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Once the contractor has been selected the architect must prepare the contract for execution (signing). The owner and the contractor should sign the building contract before any building work commences. In some states, this is mandatory for residential work.
The ideal place for the execution of the contract is at a joint meeting between the parties, preferably in the architect's office. While not a party to the contract the architect can act as a witness to the signing if required and, in the process, will be able to ensure all documents are correctly signed, dated and initialled as appropriate by both parties.
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The ABIC suite of contracts comprises three copies of the contract, which the architect must ensure are correctly completed, dated and signed. Usually, two sets of documents are signed, one for the owner and one for the contractor. A third should be prepared for the architect as a reference copy, but need not be signed. Refer to the ABIC User Guides for document preparation and signing.
It should be noted that the two signed contracts are of equal status.
The architect should ensure all special conditions, alternatives, schedules, blanks etc, are correctly filled in and addressed to reflect what has been agreed for the particular project.
Where the contract agreement includes an appendix or a series of schedules, the appendix and/or the schedules must be completed. There should be no blank spaces unless the default provision noted is to apply. (Alternatively, the default provision can be inserted exactly as noted). Each item must be either filled in with the appropriate information or struck out and designated as 'deleted' to clearly indicate its status within the contract.
The architect may, as the agent for and with the prior agreement of the owner, arrange for the owner's copy of the contract to be filed at the architect's office if a third copy is not prepared.
While it may appear excessive, it is appropriate for the parties signing the contract documents to initial or sign each page or drawing and to initial each hand-written amendment within them.
If one of the parties is an incorporated body (ie a company), the method of execution should be checked. Usually, two directors or one director and the company secretary must sign. If the company's constitution requires it, the signatures must be accompanied by the company seal. The architect should, therefore, ask for confirmation long before the event if the seal is required.
If the parties are individuals or a partnership, the opposite party may insist on a witness to the party's signature or signatures. There should be a separate witness for each party if both require witnessing. There is nothing wrong with the architect being a witness to one party, but there is some doubt about the legality of the architect being the witness to both parties. It is, therefore, a good idea when arranging the signing of documents to have another person present who can witness the contractor's signature, if you intend to act as the witness for the owner. A witness must be identifiable and should print their name with their signature on any document they sign. In common law, a witness should not be a related party to the person signing the document.
All documents included in the contract set must be signed and it is good practice to require both parties to initial specific changes or amendments on any particular page thereby indicating agreement to the amendment or change of text.
The drawings
The drawings need to be clearly identified as being part of the set of contract documents. This can be done with a stamp (example below) applied to each drawing with appropriate spaces for signing by both parties and inserting the relevant date. Alternatively, a space can be included as part of the title block on each drawing for the signatures and date. In all cases, the stamp and/or title block will need to designate the fact that this is a ‘contract drawing’.
A sample stamp is as follows:
This is a document referred to in the contract dated [day/month/year] between:
| Owner name: | ____________ | Witness name: | ____________ |
| Owner signature: | ____________ | Witness signature: | ____________ |
| Contractor name: | ____________ | Witness name: | ____________ |
| Contractor signature: | ____________ | Witness signature: | ____________ |
The specification
The specification also needs to be clearly identified as being part of the set of contract documents. Again, this can be done with a stamp (as above) applied to the cover of the specification indicating that it is the 'contract copy' of the specification. Some clients insist that both parties initial every page of the specification. Alternatively, a face sheet signed by the parties may be inserted describing the specification with the relevant number of pages and sections. For most projects, owners and contractors will be satisfied with a contract specification where the cover clearly indicates the status of the document.
Bills of quantities
Where the selected form of contract agreement requires a bill of quantities to become part of the contract documents, the bill will be executed in a similar manner to the contract specification. Where a priced set of bills of quantities is required, it is wise for both parties to initial every page of the document.
Contracts and copyright
Similar to the intellectual property an architect may hold in drawings it prepares, written contracts may also constitute the intellectual property of the person who has prepared that contract.
Additionally, standard form contracts typically used in the Australian market, such as the contract forms published by Standards Australia or other industry bodies, are subject to copyright and licensing restrictions.
Where a contract is subject to copyright, use of that contract (including photocopying or transcribing a contract with the use of a word processing tool) may constitute a breach of copyright.
You should take care to consider whether there are any restrictions or limitations on your use (including adaptation or modification) of contracts prior to attempting to do so. This includes considering whether additional steps are required in order for you to use a document provided by a client, such as obtaining:
- a warranty from the person providing the contract that they have the right to use the document and allow you to use the document supported by an indemnity in the event of any claim by a person asserting ownership of the copyright
- a licence to use the document provided by the person who holds the intellectual property in the contract.
In addition to copyright, there are other risks that may arise from working with a form of contract provided by a client. These include:
- Transcription risk: It is very easy to make mistakes in transcribing a contract. These could be significant. If a loss was suffered by the client due to a transcription error, the client could have an action against the architect.
- Familiarity with terms: If a bespoke contract is issued as part of a tender package (rather than terms with which tenderers may already be familiar), tenderers may require additional time to review those terms and may also increase their tender pricing to account for its unfamiliarity with those terms.
- Interpretation of terms: The terms of contracts that are based on standard forms may have been considered by courts. Therefore, case law may exist regarding the way particular terms have been interpreted which can assist parties in having greater certainty interpreting a particular term if a dispute arises.
Digital signing
Signing the ABIC contract documents digitally or exchanging digital copies by email is an acceptable method that can make the contract legally binding. State and federal legislation (eg the Electronics Communications Act in your relevant jurisdiction) permit and facilitate legally-effective actions performed under a contract under most circumstances.
Disclaimer
This content is provided by the Australian Institute of Architects for reference purposes and as general guidance. It does not take into account specific circumstances and should not be relied on in that way. It is not legal, financial, insurance, or other advice and you should seek independent verification or advice before relying on this content in circumstances where loss or damage may result. The Institute endeavours to publish content that is accurate at the time it is published but does not accept responsibility for content that may or has become inaccurate over time. Using this website and content is subject to the Acumen User Licence.