Contractor Denied Appeal of Architect’s Denial of Claim
Kegler Brown Construction Newsletter November 1, 1998
In a remarkable decision that will strike many contractors as grossly unfair, the Franklin County Court of Appeals has ruled that by deleting all references to arbitration in the AIA A201 (1987) General Conditions, it was the intent of the parties that the architect's decision on contractor claims would be final and binding. Standard Electric v. Gahanna-Jefferson Public Schools, Case No. 97APE11-1520 (Aug. 25, 1998). Accordingly, the architect's denial of the contractor's delay claim was upheld as final and not subject to litigation.
The Court ignored the contractor's argument that §4.3.2 of the AIA A201 General Conditions provided that the architect's decision on such claims is required as a condition precedent to "arbitration or litigation" of a claim between the contractor and an owner.
This decision reinforces the risks associated with the piecemeal revision of trade association contract documents and the interpretation of those documents by those unfamiliar with the construction industry.