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Project Relationships

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). Agency. appoint. Principal. Agent (arch/engr). (Owner). consent. consent.

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Project Relationships

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  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) • Agent’s 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 arm’s 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

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