AIA Document A421–2018 is a Master Agreement between the Contractor and Subcontractor. It is intended for use when the Subcontractor’s scope of Work will subsequently be specified through one or more Work Orders. A421-2018 provides only the common terms and conditions that will apply to each Work Order. Use of A421 plus a Work Order creates a contract that includes both the terms and the scope of Work. A421-2018 is coordinated for use with AIA Document A422™–2018, Work Order for use with Master Agreement Between Contractor and Subcontractor. The Master Agreement plus Work Order contracting method allows multiple scopes of Work to be issued quickly without renegotiating the terms and conditions of the Contract. For all document details and a record of changes, see the summary »
Date. The date represents the date the Master Agreement becomes effective. It may be the date that an oral agreement was reached, the date the Master Agreement was originally submitted to the other party, the date authorizing action was taken, or the date of actual execution.
Parties. Parties to this Agreement should be identified using the full legal name under which the Agreement is to be executed, including a designation of the legal status of both parties (sole proprietorship, partnership, joint venture, unincorporated association, limited partnership, or corporation [general, limited liability, closed or professional], etc.). Where appropriate, a copy of the resolution authorizing the individual to act on behalf of the firm or entity should be attached. Other information may be added, such as telephone numbers and electronic addresses.
Article 1 – Master Agreement Term and Party Representatives
§ 1.4 Insert the name, title, and other identifying information of the individual authorized to act on the Contractor’s behalf with respect to this Master Agreement. This may be the same or a different individual than the representative authorized to act on the Contractor’s behalf with respect to, and identified in a Work Order.
§ 1.5 Insert the name, title and other identifying information of the individual authorized to act on the Subcontractor’s behalf with respect to this Master Agreement. This may be the same or a different individual than the representative authorized to act on the Subcontractor’s behalf with respect to, and identified in a Work Order.
Article 8 – Claims and Disputes
§ 8.3 Select from three choices of binding dispute resolution: (1) arbitration, (2) litigation, or (3) another method that the parties must identify. Other types of dispute resolution include a dispute resolution board or a mini-trial. For additional information about other methods of dispute resolution, refer to The Construction Industry’s Guide to Dispute Avoidance and Resolution or visit adr.org for more information.
Article 10 – Payments
§ 10.1.5 Insert the time schedule for presenting Applications for Payment.
§ 10.1.10.1 Insert the percentage or amount of retainage, if any, to be withheld when computing the amount of each progress payment.
The Subcontractor is usually paid the bulk of the earned sum when payments fall due, retaining a percentage to ensure faithful performance. These percentages may vary with circumstances and localities.
§ 10.1.10.1.1 Certain items included in the Subcontract Sum may be excluded from the calculation of retainage. Where there are any limitations or exclusions from retainage, list those items.
§ 10.1.10.2 The AIA endorses the practice of reducing retainage as rapidly as possible, consistent with the continued protection of all affected parties. A provision for reducing retainage should provide that the reduction will be made only if the Contractor judges that the Work is progressing satisfactorily. If the Subcontractor has furnished a bond, demonstration of the surety’s consent to reduction in or partial release of retainage must be provided before such reduction is effected. Use of AIA Document G707A™ is recommended. Insert terms for reduction or limitation of retainage.
§ 10.3.1 Insert any provision for earlier final payment to the Subcontractor. When final payment is requested, the Contractor should ascertain that all claims have been settled or should define those which remain unsettled. The Contractor must also determine that the Architect has issued a certificate for payment covering the Subcontractor’s completed Work and that the requirements of the Subcontract have been fulfilled.
§ 10.4 Payments due and unpaid under the Subcontract bear interest from the date payment is due at the legal rate prevailing from time to time at the place where the Project is located. If a different interest rate is to be paid, insert the amount here.
Article 11 – Insurance and Bonds
§ 11.1.1 Insert types of coverage and limits of liability to be maintained by the Subcontractor, which may arise out of or result from the Subcontractor’s operations and completed operations under the Work Order.
§ 11.1.3 Insert the duration after completion of the Work that the Subcontractor will be required to maintain professional liability insurance, if professional liability insurance is required.
Article 12 – Miscellaneous Provisions
§ 12.3.3 Section 12.3.1 allows the Contractor and Subcontractor to provide notice in electronic format. It is recommended that the parties use AIA Document E203™–2013, Building Information Modeling and Digital Data Exhibit, to establish the protocols for electronic communication. If AIA Document E203–2013 is not used, insert the requirements for delivering notice in electronic form, such as the name, title, and email address of the recipient and whether the system will be required to generate a read receipt (recommended), in Section 12.3.3. While notice in electronic form may be provided as set forth in this provision, other protocols for the use or transmission of digital data and BIM are established through the use of E203-2013, pursuant to Section 12.6.
Executing the agreement.
The persons executing AIA Document A421–2018 should indicate the capacity in which they are acting (i.e., president, secretary, partner, etc.) and the authority under which they are executing the Master Agreement. Where appropriate, a copy of the resolution authorizing the individual to act on behalf of the firm or entity should be attached.
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Modifications. Particularly with respect to professional or contractor licensing laws, building codes, taxes, monetary and interest charges, arbitration, indemnification, format and font size, AIA Contract Documents may require modification to comply with state or local laws. Users are encouraged to consult an attorney before completing or modifying a document.
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