A contractor and owner that work together typically have their attorneys negotiate their agreement before a job starts. When the same contractor will be hired to construct multiple projects, the parties can benefit from an agreement that establishes common terms and conditions applicable to all work.
This prevents additional contract negotiations and is where AIA Master Agreements come in.
The attorneys will review all the major risk-shifting provisions and create a baseline (the master agreement) for future projects between the parties.
This master agreement solidifies general contract provisions, such as indemnity, insurance requirements, waivers of consequential damages, or stipulations for working with hazardous materials, that will apply to each work order.
Use of a master agreement plus a work order creates a contract. This contracting method allows multiple scopes of work to be issued quickly without the attorneys re-negotiating the contract. Generally, the work order is straightforward enough that the parties can complete it themselves. It will address the scope of work, price, time and other project- specific details.
Most AIA agreements are meant for use on a single project, and an agreement concludes when the work has been fully completed and final payment has been received. On the contrary, a master agreement is effective for one year and renews automatically, unless either party provides 60 days notice of its intent not to renew.
When a new project comes around, the parties can simply add a work order under the umbrella of the original master agreement. The master agreement helps contractors and owners streamline the contract review process and spend less money on attorney fees.
Owner/Contractor Master Agreements
A121–2014, Standard Form of Master Agreement Between Owner and Contractor, where work is provided under multiple work orders, is intended for use when the contractor’s scope of work will subsequently be specified through the use of one or more work orders. This contract document only provides the common terms and conditions that will be applicable to each work order. Use of A121 plus a work order creates a contract that includes both the terms and the scope of work.
A121-2014 is coordinated for use with A221–2014, Work Order for use with Master Agreement Between Owner and Contractor, which provides the contractor’s scope of work, contract time, contract sum and other terms pertinent to the specific work order. It is intended for use when the owner and contractor have entered into a master agreement setting forth the common terms and conditions applicable to all work orders.
A221–2014 is not a standalone agreement and must be used in conjunction with a master agreement.
Contractor/Subcontractor Agreement
A401-2017, Standard Form of Agreement Between Contractor and Subcontractor, establishes the contractual relationship between the contractor and subcontractor. It sets forth the responsibilities of both parties and lists their respective obligations, which are written to parallel AIA Document A201–2017, General Conditions of the Contract for Construction, which A401–2017 incorporates by reference.
