contractors has incorporated some governmental and association standards. However, a private contract requiring governmental approval does not make such approval the final arbiter as to performance.

In New Pueblo Constructors, Inc. v. Lake Patagonia Recreation Ass’n, 12 Ariz. App. 13, 467 P.2d 88 (1970), the owner sought to avoid arbitration because the agreement with the contractor provided that the final estimate must be checked and approved by both the owner’s engineer and the representative for the Farmers Home Administration. The court rejected the owner’s contention that approval of the federal agency was a condition precedent to recovery and that the arbitrator’s award would be meaningless unless approved by such agency:

Clauses in building construction contracts which require approval by federal administrative agencies do not make such agencies the final judge as to whether or not either party has performed under the contract. See 67 A.L.R. 2d 1017 et seq.

Id. at 18-19.

The Registrar of Contractors regulation, A.A.C. R4-9-108, requires that licensed contractors perform work in a...