Design Agreements

Desi gnAg reem ents 155
7.0 imp orTAnc e o f An Agre eme nT BeT ween
The owner AnD A rchi TecT
Formation of the legal relationships among the many participants needed to
perform a construction project begins, in many ways, with the owner-architect
agreement. How construction is administered, the type of documentation that
is to be furnished to the lender, how disputes are resolved, and many insur-
ance requirements, for example, are described initially in the owner-architect
agreement. Such provisions set the tone for other contractual arrangements
in connection with the project that subsequently are established. Many provi-
sions in a construction contract often are derived simply from certain terms
and conditions found in the owner-architect agreement in order to maintain
consistency between provisions in the two documents that are interrelated.
1. See generally, Ross J. Altman & Ridgely J. Jackson, Owner-Architect Agreement: A Discus-
sion of Key Provisions, presented by Ross J. Altman, Owner’s Avoiding Claims, in Washington,
D.C. (February 13, 2008); updated from Ross J. Altman, Generation Next, presented at American
Bar Association Forum on the Construction Industry, in Atlanta, Georgia, October 1997, and San
Diego, California, November 1997.
Design Agreements
The author thanks Ridgely Jackson, an associate of the Chicago of ce of DLA Piper LLP (US), for
her valuable assistance in the preparation of this chapter.
156 CO N S T RU C T I O N L A W
The owner-architect agreement is a somewhat unusual document because
the object of the agreement does not physically exist and is difcult to describe.
The project may not be anything more than a vague idea to the owner or
an operational need that must be addressed. An owner-architect agreement
involves the development of ideas and the transformation of those ideas into
drawings and specications. Unfortunately, many agreements with architects
describe the design process in jargon that is not well understood by those out-
side the design professions. Because many disputes in the design and con-
struction industry are caused by nothing more than disappointed expectations,
it is crucial that the owner-architect agreement accurately describes the design
process in language that is understood well by all parties.
The design process was described in Chapter 6. This chapter provides an
overview of how owners and architects contract for the performance of the
design proce ss. Like most agreements between owners and archit ects, Chap-
ter 7 begins with a descripti on of the professional design s ervices tha t archi-
tects usually provide and the circumstances under which an owner may desire
to expand the scope of services originally contemplated. Following that discus-
sion is a summary of other key issues in an agreement between the owner and
the architect, such as (1) when the architect may have responsibility to the
owner if actual costs of construction exceed the owner’s budget, (2) who owns
the documentation and ideas created by the architect and the design team,
(3) payment for professional design services, (4) architects’ and engineers’ pro-
fessional liability insurance, (5) methods used by architects and engineers to
limit their liability to an owner, and (6) termination of the agreement between
the owner and the architect.2
7.02 The Scope of T he ArchiT ecT ’S Serv ice S
The architect’s activities usually are described as “services” and may be per-
formed by the architect with its own forces or through subconsultants. Although
architects are capable of performing a range of different services when
requested by an owner, the typical scope of the architect’s responsibilities
includes architectural design and “usual and customary structural, mechani-
cal, and electrical engineering services.”3 Most agreements between an owner
and an architect describe a design process that is performed in phases.
2. A detailed discussion of the architect’s services performed during the construction phase of
a project is found in Chapter 13.
3. American Institute of Architects, AIA Document B101–2007, Standard Form of Agreement
Between Owner and Architect § 3.1 (2007) [hereinafter AIA Document B101–2007]. Notwithstand-
ing the AIA description of the architect’s scope of services, from time to time certain sectors of
Desi gn Ag reem ents 157
A. Phases o f the Design Process
The agreement between the owner and the architect can take many forms. The
design process, however, necessarily includes certain activities—beginning
typically with schematic design and ending upon completion of construction.4
The project design is not well developed in the early phases, but becomes more
complete and detailed in each successive phase. Although the design phases
may not be performed in a perfectly sequential manner (i.e., some aspects
of the design may move along more quickly than others), the overall design
gradually becomes more dened over time.
1. Schematic Design Phase
The rst phase, the schematic design phase, generally requires preliminary
evaluation by the architect of the owner’s program, schedule, budget, site, and
proposed delivery method; preparation of a preliminary design for the owner’s
approval; preparation of the schematic design documents (which may include
a site plan, preliminary drawings or site plans, study models, and preliminary
selections of major building systems and construction materials); and consid-
eration of such issues as safety, alternative building methods, environmental,
and budget constraints.5 Schematic design documents generally illustrate only
the scale and relationship of various project components.
The schematic design phase ends with delivery of the schematic design
documents to the owner for the owner ’s review and ap proval. Once such
approval is obtained, along with authorization for any adjustments in the sche-
matic design or other project requirements, the architect proceeds with the
design development phase.
2. Design Development Phase
The documents prepared in the schematic design phase are further developed
in the design development phase and include drawings and other documents,
such as plans, sections, elevations, typical construction details, and diagram-
matic layouts of building systems to x and describe “the size and character
of the Project as to architectural, structural, mechanical and electrical systems,
and such other elements as may be appropriate.”6 The design development
documents also include outline specications that identify major materials
the construction industry may develop a custom and practice that varies from the AIA standard
forms. Also, regional differences exist. For example, it might be common for the owner of a proj-
ect located in a particular part of the country to hire the engineers directly rather than have the
architect hold subconsulting agreements with the engineers.
4. AIA Document B101–2007, supra note 3, §§ 3.2–3.4.
5. Id. § 3.2.5.
6. Id. § 3.3.1.

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