Terms Flashcards
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. (See CONTRACT)
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.
ADDENDA
modifications to the contract documents issued during the bid period. Addenda become official parts of the contract documents and are legally binding to the signatories of the contract.
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 rela- tionship, 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 con-tractor. The Landscape Architect, in a typical contract, is the represen- tative 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.
ALTERNATE
a material or method used in place of the base material or method specified for the project. In a typical construction contract, the owner chooses the alternate or remains with
the base requirement, giving it control over the total cost of the project. An alternate differs from an option in that cost is a factor in the selection of an alternate by the owner, whereas an option does not have cost as a factor and the choice is made by the contractor. (See OPTION)
AMBIGUITY
doubtfulness; doubtfulness of meaning, duplicity, indistinctness, or uncertainty of meaning of an expression used in a written instrument. The courts, interpreting a writing, will permit parol evidence to clarify the writing if the writing is in fact ambiguous. However, the courts will not permit parol evidence if the writing is clear, even though it may be in error. (See PAROL EVIDENCE)
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.
ANTITRUST LAWS
federal and state statutes to protect trade and commerce from unlawful restraints and monopolies. In the construction industry, bid rigging is considered a violation of antitrust laws. Those found guilty of bid rigging are assessed treble damages. (See BID RIGGING)
APPARENT AGENCY
an agency relationship created by an act of the parties and deduced from proof of other facts. (See AGENCY)
ARBITRATION
the submission of a dispute to a third party (individual or panel), known as arbitrator(s), whose judgment is final and binding. Decisions at arbitration hearings, unlike those in judicial cases, do not establish precedents.
ARBITRATOR
one who resolves disputes between two par-ties. In a typical construction contract, the Landscape Architect is designated as an arbitrator in resolving the disputes between the owner and the contractor. Unlike formal arbitration (as established by the American Arbitration Association), an Landscape Architect acting as arbitrator in the construction process is the first level for resolving disputes, and its decision is not final and binding.
LANDSCAPE ARCHITECT
the person or organization hired by the owner to design the project. The Landscape Architect’s duties consist primarily of the production of the plans and specifications from which the building will be constructed. The Landscape Architect may also preside at the bid opening, monitor the construction process to assure that the owner’s interests are protected, and approve payments to the contractor. Its relationship to the owner is that of
an independent contractor. All Landscape Architects must be licensed by the states in which they practice. In addition to the contract with the owner, the Landscape Architect also will enter into contracts with consultants (structural, mechanical, electrical engineers,etc.) but will not execute a contract with 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. (See LIEN)
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
an offer to perform a contract for work and labor or for supplying materials at a specified price. In the construction industry, a bid is considered an offer by the contractor to the owner. A bid, as an offer, becomes a contract once the owner accepts the bidder’s offer with all other contractual requirements in order. (See CONTRACT)
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.
BOARD OF CONTRACT APPEALS
an independent administration quasi-judicial board to decide all public con-tract disputes. Various states have created these boards to relieve the courts from the backlog of cases related to public contracts. Note that these boards hear only disputes related to public contracts and not to private contracts.
BOILER PLATE
a term used to represent standard legal conditions inserted at the “front end” of a construction contract. These conditions are typically titled “General Conditions,” “Supplemental Conditions,” and/or “Special Conditions” and are inserted at the front end of the project manual.
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 materialmen.
BUILDER
one whose occupation is the building or erection of structures, the controlling and directing of construction, or the remodeling and adapting to particular uses of buildings and other structures. The term “builder” is sometimes used interchangeably with the word “contractor.” (See CONTRACTOR)
BUILDING CODE
there are several model codes, including Southern Standard Building Code (SSDSC), Uniform Building Code (UBC), Building Officials and Code Administrators (BOCA), the National Building Code (NBC), and the International Building Code (IBC) one of which is enacted in most jurisdictions. A code is not applicable in a certain jurisdiction or locality until it is enacted (legislated) into local law.
CAPACITY
the attribute of persons which enables them to perform civil or juristic acts; necessary for parties entering into a contract. (See CONTRACT)
CASE LAW
the aggregate of reported cases forming a body of jurisprudence or the law of a particular subject as evidenced or formed by the adjudged cases; distinct from statutes and other sources of written law.
CAVEAT
a caution; literally, “let him beware.”
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. (See SUBSTANTIAL COMPLETION)
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.
CHANGE ORDER
a document issued by the Landscape Architect directing the contractor to erect some portion of the building in a manner different than described in the original plans and specifications. This change must have an effect on the price and/or time of the contract in order to constitute a change order. If the price and/or time is not affected, then the change is a field order or minor change order and not a change order. The change may be requested by the Landscape Architect, owner, or contractor.
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. (See IMMUNITY)
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.
COMPETITIVE BIDDING
a process whereby sealed proposals are submitted to the owner for consideration. Competitive bidding is mandatory on public works projects. A private owner may choose to use competitive bidding in securing the most economical contractor for the construc- tion of the project. However, a private owner is not legally bound to the competitive bidding process.
