Project Relationships

1
Project Relationships

• Many relationships on a project
• Owner-builder contract
• Employee-employer contract
• General contractor-subcontractor
• Principal-agent
• Principal- Independent
• Sale of Goods (UCC governs)

2
Agency
appoint

• Principal

Agent (arch/engr)
(Owner)
consent
consent
appoint
Independent (contractor)
Agency represents complicated control but
commercial necessity. Best choice from among
several bad choices
Agents have special duties (fiduciary
obligations) not typical in independent contracts
3
Agency

• Agents must act in best interest of principal
  (hard to measure and enforce)
• Agents authority should be in writing
• Agent protected by reasonableness standard and
  custom/usage doctrines
• Apparent authority allows agent to bind
  independents (sort of)
• Agency contracts exist for specific time and
  purpose
• Agency causes many lawsuits in construction

4
Project Relationships

• Principal-Agent
• Owner-architect/engineer
• Owner- construction manager
• Architect, engineer, construction manager, are
  agents of the owner (principal)
• Must act in the best interest of the owner
• Agents have a fiduciary responsibility

5
Project Relationships

• Principal-Independent
• More arms length than agent contract
• Sole responsibility clauses
• Principal not responsible for actions of the
  independent
• Principal cannot specify means and methods
• Independent need not act in best interest of the
  principal