AIA contract documents stipulate a three-step dispute resolution process: an initial decision, usually by the project architect; non-binding mediation and binding arbitration or litigation, as selected by the parties at the time of contract formation. What if a party is in a hurry and wants to cut right to the chase?
An appellate court ruled that participating in mediation was a precondition to a project owner’s right to sue a contractor for breach. The owner could not decline to invoke mediation and skip to litigation. The owner’s suit was properly dismissed with prejudice.
The second case in this issue involved the regulation governing the pricing of changed work on federal contracts. Field expenses may be calculated as a percentage markup on direct costs or as a daily overhead rate. But the contractor must be consistent for the duration of the project and the method must be consistent with the contractor’s established accounting practices.
The third case addressed the interplay between an “anti-assignment” clause in a subcontract and a state mechanic’s lien statute. The subcontractor’s failure to get the contractor’s advance written approval of a material supplier deprived the supplier of any lien rights against the project.
