Legal Terminology Flashcards
Performance bond
An approved form of security furnished by the contractor guaranteeing to execute the work in accordance with plans and specifications
Payment bond
Guarantees that the contractor will pays all bills and obligation for labor and materials incurred under the contract. (Usually at least 50% of the contract)
Payment bond renders the owner harmless from claims and liens that might be filed after the completion of the work and after all payments have been made to the contractor
Combination performance and payment bond
Requires both the performance of work and the payment of labor and materials (may be 50% or 100% of contract, usually 100%)
Bid bond
Submitted with the proposal
Guarantees that the bidder will enter into the contract if their proposal is accepted. Guarantees that the contractor will furnish performance and payment bonds if required by contract
In the event the bidder refuses to sign the contract in accordance with the bid, the surety is obligated to pay the owner the damages caused, subject to the penalty of the bond (usually a sum of 5%-10% of the bid amount)
Construction insurance: landscape architects
Controlled by tort law
Landscape architects:
Write contract documents involving the owner and the contractor. Have an obligation to protect the owner from liability during construction (I.e. claims by a third party)
Insurance requirements must be covered in either the owner/contractor contract or in the specifications. (Because they deal with money, the insurance requirements should be put into the general conditions of the contract)
Contractor’s insurance required by state and/or federal law. (Designers in private practice should carry these insurance requirements also)
Construction insurance: workman’s compensation
Required by each state statute
Designed to protect employees and their families from risk of accidental injury and death or disease resulting from employment
Vary in detail from state to state, but generally includes the cost associated with personal injury or death and the expenses of production.
Must be paid for by employers, regardless of who is at fault.
Payments are based on payroll amount and record of past claims
Construction insurance –owner liability:
Contractor’s public liability and property damage insurance (PL/PD):
Protects the contractor from legal liability for injuries to persons not in the contractor’s employment and for damage to the property of others that arise out of the operations of the contract.
Hold harmless agreement may be a rider to this insurance to cover contractual liability, i.e. legal liability of the owner
Construction insurance –owner liability:
Contingent public liability insurance
Involves the direct bodily injury, death, and property damage liability of the general contractor for the acts of parties for whom he/she is responsible
Construction insurance – owner liability: contractural liability insurance
Allows the contractor to assume the legal liability of an owner, or other party, by the terms of a contract. If this insurance is used, the hold harmless rider in the PL/PD would be unnecessary
Construction insurance – owner liability: owner’s protective liability insurance
Protects the owner from contingent liability for damages arising from the operations of the contractor or her subcontractors
Construction insurance – owner liability: completed operations liability insurance
Protects the contractor from damage claims stemming from alleged faully
performance on projects since completed and handed over to the owner
Construction insurance – owner liability: Employer’s liability insurance
Affords the conlractor a broader coverage for personal injury or death of an
employee in the course of employment (usually written in conjunction with
Workman’s Compensation Insurance)
Construction insurance – owner liability: Professional liability insurance
Covers losses that arise from the designer’s negligence or employees. The
professional niay be required to indemnify and save harmless the owner ·
from all claims arising from negligent acts of the L.A. Professional Liability
may or may not cover this clause.
Construction insurance – owner liability: Indemnity
Liability shifted from one person held legally responsible to anotheq person.
Owner may require contracjor or landscape architect to indemnify the owner
against losses from contract performance.
i.e. Require indemnity insurance
Cannot absolve self of own liability by contract.
Appeals
ANY PERSON DENIED APPROVAL OF ANY ADMINISTRATIVE ZONING MATTER CAN
APPEAL THE DECISION. IN MOST CASES, APPEALS GO FIRST TO THE ZONING BOARD OF APPEALS; FROM THERE THEY GO TO CIRCUIT COURT. IF THE ZONING BOARD OF APPEALS HAS NOT MADE A DECISION, A CASE IS GENERALLY NOT CONSIDERED “RIPE” FOR REVIEW BY THE
COURTS.
Comprehensive plan (master plan, basic plan, future land use plan)
THESE ARE ALL TERMS FOR THE PLAN CREATED BY THE PLANNING COMMISSION TO GUIDE THE FUTURE GROWTH AND DEVELOPMENT OF THE COMMUNITY. IT IS USED AS THE BASIS FOR
ZONING REGULATIONS/DECISIONS, SUBDIVISION REGULATIONS AND CAPITAL IMPROVEMENT PROGRAMS.
Discretionary standard
THIS TERM REFERS TO GENERAL STANDARDS IN THE ORDINANCE WHICH ARE USED IN REVIEW OF SITE PLANS, PUD’S AND SPECIAL LAND USES
WHICH SERVE AS THE BASIS FOR DETERMINING WHETHER A LAND USE PROPOSAL IS COMPATIBLE WITH THE ADJACENT USES OF LAND, NATURAL RESOURCES AND PUBLIC SERVICES AS.REGULATED AND DEFINED IN THE ZONING ORDINANCE .
Land use
A TERM TO INDICATE THE UTILIZATION OF ANY PIECE OF LAND WHETHER IT BE
LOT, TRACT, PLAT OR ACREAGE.
THE WAY IN WHICH LAND IS BEING USED IS THE LAND USE
Land use plan
THE PROPOSED UTILIZATION OF LAND, RESULTING FROM PLANNING ANO
ZONING STUDIES. USUALLY PRESENTED IN MAP FORMAT INDICATING DESIRABLE AREAS FOR RESIDENTIAL, COMMERCIAL, INDUSTRIAL, AND OTHERS.
Nonconforming use
A USE OF LAND OR BUILDING THAT WAS LAWFULLY IN EXISTENCE
PRIOR TO THE ADOPTION OF THE ZONING ORDINANCE AND WHICH IS THEREFORE PERMITTED TO CONTINUE IN THE FUTURE EVEN THOUGH CURRENT ZONING REGULATIONS APPLYING TO
THAT PARCEL WOULD NOT PERMITIT TO BE ESTABLISHED ANEW .
Nondiscretionary standards
Criteria which specifically indicate a measurable numerical performance standard that must be met or complied with in order to get zoning approval. For example, a setback height or bulk regulation is a “non discretionary standard” anyone can readily measure or calculate whether a proposed structure or site plan conforms with this type of standard
Abnormally dangerous activity rule
Certain activities present an unusually high risk of danger in a particular locale e.g., use of explosives in a highly populated area. In such case, the party engaging in the activity may be strictly liable for damages caused by the activities. In other words, that person is liable even if the injured party cannot prove intent to harm or negligence. See ‘strict liability’.
Abstract
A document summarizing the chronological and legal history of a parcel of land used to
evaluate the validity of a title or type of deed to be issued.
Acceptance (of an offer for a contract)
Acceptance occurs when the person to whom an offer is made (the offeree) manifests their agreement to the contract terms proposed by the offeror. Under
the objective theory of contract law, whether acceptance has occurred is judged by a reasonable person standard, not by the subjective intent of the offeree, an and be made by written or spoken words (express)
or by behavior (implied). See definitions of counter-offer and mirror image rule below.
Accord and satisfaction
An enforceable agreement by all parties to a dispute to settle a dispute.
The tenns of the settlement must require each party to give up part of their original claim. In other words, the parties agree to new terms (the accord) and to give up prior claims (the satisfaction). See definition of “unliquidated claim” below.
Actual cash value (ACV) coverage
The replacement cost of property less an allowance for actual depreciation
Ad valorem tax
Levies made in proportion to real estate value for support of public purposes
Addendum/addenda
A written document issuing changes to the plans and/or specifications after they are put out for bid but before the contract is signed. Addendum acknowledgement must be indicated on the bid form
Ad-hoc member
Member who is automatically a member of a committee, etc. because of his or her position within the organization; an officeholder
Administrative agency
A regulatory agency established by statue. A department of government formed to administer a particular area. An example of a federal administrative agency would be the EPA who endeavors to control pollution by research, monitoring, standard setting, and enforcement activities. Similar agencies also exist at the state level
Adverse possession
Possession and use of real estate by a non owner is adverse possession. Both
the owner and !he person possessing are private individuals. In various jurisdictions such use and possession will result in ownership by the user after a specified period of time (often 15 years).
Advertisement
The notification to contractors that the owner is taking bids for a project. The
advertisement usually is published in newspapers and construction industry outlets available to contractors
Affirmative defenses
See ‘prima facie’. An affirmative defense will bar an otherwise valid claim. It
is called “affirmative” because the party claiming the defense has the responsibility to bring it to the court’s attention. See ‘statute of limitations’.
Agency relationship
A contractual relationship between a person and an owner which authorizes
that person to act as the owner’s representative to bring about performance of contractual obligations.
Agent of the owner
A person authorized by the owner to act as the owner’s representative to bring
about performance of contractual obligations
Alternatives
Where the possibility exists of a need to change the bid price, the design professional may identify an alternative to a specified material or construction method. The bidder(s) will figure their bid including the specified material or construction method and then indicate an amount to deduct from or an amount to add to the bid price if the alternative is used
Anti-assignment
These provisions are commonly included in contracts and are also known as “anti-alienation” provisions. They commonly provide that a party to the contract may not transfer their interest in the contract to a third party without consent of the other party of the contract.
Also see definitions of assignee and assignor
Anticipatory repudiation
When the promised time of performance of a contract has not yet arrived, and the person who made that promise unequivocally announces their intent not to perform, they have anticipatorily repudiated the contract. Generally, this discharges the duties of the other party and gives them the right to sue for breach immediately
Appellate court
Court whose only power is to review the decision of a lower court, i.e. court of original jurisdiction
Appraisal
The process of determining value for real estate. The most common value determining methods are the cost of replacing real estate, the recent sale of comparable real estate and the value of the real estate based on the income it produces
Arbitration
A procedure whereby contracting parties may submit a dispute to an impartial board for a decision. An alternative to a suit in a court of law. This method makes it possible to avoid many of the legal formalities, delays, and expenses which result from litigation
Article
Major subject within a part of a specification section consisting of one or more paragraphs or subparagraphs
Articles of incorporation
An application for incorporation of a business. The application usually
contains the name, the corporations purpose, duration, capital structure, place of business, number and type
of shares to be issued arid proposed directors of the corporation being formed
As built documents
A project is often the result of what was originally designed as well as the planned or inadvertent but accepted changes made during construction. For the purposes of accurately recording the actual results of what was implemented, the project is measured and a final set of plans and drawings are made. Often these drawings showing the project as it exists and merely notations on the construction drawings. Accurate documents are often critical for maintenance purposes and later phase plans.
Assessment district
An adopted and defined area within which monies (in excess of the amounts
normally taxed) are collected for the purpose of underwriting additional services or building elective public improvements. A neighborhood electing to install and finance its own sidewalks or added foot patrol security in a downtown area are two examples
Assignee
When a contractural duty has not yet been performed (i.e. it is executory), the person to whom that duty is owing (the obligee) often transfers their rights to receive performance to a third party. The person to whom the transfer is made is known as the assignee in this situation
Assignor
When a contractual duty has not yet been performed (i.e. it is executory), the person to whom that duty is owning (the obligee) often transfers their rights to receive performance to a third party. The obligee is known as the assignor in this situation
Assumption of the risk
See ‘contributory’ and ‘comparative negligence.” This is a complete bar to the negligence claim. If a plaintiff knew about a risk and voluntarily encountered it, the plaintiff assumed the risk
Bid
A written offer, tendered by the contracting firm to the owner, which stipulates the price for which the contractor agrees to perform the work described in the bid documents
Bid amount
The total amount of a bid
Bid bond
A surety bond guaranteeing that the bidder will complete the contract and will post a construction bond.
Required of a contractor and attached to the bid. The purpose of these bonds isn to make sure that the contractor is making the bid in good faith and will sign a contract if his or her proposal is accepted. If a contractor refuses to sign a contract, bid bond is forfeited. Bond amount is usually 5-10% of the bid amount
Bid documents
The advertisement, instructions to the bidder, and bid form
Bid rigging
To manipulate a bidding process dishonestly for personal gain
Bilateral contract
At the moment the contract is made, one party often exchanges a promise to perform in the future (an executory promise) for a promise from another to perform in the future. In other words, each party is both an obligator and an obligee. This exchange or executory promises is known as a bilateral contract.
Breach of contract
Failure to observe the terms. When one party either fails or refuses to perform their obligations under the contract or when his/her acts make performance impossible
Breach of duty
One of the elements of a prime facie case of negligence is breach of duty. In a negligence case, the test is whether the defendant met the standard of care which a reasonable person in the community would have exercised in the state situation. This is often a question of fact for the trier of fact (judge or jury)
Builder’s risk coverage
Coverage against loss to buildings and equipment in the course of construction, and to construction materials
Capacity
When the law gives a person the legal ability to perform an act, they are said to have capacity. Capacity is generally based on age or mental soundness. (E.g. most state statues require a person to have reached an age of majority to enter into most types of contracts).
A person may have capacity for one reason (e.g. capacity to make a will known as testamentary capacity) while not having capacity for another reason (e.g. capacity to enter into a contract known as contractual capacity)
Capital
Designate goods and assets used as private works for the production of ports. It’s the owners equity in a business or the total assets of a business
Cash allowance
Sometimes in bidding, the exact extent of the work cannot be easily determined because of decisions that will be made after the contract is signed; i.e. shop drawings for a specific item. When this occurs, all bidders are required to include a set sum in the bid to cover expenses and profit for the item or items. The contract sum would be adjusted in conformity when the item is completed.
Causation
This is one of the elements of a prima facie case of negligence. The injured party must prove that the tortfeasor was both the cause in fact and the proximate cause of the injury
Cause in fact
This means “actual cause” and is tested by a “but for” test. The injured party must show that “but for” the defendant’s behavior, the injury to the plaintiff would not have occurred
Certification
The issuing of a certificate whereby the state indicates that a profession has met the requirements of that state’s professional practice law, having successfully completed a process in order to be certified to practice that profession and use the title. Uncertified individuals may practice the profession but may not use the title
Change order
A written document issuing changes to the plans and/or specifications after the construction contract is awarded. It is prepared by a landscape architect and signed by the owner and contractor
Closed bid opening
A bid opening that is not open to the public and the successful bidder is notified by phone or mail
Closed proprietary specification
A specification that names a brand name product and does not allow a substitution of that product
Collateral
It is common for a debtor to agree to provide the creditor with security for a loan. In other words, the debtor agrees that the creditor may take certain property of the debtor upon default. That property is called collateral
Commercial impracticability
promise is viewed as “impossible” under the common law of contracts when it is objectively impossible to perform {as opposed to merely difficult to perform). The common law generally required impossibility to excuse failure to perform a contract. When a contract is covered by Article 2 of the Uniform Commercial Code, failure to perform may be excused by “commercial impracticability.” This exists when the duty, although not objectively impossible to carry out, is extremely difficult and performance would be unreasonable due to circumstances which the parties did not bargain about at the time of making the contract.
Commercial paper
An item such as a check or promissory note or certificates of deposit is “commercial paper” (also commonly referred to as a “negotiable instrument”) if that item meets the standards described in Article 3 of the Uniform Commercial Code. If an item meets those standards, it may be transferred to a person known as a “holder in due course” and the new holder (if they meet the requirements of Article 3) takes the item free of any personal defenses available to the original obligor.
Comparative negligence
In a negligence case, the defendant often asserts that the plaintiff’s own failure to behave in a reasonable manner contributed to the plaintiff’s harm. In a state which has a comparative negligence rule, this failure by the plaintiff (if proven) reduces the damages the plaintiff may collect from the defendant.
Compensatory damages
Damages designed to compensate the plaintiff for damages resulting from the defendant’s act.
Competitive bid contract
A type of contract that is straight-forward and business-like whereby the owner takes his chances in an open market situation; playing a fixed price for a definite service
Complete integration
Signing of a written contracts is
frequently preceded by a period of negotiation. If a contract is a “complete integration,’ this means that the
parties intended the contract to supersede ail matters discussed previously. In other words, the completely integrated contract is one which the parties Intend as a complete and exclusive statement of the agreement.
If that is what the parties intended, the written contract may later not be varied by any prior oral discussions. It is common to Include a “complete integration” clause In a contract to make this intent absolutely clear .
Contract
An agreement between two or more persons or parties to do or not to do a particular thing. A written contract contains the agreement of parties with the terms and conditions, and which serves as a proof of obligation
Contract bond
A surety bond guaranteeing that the principals will complete their work in accordance with the terms of the construction contract
Contract documents
Contract, plans, specifications
Contributory negligence
In a negligence case, the defendant often asserts that the plaintiff’s own failure to behave in a reasonable manner contributed to the plaintiff’s harm.
Cost over-runs
Where costs exceed the desired limit or estimated limit
Counter offer
When an offer (by the offeror) is made, the offeree often rejects that offer and
proposes new terms. This rejection of the original offer combined wilh a new offer is often called a counteroffer (the original offeree now becomes the offeror).
Covenants
Agreements, development restrictions, and rules filed with a development plat or as encumbrance placed during the sale of property which regulates the use of the property
Deed
A written instrument which conveys the legal right of ownership of real property. An instrument of bond, contract, or conveyance of property.
Deliverables
A contract lists the obligations that must be met by the provider of services. That list, whether it be a constructed facility, a purchased item or designed and plans to build a project, certain services or objects have to be given to the owner before payments are made. These are delivered or are the deliverables
Deposited acceptance rule
Under.the common law of contracts, a ·contract is generally formed at the moment a mirror image acceptance of an offer is made by the offeree. The deposited acceptance rule determines when that
moment of acceptance takes place when ifis maile_d. Under the deposited acceptance rule, a contract is formed at the moment that acceptance is deposited in the mail by the offeree. As a result, a later attempt at
oral revocation by the offeror is not effective, even if it is made before the offerer actually receives the previously mailed acceptance,
Descriptive specification
Specification that is a detailed written description of the required properties of a product or material, and the workmanship required for its proper installation.
Design development documents
The project plans are presented with such accuracy and detail that reliable quantities, dimension and placement are discernible for costing, permitting, and bidding. It is the last stage of design which accommodates change before the much more detailed construction documents and specifications are drawn up.
Disaffirm
As a general rule, a contract made by a person without capacity is “voidable.” When that person (or someone acting on their behalf, such as a conservatory) elects not the be bounded by that contract, they “disaffirm” the contractor
Disclaimer
A statement on plans or specifications which denies responsibility and/or assigns responsibility to another party
Discrepancy
When one part of the specifications contradicts another part, possibly causes improper construction or increased cost
Doctrine of part performance
If a contract is covered by the statute of frauds, that contract must generally be evidenced by a writing in order to be
enforceable against “the-party to be charged.” However, if that party has already demonstrated that the contract exists (even though it is not written) by partially carrying out the terms of the contract, the contract is
enforceable even though there is no written evidence.
Doctrine of quantum merit
Projects may be terminated well into the design phase with many documents and plans developed never to be implemented. The doctrine of Quantum Merit deals with an owner’s obligation to pay for the value of services actually rendered up to the point of the project’s termination even though, to the owner, in the case of a Project not built, there is no value .
Duplication
When information is repeated more than once in specifications, it often leads to discrepancies and possible confusion in locating information
Duty
A legal or moral obligation that is owed or due to another. Any action, performance, task, or observance owed by a person in an official or fiduciary capacity. See ‘breach of duly’. One of the elements of a prima facie case of negligence. The plaintiff must prove that the law recognizes a duty by the tortfeasor
to the injured party e.g., accountant to client, driver to pedestrian, business owner to customer.
Eminent domain
Under the right of eminent domain, the state can take property for public use upon the giving of just and adequate compensation. This right is sometimes given to corporations who perform some public functions, such as railroads and telephone companies
Enforceable promise
Nat all promises are recognized by Jhe law. Far example, a mere promise to
make a gift is not generally enforceable. When a promise meets all the legal requirements for a contract, it
becomes an enforceable promise
Errors and omissions insurance (E&O)
Insurance responding to liability of persons arising from their provision of professional services .
Executory promise
When promise has been made, but not yet performed, that promise is “executory.” When that promise carried out, it is “executed”
Express consent
Consent stated orally or in writing
Express contract
The existence of a contract and the terms of a contract are often, but not always, expressed in writing or orally. Such a contract is an “express contract.” (Compare with “implied in fact” contract)
Express ratification
There are many situations in which is contract is “voidable” by a person due to their lack of capacity. If that person later attains capacity, they often choose to be bound by the contract. If this is done by written or spoken words, this choice is called “express ratification.”
Fidelity bond
Covers employers for losses resulting from dishonest acts of employees
Firm offer
As a general rule, a mere promise to keep an offer open for a certain time is not enforceable under the common law (due to the absence of consideration). When an offer is within the scope of Article 2 of the Uniform Commercial Code and the offeror promises to keep it open for a certain time, it is said to be a “firm offer.” If the detailed requirements of the UCC are met, that offer is enforceable even though there is no consideration
Force account
The owner chooses to do the work with their own forces, providing all field supervision and management duties, payment of bills, purchasing of materials and coordinating of construction equipment
Force majeur
Literally meaning superior force, this term represents an unexpected or uncontrollable event which upsets the ability to complete a contracted obligation on time or at all. Such an event which includes acts of war and civil unrest or acts of God such as tornadoes, hurricanes and earthquakes typically release or substantially alters contract obligations
Gap filling approach
Under the common law, an offer must be reasonably definite in order for acceptance of that offer to create a contract. As a general rule, the offer must specify key factors such as price and quantity, In contrast, when an offer is within the scope of Article 2 of the Uniform Commercial Code, the law allows more flexibility. When the parties intend lo make a deal, but have left out key terms
(other than quantity), the UCC will commonly fill in the gaps for the parties with a reasonable term (e.g., a “reasonable price” becomes a term of the contract even though the parties failed to set the price expressly).
General conditions of the contract
May also be referred to as articles precedent to the agreement. Typical information contained would be insurance requirements, bond requirements, termination of the contract by either party, arbitration and an article making the plans and specifications part of the contract. The agreement and general conditions of the contract combine to form the contract
General requirements
Title for the first division in the CSI (Construction Specifications Institute) format for specifications. Contains information on the administrative requirements, procedural requirements, and temporary facilities and controls, pertaining only to the needs of construction, governs the specifications.
Implied consent
Consent manifested in behavior, not written or spoken words
Implied-in-fact contract
The existence of a contract, as well as the terms of a contract, is often implied by the behavior of the parties, not by written or spoken words. Such a contract Is called “implied-in-fact.”
Implied-in-law contract
In unusual situations in which a contract has not been formed (i.e., there Is no express contract and no implied-in-fact
contract), the law will require a person who has received an unjust enrichment to pay the fair value of that enrichment to the party who enriched them. This is called a “quasi-contract” or an “implied-in-law” contract
obligation.
Indemnification
Restoration of the insured to the pre-loss status (e.g. to make whole)
Indemnifications
In a business relationship one party may agree to protect the other against damage or law suits for activity only it can control. Indemnification can include purchasing insurance, bonds to guarantee performance, or simply agreement that it is solely responsible for certain activities in a project. An owner, for example, may be not able to control or determine whether a design meets complex codes and ordinances concerning environmental issues or disability requirements
Insurance
A financial contract that allows a business to shift or transfer the economic impact of relatively large, uncertain losses to an insurer in return for relatively small, certain losses, the premium payment.
Invitation for offer
In some cases, a person’s words or actions are not definite enough to be an “offer” for a contract. For example, may advertisements in newspapers and magazines are not offers. Instead they are mere invitations for offers. An attempt to accept an invitation for an offer does not create a contract
Liquidated damages
Damages that cover situations in which the contractor fails to complete the work within the time specified and causes the owner to suffer losses and/or other hardships. The amount of the damages may be determined by the agreement or by a court of lawn. In order to avoid this, an article should declare that “time is of the essence” in the contract.
Lump-sum contract
One of two types of competitive bid contracts which provides a set sum for compensation to the contractor or for all work and services required by the plans and specifications.
Maintenance bond
A bond that guarantees that completed work will be free of defects for a stated period
Mechanics lien
Designed to protect suppliers, workmen, and occasionally contractors, architects, and other professions in the construction industry. It holds that anyone who contributes to or increases the real value of real estate through personal services or materials has a claim against the property for payment. They are statue laws, and therefore vary from state to state.
Mirror image rule
Under this rule, the person to whom an offer is made (the offeree) must manifest
assent to the exact terms proposed by the offeror in order for acceptance to occur. Any variation of the terms by the offeree results in a counter-offer rather than an acceptance. Note that this rule does not apply to contracts within the scope of Article 2 of the Uniform
Commercial Code.
Moratorium
The suspension, deferment, or delay of any action. For example, a building moratorium caused by a shortage of utility capacity means that all construction is ceased for a specified period of time
Mutual assent
When a reasonably definite offer is made and that offer is then accepted in a way that meets the mirror image rule, the offeror and the offers are said to have reached “mutual assent”
Negligence
The omission or the doing of something which a reasonable and prudent person would not do under similar circumstances.
The tort of negligence requires that a plaintiff prove that the defendant had a legally recognized duty to the plaintiff, that the defendant failed to meet the standard of care applicable to a person having that duty (breach of duty), that the defendant’s failure caused the plaintiffs harm (both proximately
and in-fact), and that the plaintiff suffered damage. In most negligence cases, the standard of care is whether the defendant acted as a reasonably prudent person would have acted in similar circumstances
Negligent failure to warn
This is one particular type of negligence. In a case of this type, the plaintiff must prove that the defendant failed to warn the plaintiff of risks e.g., dangers inherent in a product
sold by the defendant.
Negligent per se
One of the elements of negligence is the defendant's failure to meet the applicable standard of care (breach of duty). If a state criminal statute, municipal ordinance or administrative regulation was violated by the defendant, a judge in the negligence case may find that this statute, ordinance or regulation sets the standard of care applicable to the negligence case. This will ordinarily be done by the judge only if the statute, ordinance, or regulation was designed to protect against the type of harm which the plaintiff suffered and the plaintiff was in the class intended for the product
Negligent retention
This is one particular type of negligence. This claim is typically made against
an employer of a person who harmed the plaintiff. The plaintiff must show that the defendant employer acted unreasonably in continuing to employ a person after learning about the propensity of the employee to behave in a manner causing harm to others.
Negotiated contracts
Contractor selected by qualifications. Owner pays the actual construction cost of the work plus compensation to the contractor for services. Restricted to private construction.
Notice of award
After bidding and selection of the contractor, a formal notice may be sent notifying the contractor of the award and would include instructions as to the time and place of signing. Any conditions of the award should be stated precisely, i.e. alternates selected.
Notice to proceed
After the contract is signed, a formal notice to proceed may be sent to the contractor, authorizing the work to begin
Oral contract
It is recommended that contracts be a written and signed document to assure that it can be fully enforced. A contract can be made that is not written but merely stated and agreed to by participating parties. If this oral contract meets the four determinants of a contract, it is legal.
An oral
contract is an express contract in which the terms are expressed orally. Oral contracts, although often difficult to prove, are enforceable when their existence and terms are proven unless the statute of frauds
applies. If the statute of frauds does apply, then there must generally be a writing signed by the party to be charged in order to enforce the agreement.
Ownership (forms of)
The legal right to possession of property can be held by many forms of ownership. - Ownership by government representing everyone is public.
- A single person having title to real estate constitutes Individual ownership or with a spouse is joint ownership.
- If a business entity is legally
described as a partnership or a corporation then real estate owned by such an entity is partnership or corporate ownership, respectfully.
- Groups of people such as neighborhoods legally form associations and
own property or those joining golf or hunting clubs own property jointly through membership.
- Individuals, groups, or firms may purchase real estate for a specific time or block of time each year as time share which is real ownership for a period of time or temporal. – - Rear estate can be leased for an extended period of time where it becomes practical to take up a permanent type of residency and make permanent improvements this long term rent of land effectively makes a tenant (tenancy) an owner.
- Real estate can be sold with the
seller keeping the right to remain on the property until death which is life estate ownership.
- An owner can hold title to specific real estate which is only a part of a larger complex such as a dwelling unit In a
residential cluster or a single hour in an office tower. This ownership is a condominium.
- If the same owner held a 10% share of a 10 unit residential complex and not necessarily the title to the specific unit he or she
used, they would have a cooperative ownership.
- Farmers who jointly band together to build, own, and share in the use of grain storage buildings or save on joint purchases of equipment and supplies form agricultural
cooperatives which may also involve shared farming lands and crop sales.
Payment bonds
Bonds that guarantee that the contractor will pay all bills and obligations incurred
under the contract, thus rendering the owner ham,less from claims and ·liens which might be filed after the
completion of the work and after all payments had been made to lhe contractor.
Percentage fee
Contracts can call for a (design) service provider to be paid on a basis of hourly rates by the various designers involved along with agreed upon reimbursable expenses. The contract can simply pay the service provider based on an agreed upon sum that is tied to the actual cost of the project as bid or built. This is often a percentage of the “hard costs” of the project – a percentage fee .
Performance bond
The security furnished by the contractor as a guarantee that the contractor will execute the work in accordance with the terms of the contract.
Performance specification
Specification that describes the required results, the criteria by which the performance will be judged, and the method by which it can be verified .
Permit bond
A bond guaranteeing that the person lo whom a permit is issued will comply with the laws and regulations associated with the permitted activity
Pooling of bids
An agreement between competing contractors to artificially Inflate the price of the low bid on a project for common profit.
Post construction evaluation
The practice of reviewing the projects as designed and completed to determine if any additional changes or improvements are needed or desirable. Later phases may be
discussed and planned. The owner, designer and construction teams are typically involved
Pre-existing duty
In a bilateral contract, the parties exchange promises to perform in the future: If one party agrees to do something that they are already legally obligated to do, that is a promise to perform a pre-existing duty. As a result, that party has not supplied “consideration” and a contract is not formed
Prequalification data
Information required by the owner from each potential bidder to determine if
each bidder is responsible and competent to satisfactorily complete a given construction contract.
Prequalification of contractors
Must be determined before a contractor is allowed to bid whether he/she is responsible and competent to satisfactorily complete a given construction contract. Used by government agencies.
Professional ethics
These are the codes that govern the conduct of professionals in matters that
are outside the scope of the law. These codes are established through custom and usage and depend upon the integrity and sincerity of the professional.
Project manual
Term introduced by the American Institute of Architects to describe a manual that
houses all the written documents prepared for a construction contract, including bidding requirements, contract forms, conditions of the contract and specifications. The manual uses MasterFormat’s 16 divisions to organize information.
Proposal
A proposal is a written offer, tendered by the contracting firm to the owner, which stipulates the price for which the contractor agrees to perform the work described in the bidding documents. May be also referred to as a bid .
Punch list
Typically as a project or a phase of a project nears completion. The owner, a designer, or other representative of the owner inventories the project as it has been implemented to date to assure that it is in full accordance with the designs and specifications in 1he contract documents. A list is drawn up of any incomplete or improperly installed work and the contractor works against those items until all are agreed to be completed, “punched” or checked off.
Puported acceptance
It Is common for an offeree to purport to accept an offer, but not actually
accomplish acceptance. For example, the acceptance may violate the “mirror image rule”. In that case, the attempt is not an acceptance – it is a counter-offer
Reasonable
In tort and contract law, the law often imposes a “reasonable person” standard. The standard is how a reasonable person in the community would have acted in a similar situation. This standard must be applied by the finder of fact (a judge or a jury) to determine whether one person is liable to another. When a person tries to enforce a promise using promissory estoppel as the legal basis, they must convince the judge or jury that a reasonable person would
have acted as they did .
Reasonable person
This is the central concept in the law of negligence. Tort law requires the finder of fact to compare the defendant’s behavior lo the manner in which a hypothetical person in the community would have behaved in similar circumstances i.e., compare the defendant to a reasonable person. If the
defendant does not meet that standard and has a duty to the plaintiff, then the defendant has breached its duty .
Rebuttable presumption
Once the plaintiff proves the essential elements which allow the finder of fact to find in its favor i.e., proves its prima facie case, a presumption is made that the
plaintiff is entitled to prevail. However, !his presumption can be overcome by the defendant’s introduction of evidence to the contrary i.e., the presumption is rebuttable.
Reimbursable expense
Costs are incurred beyond !hat of personnel in the performance of a contract’s obligations. The typical contract lists which costs can be paid to the person or firm providing the agreed upon services. They are commonly paid following their incurance. The contract usually stales how the expenses are to be documented and whether an additional fee is allowed for processing and paying the expenses before they are reimbursed (paid back) by the owner. Typical reimbursable expenses include required travel, small subcontracts, materials, supplies and printing.
Request for proposals (RFP)
A format where a client asks that a (design) service provider actually make a proposal to do a project. It is assumed that all those being asked have already been determined to be qualified. Competing service· providers are judged against each other as a predetermined basis such as design solution or cost to do the project for example.
Request for qualifications (RFQ)
A format where a client asks for relevant experiences, backgrounds and capabilities of a (design) service provider so that competing providers can be measured
and judged against each other for purposes of being hired to do a project
Rescission of contract
This is an “equitable” remedy granted by courts in certain contract disputes
(in contrast with a “legal” remedy, i.e., the award of money damages). For example, it may be applied when the contract was based on a mutual mis lake about a material fact. If damages are not an adequate remedy, the court will undo the contract and place the parties in the parties where they were prior to making the contract.
Responsible bidder
A bidder that exhibits the characteristics that would lead the owner to believe
that the bidder will fulfill the terms of the contract and has the means to pay all debts.
Retainer
An agreement to pay an amount to keep a service provider (designer) in ongoing or continued employment. A person or firm hired to provide design assistance to a client over time and not necessarily for a particular project may be said to be on a retainer.
Risk management
The systematic process used to manage risk exposures.
This refers to a planned method of reducing the potential liability that a business may have to its customers. One key aspect of a risk management plan is reducing potential tort liability. In that area, quality control, employee training, insurance and documentation are ordinarily key aspects of the risk management plan.
Schematic Design
A level of plan details where circulation, parking layouts, building cores, drainage
and use areas are clearly evident for the purpose of developing the preliminary economic analysis of a project. The detail is adequate for detailed zoning presentations, marketing, quantifying specific materials
and project elements for developing a detailed project cost.
Shop drawings
Detailed drawings that may be required of the contractor after the contract Is awarded
Soft cost
Projects also include additional expenses not directly attributable to the physical
implementation bu! are clearly part of the total package. These include design, insurance, construction period finance costs, consulting and subcontract expenses such as mechanical, electrical or irrigation design
work. Various fees are also considered “soft” but real as well
Specifications
Detailed written instructions, define the qualitative requirements for products, materials, and workmanship upon which the construction contract is based.
Standardized Specifications
Standardized specification are preprinted specifications which typically detail construct or fabrication procedures for typical circumstances
Statement of responsibility
This statement typically occurs in the instruction to Bidders and in the specifications. It assigns responsibility for errors and omissions in the plans and specifications either provided to the contractor or the owner.
Statue of limitations
Many statutes have been enacted by the states and by the federal government requiring a person to commence a lawsuit within a certain period of time. If they fail to do so, the failure to sue within the prescribed time is an affirmative defense available to the other party to the lawsuit
This is a statute defining the time within which a particular action must be taken. For example, it is common for state statutes to specify that tort claims must be commenced within two years after the cause of action arose. If a plaintiff sues after the statute has expired, this is an affirmative defense available lo the defendant.
Subcontractor
Person or company that is hired by a general contractor to perform a specific part of the general contractor’s contract with the owner.
Substantial performance
If every term of a contract is carried out to the letter the parties are said “to have specifically performed their obligations. More commonly changes are made or changes were unavoidable but the obligations were met as best they could given the circumstances and the project is effectively completed. Under these circumstances a substantial performance has been accomplished.
Substantial performance rule
Under the common law of contracts, the obligor must perform their executory duties substantially (not perfectly) in order to be
entitled lo return performance (minus any offset for the part not performed).
Substantive law
Sets the rights of people and the duties governing them in society, i.e. people have
the “rlghr lo freedom of speech and employers have the “duty” of not discriminating among people in hiring.
Sunset law
State laws mandating that regulated professions - usually all professions affecting the public’s health, safety, and welfare - be reviewed every few years to ensure that each profession still needs to be regulated. If not, then the regulation of the profession by the state is rescinded
Surety bonds
Bonds that may be required as a guarantee that contractor will enter into the contract,
be able to complete project according to the plans and specifications, and pay obligations. There are three general types: bid bonds, performance bonds, payment bonds
Terminate according to its own terms
An offerer is the master of their own offer. Accordingly, an offer terminates whenever the offerer specifies (i.e., an offer terminates according to its own terms). For example, an offerer may specify that the offer expires when a certain economic index reaches a certain level or in a certain number of days. After the of/ere terminate by its own terms (or after it is revoked), it may not be accepted.
Terminates in reasonable time
If an offerer fails to specify the date when an offer terminates, then it terminates in a reasonable time. What is reasonable depends on the circumstances. For example, on offer to sell perishable goods would likely terminate more quickly that an offer to self non-perishable goods.
Time of completion
The date established for completion of the contract. This is typically determined
by the number of working days
Tort
This is a legal wrong, which is not a breach of contract, for which the law provides a remedy. The basic categories of torts are intentional, negligent, and strict. For example, the right of an injured person to seek the remedy of an award of damages from someone who trespasses on their land is not created by a contract between the injured landowner and the trespasser. That right is created because the law recognizes the tort of trespass
Unilateral contract
At the moment a contract is made, one party often exchanges a promise to perform in the future (an executory promise) actual performance of an act by another. This exchange of a promise for an act is known as a unilateral contract.
Unliquidated claim
This refers to a claim, the validity or amount of which is not yet determined. For
example, one party may claim damages for breach of contract from another; and the other party may claim there has been no breach. If they agree to settle this claim for a compromised amount, the settlement
agreement is a contract known as an accord and satisfaction.
Valid consideration
One of the four essential elements of a contract. In exchange for one party’s
provision of a service the other party agrees to pay in something of value (usually money).
Value engineering
The name for a process where in changes are made to a project to provide the
besl results for the desired costs. It is commonly applied lo bring a project, whose cost has exceeded its budget by changing to less expensive materials or less amenities white still getting the project properly
implemented according to the parties in the project
Vertical aspect of strict product liability
This answers the question: ‘Who may be sued based on strict product liability?” As a general rule; any seller of the product e.g., manufacturer, wholesaler, retailer Is a potential defendant.
Voluntary consent
This Is a defense to an Intentional tort claim. If the plaintiff, expressly or impliedly, gives permission for the defendant’s behavior and that permission Is given without
coercion and with knowledge, then the defendant’s behavior is privileged.
Work stoppages
To cause work to cease, such as owner causing contractor to cease all work on
his/her project
Acceleration Cost
cost incurred by a contractor when the project is interfered with by the owner, in such a way, that the contractor must employ more manpower or work more hours in order to complete the project on time. If the contractor contributes to the cause of its own delays, acceleration cost may not be granted.
Acceptance
act of a person to whom a thing is offered by another whereby he receives the thing with the intention of retaining it, such intention being evidenced by a sufficient act.
Active interference
Action by a party to a contract that causes the other party of the contract to not complete the work of the project on time or in the manner established by the contract writing. Positive action must be per-formed on the part of the interfering party as
opposed to passive negligence, which is inactive, permissive, or sub-missive.
Actual damages (actual loss)
damages resulting from real and substantial loss, as opposed to those which are merely theoretical, estimated, or anticipated. Actual damages represent the real and true value of the total loss suffered, as opposed to liquidated damages, which represent an estimated amount calculated as anticipated loss at a future time.
Adversary
parties to a contract are in an adversary or arms-length relationship to one
another as a result of the commitment they have made to each other in the con-tract terms and conditions. This relationship is recognized by the courts and binds the two parties together in that relationship. In layman’s language, it can be considered a relationship of mistrust.
Agent
a person authorized by another to act for him or her; one who is employed to represent another in business and legal dealings with third persons. In a typical agency relationship, three parties are involved: a principal, an agent, and a third party. The agent represents the principal in dealing with the third party or parties. In the construction industry, a typical misunderstanding is that the Landscape Architect is the agent to the owner in dealing with the third-party contractor. The Landscape Architect, in a typical contract, is the representative of the owner and not of the
agent. In some contracts, the construction manager is an agent of the owner. An agency
relationship is established in writing (express agency) with all three parties acknowledging the relationship. An agency relationship may also be established by acts and/or omissions of the parties (implied or apparent agency) which will bind the parties legally in the same manner as an expressed agency relationship.
Allowance
a sum of money set aside by the owner to remove a particular portion of work
from competitive bid-ding. This is typical of government-subsidized institutions with work that must be competitively bid and with projects in which certain portions of the work are proprietary and, therefore, must be removed from competitive bidding
Anticipatory breach (anticipatory repudiation)
established when a contractor makes a positive and unequivocal statement that it will not or cannot substantially perform the contract or when a contractor, by any voluntary affirmative act, renders substantial performance of its contract apparently impossible. Based on these two conditions, the owner may terminate the contract immediately or upon completion of a waiting period to determine the contractor’s performance according to the contract writing. In either case, the owner must
establish that the con-tractor’s statement is positive and unequivocal. If the owner terminates the contractor for default after a statement which is ambiguous, the owner will be held to have wrongfully defaulted the contractor.
Assignment
a legal action which allows a person who is not party to a contract to obtain the contract rights of a party who is. A contractor, for example, may assign the rights contained in its contract with the owner to a subcontractor. In a similar manner, the Landscape Architect can assign portions of the design of the project to its consulting engineers, primarily in the areas of structural, mechanical, and electrical design
Attachment
the act or process of taking, apprehending, or seizing person or property by virtue of a writ, summons, or other judicial order and bringing the same into the custody of the law; a remedy ancillary to an action by which the plaintiff is enabled to acquire a lien upon the property or effects of the defendant for satisfaction of judgment which the plaintiff may have obtained.
Betterment
an improvement brought upon an estate (land and/or buildings) which enhances its value more that mere repairs. The improvement may either be temporary or permanent. This term also applies to denote the additional value which an estate acquires in consequence of some public improvement, such as the widening of a street, etc
Bid depository
a clearing house for subcontractors to submit their bids for a particular project and for prime con-tractors to receive bids from the various subcontractors. In California, a
bid depository was found in violation of antitrust laws based on its rules for membership imposing fine, suspension, or expulsion to members not abiding by the rules.
Bid rejection
the act of not allowing a bid to stand because of an impropriety in the process of submission or as a result of the owner’s arbitrary decision to reject the bid. The owner, in a typical contract, reserves the right to reject any and all bids. However, in rejecting a bid, an owner and its Landscape Architect run the risk of interfering with the bidder’s right to do work or of defamation of character on the part of the bidder
Bond
an instrument with a clause, with a sum fined as a penalty, binding the parties to pay the
same, and with the condition that the payment of the penalty may be avoided by the performance of certain acts by some, one, or more of the parties; a certificate or evidence of a debt; a mere promise to perform or pay; a written obligation. In the construction industry, there are several types of bonds, including bid bonds, performance bonds, and payment bonds.
- A bid bond is a form of security to insure that the bidder will enter into the contract if the award is made to it.
- A performance bond insures completion of the project by the con-tractor, guaranteeing that if the contractor defaults, the bonding company will step in and finish the work. A performance bond also is applicable between a prime contractor and its subcontractor, assuring the prime that the subcontractor will perform or pay.
- A payment bond (sometimes known as a labor and material payment bond) provides a source of payment for the contractors’ or subcontractors’ labor and materials
Certificate
a written assurance, or official representation, that some act has or has not been done, that some event occurred, or that some legal formality is being complied with; a written and signed document establishing that a fact is true.
Certificate of occupancy
a document issued by the building inspector certifying that the structure con-forms to all relevant code sections and is, therefore, safe for use. An owner must obtain a certificate of occupancy before he or she can use a building. A new building cannot be considered complete until a certificate of occupancy has been issued. In some instances, a partial certificate of occupancy will be issued for portions of the building to be occupied
Certificate of payment
a document issued by the Landscape Architect in which the Landscape Architect certifies that the contractor has adequately performed. The certificate is then presented to the owner for payment to the contractor
Certificate of substantial completion
the document issued by the Landscape
Architect when the building, or a portion thereof, is complete to the degree that the owner can use the building, or a portion thereof, for its intended purpose.
Change
a revision to the original contract documents. A change differs from a modification in that the modification is agreed to by both parties of the contract; however, a change may be
made unilaterally by the owner in spite of the contractor’s lack of agreement
Claim
A demand, an assertion, a pretense, a right or title to. An action initiated by one of the
parties of a contract against the other party. This action may be in the form of a written letter, a legal document, or some instrument establishing the difference between the two parties. (NOTE: A letter is sufficient, in the eyes of some courts, to establish a claim.)
Immunity
legal status granted to a Landscape Architect in the quasi-judicial role as
arbitrator in settling a dispute between the owner and the contractor. This cloak protects the Landscape Architect from liability by either party (owner or con-tractor) as a result of the decision rendered in resolving the dispute
Collusion
an agreement between two or more persons to defraud a person of his or her right by the forms of law or to obtain an object forbidden by law; a secret combination, conspiracy, or concert of action between two or more per-sons for fraudulent or deceitful purposes.
Contractual duty (contractual obligation)
the obligation which arises from a contract or agreement. In a typical contract agreement, the parties are required to fulfill the duties enumerated in the contract writing between the two parties, but also from the contract agreed to by other parties. An example of this is the duty owed by the Landscape Architect to the contractor as a result of the requirements called out in the contract between the owner and the contractor.
Damages
compensation for a loss or injury suffered; compensation which may be recovered
in the courts by any person who has suffered loss, detriment, or injury, whether to his or her person, property, or rights, through the unlawful act, omission, or negligence of another. In the courts there are many divisions pertaining to damages which cannot be covered here.
Damages, actual
real, substantial, and just damages, or the amount awarded to a complainant in compensation for actual and real loss or injury, as opposed to “nominal” or
“punitive” damages.
Damages, compensatory
repair or replacement of the loss caused by the wrong or injury and nothing more.
Damages, consequential
such damage, loss, or injury which does not flow directly from the act of the party but only from some of the consequences or results of such act
Damages, delay
the economic loss suffered as a result of extended time from that of the original time stipulated in the contract writing. This differs from property damage and personal
damage.
Damages, liquidated
a specific sum of money expressly stipulated by the parties to a bond or contract as the amount of damages to be recovered by either party for a breach of the agreement by the other. In the construction industry, it is an amount established in the contract
writing to be withheld by the owner on a daily basis for every day past the stipulated completion date of the contract. A “liquidated damages” clause is to fix the amount to be paid in lieu of performance. “Penalty” clauses, without some kind of balancing bonus, are rendered unenforceable in the courts of law.
Damages, punitive
awarded by the courts in the amount of three times the actual damage. Treble damages usually apply in antitrust actions
Default
an omission of that which ought to be done; a failure to perform a legal duty
Demurrer
an allegation of a defendant which, admitting the matters of fact alleged by the
bill to be true, shows that they are insufficient for the plaintiff to proceed upon or to oblige the defendant to answer.
Design-build
a method of organizing a building project in which a single entity undertakes
the design and erection of the structure at a set fee negotiated in advance. Unlike the
conventional construction contract whereby an owner hires both a Landscape Architect and a contractor separately, in the design-build contract, the owner negotiates only one contract with one organization.
Deviation
a change made in the progress of a work from the original terms, design, or
method agreed upon
“Differing site conditions” clause (“changed conditions” clause)
typically provides that in the event that the physical conditions at the site of the work vary materially from those represented or reasonable anticipated and in a manner which increases the time or cost of performance, the contractor is entitled to additional compensation or an extension
of time.
Economic loss
additional cost incurred by an individual other than property damage or
personal injury. In the construction industry, an economic loss may be represented by a loss in profits or a loss due to a delay in the contractor’s schedule.
Equitable doctrine
just and conformable to the principles of justice and right; existing in equity; available or sustainable only in equity or only upon the rules and principles of equity.
Equity, court of
court which administers justice according to the system of equity and according to a peculiar course of procedure or practice. Equity denotes the spirit and habit of
fairness, justness, and right dealing which should regulate the interaction of men. Its obligation is ethical rather than jural. It is grounded in the precepts of the conscience, not in any sanction of positive law. It is justice that is ascertained by natural reason or ethical insight independent of the formulated body of law.
Estoppel, promissory
an equitable doctrine which holds the promisor bound to a promise if injustice can be avoided only by enforcement of the promise. A typical application of this doctrine in the construction industry is holding a subcontractor to its bid submitted to the
prime contractor.
Exclusivity of contract provisions
when a remedy for breech is included as a
part of the contract, that remedy is considered exclusive of other remedies provided by law. Some courts do not recognize the exclusivity of a contract provision unless it is specifically
stipulated that the remedy is exclusive. Courts typically will look at all of the facts and circumstances surrounding the agreement as a means of determining the intention of the parties and will refuse to exclude other remedies unless such a result is required by a consideration of the facts of the particular agreement.
Exculpatory language
clause in which a party who may suffer a loss agrees not to institute legal action against the party who may cause the loss. The classic example is a patient who, upon entering the hospital, agrees not to institute any legal action against the hospital or any of the doctors in the event he suffers injury or death because of an act of the hospital or the
doctors. In the jargon of the construction industry, indemnification clauses and disclaimer clauses are considered exculpatory language.
Fast track method
a way of organizing a design pro-gram which allows the contractor to begin construction on earlier phases of the project before the plans are completed for the entire project. Caution must be exercised in the signing of a contract using these fast-track methods
because of the lack of information typically expressed in a conventional method of contract. Many changes may result when going from phase to phase, and provisions must be included in the contract to compensate the contractor for additional work
Fiduciary
a person holding the position of a trustee or character analogous to that of a
trustee in respect to the trust and confidence involved and the scrupulous good faith and candor which are required. In the construction industry, the Landscape Architect and the owner are in a fiduciary relation-ship in respect to the contractor.
Field order
a document issued by the Landscape Architect directing the contractor to erect
some portion of the building in a manner different from that described in the plans and specifications. A field order is issued when the modification will not affect the money and/or the time spent on the project. These factors distinguish a field order from a change order. The change may be requested by the Landscape Architect, owner, or contractor. (Field orders sometimes are known as minor change orders.)
Finality of decision
a contract provision or the procedure of a legally recognized process which states that the decision rendered in the settlement of a dispute is final. Pursuant to such a provision, the courts will accord finality to that decision absent gross error for arbitrary and capricious action. In the arbitration process, the decision rendered by the arbitrators is
final.
“flow-down” clause
in a contract between a subcontractor and a prime contractor, the performance of the sub-contractor will be tied to the prime contractor in the same manner as the prime’s performance is tied to the owner. Some contracts between contractors and subcontractors require more of the subcontractor than is required of the prime contractor by the owner. In a “flow-down” clause, the same requirements are established as a minimum requirement
for the subcontractor.
Four-corner rule
the face of a written instrument. That which is contained on the face of a deed, without any aid from the knowledge of the circumstances under which it is made, is said to be within its four corners. In the construction industry, the contract documents, including the drawings, specifications, general conditions, etc., form the face value of the contract
General conditions
those portions of the contract documents which define, set forth, or relate to contract terminology, the rights and responsibilities of the contracting parties and of others involved in the work, and similar pro-visions of a general non-technical nature. Conditions
can be either expressed, which are stated in the contract, or implied, which are not set forth in words but arise out of the intentions of the parties to the contract
Guaranty
a collateral agreement for performance of another undertaking; a promise to answer for payment of debt or performance of an obligation if the liable person fails to make payment or perform the obligation
Implied contractual provisions
provisions which do not appear in the written embodiment of the agreement, but which exist by implication. These primarily include the implied duties to cooperate and to disclose, the implied warranty of specification suitability, and the implied covenant of good faith and fair dealing. Recovery under these implied clauses may not be subject to the limitations on recovery under the expressed provisions of the contract
Implied warranty
a promise established by implication or inference from the nature of the transaction or the situation or circumstances of the parties
Imputed knowledge
knowledge of a fact which is attributed vicariously to another. Knowledge is said to be imputed to a person when it is ascribed or charged to the person not because he or she is personally cognizant of the fact or responsible for it, but because another
person, over whom the first person has control or for whose acts or knowledge he or she is responsible, is cognizant of it or responsible for it. In an agency relationship, the principal has knowledge imputed to him or her when the agent receives or is made cognizant of that knowledge.
Injunction
a prohibitive writ issued by a court of equity to a party defendant, forbidding the
latter to do some act or to permit its servants or agent to do some act which it is threatening or attempting to commit, or restraining it in the continuance thereof, such as being unjust, inequitable, or injurious to the plaintiff. In the application of the equitable doctrine of promissory estoppel, one can only stop the subcontractor from withdrawing its bid. This is an injunctive procedure preventing the subcontractor from performing an act, but it cannot assess damages against the subcontractor.
Lien, partial waiver of
in the construction industry, a document used to certify that a portion of the total amount due to a subcontractor has been paid and, therefore, that that portion or amount of money cannot be used as a basis for a lien against the property.
Lien, waiver
to deny the right expressed in the lien. In the construction industry, it is a certificate issued upon completion of the work, signifying that all monies have been paid and that the right to lien against the property is removed
Mandamus
a writ issued from a court of superior jurisdiction and directed to a private or
municipal corporation, or any of its offices, or to an executive, administrator, or judicial officer, commanding the performance of a particular act therein specified and belonging to its public, official, or ministerial duty or directing the restoration of the complainant to rights or privileges of which he or she has been illegally deprived; a command from a higher court to a lower court to perform a particular act. In the construction industry, a writ is issued to the contracting officer
conducting a bid opening session or the letting of contracts if the officer is not complying with the proper legal procedures. If a public body is withholding the execution of a contract, mandamus may be applied to compel that body to act.
Mandatory clauses (mandatory provisions)
clauses which must appear in
the contract writing due to their legal status as a federal, state, or local law. The amount of minority business participation or the licensing of a contractor or subcontractor are clauses which fall into this category in certain jurisdictions.
Material variance
a deviation from that which was specified in the original contract documents. In the bid process, a material variance from that which is required in the bid documents will be the basis for rejection of the bid. The degree of variance in a bid process is determined by whether the bidder’s proposal gives it an advantage or benefit not enjoyed by the
other bidders. A mere irregularity in form which can be corrected upon the opening of the bid is not considered a material variance.
Mutuality of assent
compliance, approval of some-thing done, or a declaration of willingness to do something in compliance with a request; an acting by two parties to perform a duty toward each other.
No damage for delay
a clause contained in contracts which grants a party to the contract an extension of time but does not reimburse that party for any additional costs suffered during that time.
Offer
an act on the part of one party whereby it gives to another the legal power of creating
the obligation called contract; a proposal to do a thing; an element of a contract. It must be made by the party which is to make the promise, and it must be made to the party to which the promise is made. It may be made either by word or by signs, either orally or in writing, and either personally or by a messenger; but, in whatever way it is made, it is not an offer in law until it
comes to the knowledge of the party to which it is made. An offer must be so definite in its terms, or require such definite terms in acceptance, that the promises and performances to be rendered by each party are reasonably certain
Patent/latent test
determines whether the danger which caused the damage was latent
(hidden) and, there-fore, beyond the control of the observer or patent (readily seen upon a reasonable inspection) and, therefore, within the control of the observer. Application of this test to the construction industry is enforced when the building is turned over to the owner. If the danger can be observed at the time of the acceptance of the building by the owner, but the owner does not make the contractor aware of the deficiency, then the owner will be held responsible for any future damage. However, if the danger is latent and not observable by the owner, then the contractor will be held responsible for any future damage emanating out of this danger.
Payment bond
a legal instrument which provides a source of payment for labor and materialmen should their employer fail to pay them because of either default or bankruptcy
Performance bond
a legal instrument which assures that if the contractor defaults, the surety company will complete performance or pay damages to the extent of the bond.
Precedent
an adjudged case or decision of a court of justice considered as furnishing an
example or authority for an identical or similar case arising afterward or for a similar question of law. It means that a principle of law actually presented to a court of authority for consideration and determination has, after due consideration, been declared to serve as a rule for future guidance in the same or analogous cases, but matters which merely lurk in the record and are not directly advanced or expressly decided are not precedent
Privity
relationship of a party which has any part or interest in any action, matter, or thing.
Privity of contract is that relationship that exists between two or more contracting parties. In a typical construction project, the contractual relationship between the participants is one of privity between the owner and the design professional and the owner and the contractor. However, there
is no privity or contract between the design professional and the contractor
Quality assurance
policy in regard to assuring that quality will be achieved on a program or project.
Quality assurance program
a plan to implement the policies stated in the quality assurance statement of an organization.
Quality control
the implementation of the quality assurance plan, usually during the construction phase.
Quality control group
the group of personnel assigned to implement quality control during the construction phase.
Quality control plan
an implementation plan for application of the quality assurance policies during the construction phase
Reject any and all bids
a provision of most invitations to bid for both public and private works. In addition, most jurisdictions grant, by statute or ordinance, that same apparent right to all of its political subdivisions. It is the right of the owner or contracting agency to reject any and all bids, generally for some reason. However, some jurisdictions grant outright authority to reject all bids without cause or for any cause it might deem satisfactory. In some jurisdictions and with some government agencies, it must be shown that the rejection was not arbitrary and capricious. In other jurisdictions, the motive for rejection of all bids is immaterial. Yet, in other jurisdictions, there is the requirement that rejection of bids be predicated on good faith and be exercised promptly. Note that the above deals with the affirmative act of rejection of all bids and
not with the disqualification of bidders due to material variance in their submission or with the rejection of one bid. In the rejection of a single bid (the lowest responsible and responsive bidder), other factors come into play. In some jurisdictions, the rejected bidder was awarded costs of its bidding process, while in others, though the cost of bid preparation was denied, the contractor was awarded damages to recover reasonable profits, start-up costs, and postbid costs.
Release of lien
the relinquishment, concession, or giving up of the right to a lien by the party in which it exists or to which it accrues. In the construction industry, it is a document releasing the signer’s (contractor and/or subcontractor) right to a mechanics’ lien on the project.
Responsible bidder
one who has the capability, in all respects, to fully perform the contract requirements and the integrity and reliability to assure good-faith performance
Responsive bidder
one who has submitted a bid under a competitive sealed bid which
conformed in all respects to the invitation for bids so that all bidders may stand on equal footing with respect to method and timeliness of sub-mission and as to the substance of any resulting contract. One is responsive if one replies to the specific questions set forth. In the text of public
works contracts, one must respond clearly and without qualification to all inquiries addressed to the invitation to bid.
Retainage
an amount of money established by a fixed percentage agreed to in the contract
writing that is with-held by one party of the contract from the other as a means of security and/or assurance of performance. In the construction industry, retainage is withheld by the owner against the prime contractor, and the prime contractor, in a similar manner, withholds from its subs. A typical percent-age in the construction industry is 10 percent of the amount paid on the progress payments until 50 percent of the work is completed. At that time, the owner may discontinue withholding the retainage
Risk-shifting techniques
typical risk-shifting clauses include indemnification clauses, surety requirements (bid bond, performance bond, and payment bond), “no damage for delay” clauses, etc. Another similar clause is the “condition precedent to payment” clause, which requires the prime contractor to pay his subcontractor only after he has been paid by the owner
Standard of performance (standard of care)
that standard which a professional (doctor, lawyer, Landscape Architect, engineer, etc.) must exercise to the degree of care and expertise which a reasonably competent professional of the same discipline would
exercise under the circumstances. The standard of performance is established by the professionals working in the same geographical area.
Strict liability
liability without fault. A case is one of strict liability where neither care nor negligence, neither good nor bad faith, and neither knowledge nor ignorance will save the
defendant.
Termination for default
construction contracts generally contain specific provisions itemizing events of default. However, even if not specifically itemized, delay in performance resulting in a failure to complete the contract in a timely fashion is universally recognized as a breach of contract. Whether the breach for untimely performance justifies an owner in terminating the contract may depend upon whether “time is of the essence” for performance of the contract. In federal construction contracts, time is of the essence, and if the contractor fails to perform by the date specified, the government may terminate the contract for default. In private contracts, where time is of the essence, the owner has a common-law right to terminate if the contractor fails to perform within the time specified, unless the time for performance has been waived or extended by the acts of the party
Turnkey contract
a method of organizing a building project in which a contractor and a designer agree to provide a finished building at an agreed-upon price. Upon completion of the project, all the owner has to do is “turn the key” in the door. Most turnkey projects are built for the Department of Housing and Urban Development (HUD).
Unified bid
in a multiple prime construction contract, solicitation for bids is presented to the
bidders in several separate prime contract packages. In a unified bid procedure, the bidders are permitted to bid on either one or as many of the bid packages as are presented
Basis of payment
The three bases of payment are stipulated sum, unit price, and cost-plus fee
Bid form
The bid process requires a bid form that is prepared as a document that the bidder will submit to the owner.
Binding arbitration
Upon demand for arbitration, the parties to the contract select a neutral arbitrator or panel of arbitrators and the matter is submitted for a decision. The method is very similar to litigation, but offers a more expeditious resolution
Change directive
Directs the contractor to make a change to the project before the owner and contractor have agreed upon the proposed changes in contract sum or time. Change directives are used in the absence of an agreement between the owner and the contractor on the terms of a change order or when the value of a change cannot be determined until after the work is performed
Change order request
A change order request may be used by the contractor to initiate proposed changes that the contractor deems necessary
Closeout meeting
Used to review requirements for the completion of the contract and to obtain submittal of the necessary final documents
Closeout submittals
At or near the completion of a project, a number of submittals are processed, including: written notices of substantial and final completion (prepared by the contractor) and delivered to the A/E, indicating when the contractor believes these milestones are reached
Contingency allowance
The negotiated cost should include contingency allowances for unforeseen circumstances due to the incomplete nature of the information available at the time of negotiations
Cost plus fee
Cost of the actual direct expense of construction work plus a fee for overhead and profit usually based on partially completed construction documents for a defined scope of work. The fee can be fixed, a percentage of the actual direct cost, or some other arrangement
Outline specifications
Aid in the design process and are the basis for revising cost estimates, schedules, and value analysis studies. They also serve as a checklist for the project team when selecting products and methods during development of the project manual.
Part 1 General
One of three groups of related information that make up a section in CSI specifications.
Describes administrative, procedural, and temporary requirements unique to the section. Part 1 is an extension of subjects covered in Division 01 and amplifies information unique to the section
Part 2 Products
One of three groups of related information that make up a section in CSI specifications.
Describes products, materials, equipment, fabrications, mixes, systems, and assemblies that are required for incorporation into the project. Materials and products are included with their quality requirements
Part 3 Execution
One of three groups of related information that make up a section in CSI specifications.
Describes installation or application, including preparatory actions and post-installation cleaning and protection. Site-built assemblies and site-manufactured products and systems are included
Pre-bid meeting
Normally convened at the site, allows the owner, A/E, and consultants to orient the prospective contractors to conditions affecting the project
Preliminary project description (PPD)
Preparing the the preliminary project description requires the design team to think the project through and document decisions and design criteria in broad terms. Changes can be made during development of the document and throughout subsequent refinement and value analysis stages, without disrupting the ongoing process
Procurement documents
Consist of the procurement and contracting requirements and the proposed contract documents. They are used to solicit pricing in the form of bids or proposals from prospective contractors.
Procurement requirements
Instruct the bidders or proposers about the established procedures for preparing and submitting their bids or proposals.
Progress meetings
Concern the progress of work. They provide a forum in which matters pertinent to the timely completion of the work can be discussed
Project conception stage (life cycle)
Consists of activities that transform the needs or aspirations of the owner into a clear concept upon which the project can be designed and built. Stage in which an owner’s needs are identified, preliminary studies are performed, a site is selected, and a preliminary budget and schedule are established
