This fall, the American Institute of Architects (AIA) will publish the latest addition to its series of framework contracts: the A421-2018 Standard Form of Master Agreement between contractor and subcontractor, under which work is performed under multiple employment contracts. It is written to contractors who hire the same subcontractor for many projects involving the same owner or different owners. The new A421 framework contract contains the general terms and conditions of the contract, such as dispute resolution, insurance and payments, which apply to each employment contract. After the execution of an A421, contractors can give their subcontractors workloads for multiple projects without negotiating the contractual terms applicable to each project. The A421 provides that the Contractor and the Subcontractor shall settle disputes involving the Contractor and the Owner in accordance with the dispute resolution provisions of the Main Contract. However, if the dispute does not concern the contractor and the owner – or if the subcontractor is legally prevented from being a party to the dispute settlement procedure of the main contract – the contractor and the subcontractor must first proceed to mediation. For disputes that are not settled by mediation, the Contractor and the Subcontractor agree to binding settlement of the disputes by arbitration, litigation or other form that they choose in the Framework Contract. Another feature of the A421 is that it contains the Prime Contract. The result is that the terms agreed on by the owner and contractor in the main contract are “paid” to the contractor and subcontractor. The A421 also establishes the reciprocal rights and obligations of the parties. In the event of a conflict between the provisions of the framework agreement and a work assignment, the terms and conditions of the work assignment shall apply. As with most AIA documents, terms that are not defined in the framework contract or work assignment are defined in A201-2017. Framework contract A421 defines the supporting documents for the subcontract and the subcontract.
The subcontracting documents are constituted by the framework contract; the mission and other documents contained therein; the main contract between the owner and the contractor and the related contractual documents; drawings, specifications and additions issued as part of the mission; and amendments to the main contract issued after the execution of the engagement. The subcontracting documents listed in each work order constitute subcontracting. The A421 is not a full-fledged contract and is linked to the framework contract between the contractor and the subcontractor with the employment contract A422-2018. The work order indicates the volume of work of the subcontractor. These documents are based on their overall content and structure on the A401-2017 Standard Form of Agreement Between Contractor and Souscontractor, a widely held AIA document. One of the characteristics of these documents is that the framework contract identifies the representatives entitled to act for the contractor and the subcontractor with regard to the entire framework contract, while identifying the persons entitled to represent the parties with regard to matters related to that particular contract. Like all AIA framework contracts, A421 does not require the parties to enter into or accept employment contracts. Framework contract A421 shall be maintained one year after the date of its execution and shall be automatically renewed each year on that date, unless it is terminated by one of the parties.
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