As you would expect, all AIA Owner-Contractor agreement forms assume that an architect will take a lead role as the Owner's agent so they are rarely used for residential projects. Some companies have copied these forms altering them to leave out an architect and to be more attractive to contractors.

It is not standard to have a mandatory arbitration clause in an AIA agreement; the parties can choose what method of dispute resolution they want to use but it is usually standard in contracts written for large home builders.

We started with a draft taken from Susan Solakian's book. The contract per se took about three rounds of comment and discussion over the course of a week, no lawyers involved (but I read and edit a lot of contracts). The detailed specifications for the project took several additional rounds to get completely clear.

I looked at the AIA document and it seemed as if its primary purpose is to protect the architect on the project. Starting with it I would have had to re-write probably 80% of it-- it was essentially useless. I can understand why architects like it though.

Here is a link that might be useful: book

I often run into complaints on the Garden Web that AIA agreement forms are intended to protect architects. I believe this is the result of a basic misunderstanding of the nature of the relationships of the different parties involved in a construction project.

A construction contract can only be between two parties: the Owner and Contractor. No one else is or should be privy to the contract. When a homeowner untrained in design and construction wishes to take advantage of the knowledge and experience of a licensed design professional like an architect during the construction of their home, it is necessary to define the role of the architect in the Owner-Contractor agreement so that the architect does not inadvertently usurp the role of the other parties and become responsible for things over which he/she has no control.

It should be obvious that the architect should only be responsible to the Owner and not the Contractor and that the architect should not be held responsible for the work of the Contractor. The wording of an AIA contract is intended to make that clear.

I've acted as an owner's consultant for many construction projects over the past 45+ years and have never found an agreement better written than the AIA forms. If an architect is not involved, it is easy to cross out the clauses that describe the architect's role without rewriting anything.

Unfortunately, the AIA has little interest in home building nor do most architects, or at least those who wish to make a reasonable living and retire before they are 80. Therefore, the combination agreement + general conditions forms for small projects are not as short and simple as they were in the 70's but then nothing is.

An arbitration clause is helpful and avoids costly legal fees for both parties, imo. Both sets of contractors I have worked with had binding arbitration clauses. I also volunteer on 3 non-profit boards, and the recommendation is for binding arbitration clauses for contracts that we make. It is less expensive (and the outcomes are rarely different than if you worked through the more costly court system).

An arbitration clause is helpful and avoids costly legal fees for both parties, imo. Both sets of contractors I have worked with had binding arbitration clauses. I also volunteer on 3 non-profit boards, and the recommendation is for binding arbitration clauses for contracts that we make. It is less expensive (and the outcomes are rarely different than if you worked through the more costly court system).

The other important issue to understand is that the language of the AIA forms and agreements are generally considered the standard of the construction industry since the language is court tested. Forms and agreements are consistently reviewed and revised, as needed, on a regular basis based on experience and court rulings.

Unless one is an experienced construction attorney, anyone who invents their own agreement language (or accepts the agreement language of others) may be putting themselves in undue risk.

Contrary to popular wisdom arbitration and litigation are both slow, expensive and risky for both parties. The best way to settle a dispute is out of court and out of arbitration.

Some older AIA contracts required the architect to recommend a non-binding solution before any formal process began. Some saw this as giving the owner an unfair advantage and others saw it as the best chance to avoid a costly and painful process regardless of who was right.

I took a look at the book referenced above and found that it calls for mediation then binding arbitration.

The sample contract is oddly written. It seems to jump straight into the Terms and Conditions of the contract omitting the most important elements of a construction contract: a description the nature of the work of the contract, establishment of a date of commencement of the work and a description of the method to be used to compensate the contractor (Stipulated Sum, Cost of the Work with a Fee, etc.) and any limits on that compensation. This information appears to be buried in the terms and conditions and the "contract amount" appearing as the last item. It seems to be in the traditional format of a contractor's proposal.

Another odd thing is that it provides for the names and signatures of three parties: the property owner, the contractor and the "owner's agent." The owner's agent is described in the terms and conditions as follows:
"The owner may assign an agent to make decisions on his behalf. If an agent is designated, the property owner hereby agrees to abide by their decisions and to pay for the work directed or approved by the agent. A limited power of attorney is attached to this contract and incorporated by reference if the decision maker is not one of the property owners."

If the owner's agent were to be an architect, this contract would expose him/her to the same liability as the owner. Not only would the architect's errors and omissions insurance not cover this added responsibility but the architect would be forced to carry general construction liability insurance. For many residential projects I suspect the cost of this insurance might even exceed the architect's fee.

When something goes wrong on a construction project a third (or fourth) party often sues everyone involved and architects are often required to contribute to a settlement even if the issue did not involve their services or their performance. Professional insurance carriers are often happy to throw in your deductible amount and raise your rates. It appears to me that this contract expects that the designated owner's agent will be a construction manager rather than a licensed design professional and already be insured for project liability.

Here is a link that might be useful: sample contract