Construction Case Study
Case Overview
Oliver Owner has decided that it would be a good investment to build a large suburban office building on some unimproved land that currently owns. However, since he does not know much about construction, he has hired a professional project manager firm, CMI, to manage the project. However, when Mr. Owner was away for personal reasons, CMI exercised its authority to select an electrical contractor from three pre-authorized contractors that were selected. When Mr. Owner returned, he accused CMI of exceeding its authority by signing a contract with the electrical firm on his behalf. Other problems also arose from the contracts related to the electrical work to be done of the suburban office project such as a request to retract a proposal as well as a misunderstanding about what the security deposit that the contractors entailed. This analysis will provide a brief background in legal considerations that the owner, project manager, and electrical contractors are dealing with in this scenario.
Project Management Contractual Agreements
There are several different forms of agreements that parties can use to form a working relationship with a project manager on any construction project. The most common form of a contractual arrangement is that a project or construction manager acts in an advisory role to the owners or investors who have hired them to work on the proposed project. The case alludes to the fact that Mr. Owner signed an AIA form authorizing CMI as a construction manager that had the authority to enter into negotiations with contractors on their behalf.
However, the case fails to mention exactly which AIA contract was used and there are several different contracts that AIA offers. The AIA has been drafting contracts since 1888 and has become a popular option for individuals or companies to use for contracts that are related to construction,...
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