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1.4.02 THE CONTRACTOR AGREES (Continued)

a. Contract Time: Work under this Agreement shall be commenced upon written notice to proceed, and

shall be completed within

calendar days of the commencement of the Contract Time as defined in the General Conditions of the Contract.

b. Sub-Contractors: The Contractor agrees to bind every sub-contractor the terms of the Contract Documents. The Contract Documents shall not be construed as creating any contractual relation between any sub-contractor and the Owner.

1.4.03 THE OWNER AGREES to pay, and the Contractor agrees to accept, in full payment for the per formance of this Contract, the Contract amount of:

Dollars ($

in accordance with the provisions of the Contract Documents.

a. Progress Payments will be made in accordance with the General Conditions of the Contract.

1.4.04 CONTRACT DOCUMENTS: The Contract comprises the Contract Documents listed in Paragraph 2.1.01 of the General Conditions of the Contract. In the event that any provision of one Contract Docu ment conflicts with the provision of another Contrace Document, the provision in that Contract Document first listed below shall govern, except as otherwise specifically stated:

a. Agreement (This Instrument)
b. Addenda to Contract Documents
c. Remaining Legal and Procedural Documents

1. Proposal
2. Information for Bidders

3. Advertisement
d. Detailed Specification Requirements
e. Drawings
f. Modifications of the General Conditions of the Contract (Section 2.8)
8. General Conditions of the Contract (Sections 2.1 through 2.7)
h. Bonds

1. Performance Bond
2. Labor and Material Payment Bond
3. Proposal Guaranty

1.4.05 AUTHORITY AND RESPONSIBILITY OF THE ENGINEER: All work shall be done under the general supervision of the Engineer, The Engineer shall decide any and all questions which may arise as to the quality and acceptability of materials furnished, work performed, rate of progress of work, interpretation of Drawings and Specifications and all questions as to the acceptable fulfilment of the Contract on the part of the Contractor,

1.4.06. SUCCESSORS AND ASSIGNS: This Agreement and all of the covenants hereof shall inure to the benefit of and be binding upon the Owner and the Contractor respectively and his partners, successors, assigns and legal representatives. Neither the Owner nor the Contractor shall have the right to assign, transfer or sublet his interests or obligations hercunder without written consent of the other party.

CONSULTING ENGINEERS COUNCIL
Contract

Document 14
Copyright 1960 – 3rd Printing

L.7

1.4.07 SPECIAL PROVISIONS: The Owner and the Contractor mutually agree that this Agreement shall be subject to the following Special Provisions, which shall supersede ocher conflicting provisions of this Agreement

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1.4.08 IN WITNESS WHEREOF, the parties have made and executed this Agreement, the day and year first above written.

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Mr. ABERNETHY. Mr. Faulkner and his associate, when they were at the table, testified to this, but are there other States who in establishing their statute of limitation use the words "substantial completion" in their statutes?

Mr. LUNCH. Yes, I am sure there are. It will take me a minute or two, but I can find them. Or I can file it later. I am sure there are those who use that phrase.

Mr. ABERNETHY. Maybe those who preceded you at the table could tell us what States they are.

Mr. FAULKNER. The State of Nevada uses it, Kentucky, South Dakota. Mr. Lunch. Florida. I am going through rather quickly the file " "hese laws. Florida uses it.

ULKNER. Also South Carolina. Chairman, could I say one word in regard to this? F. ABERNETHY. Yes. Mr. FAULKNER. This is a term that has come into general use rather recently.

The latest document of the general conditions, issued by the American Institute of Architects, recognizes this and has a definition. I am sorry I do not have it with me, but it is coming into general use in the architectural and building professions.

Mr. ABERNETHY. All right. You gentlemen may proceed.

Mr. KELLER. One thing I would like to say is that in nine out of ten of the buildings that we do, the owner most of the time moves into the buildings before it is complete, they are so anxious to get into the building that they will take them before they are 100 percent finished.

Mr. ABERNETHY. All right.
Mr. Fraser?

Mr. Fraser. What would be the problem, supposing it were just left to the words “substantially completed” and suppose that is all the statute were to say. It did not seek to spell out what it meant but left that for the courts to decide. I am a little bothered by this "first used" clause because it seems to me things get used for a while, maybe, and then they may move out again.

Mr. Lunch. As a matter of fact, in the statement that is filed with the committee on behalf of the National Society of Professional Engineers, there is attached a copy of a so-called model statute developed by several of the societies. In that so-called model there is no definition. The phrase is used but there is no definition. I was at the meetings when that was considered by the various attorneys and the feeling at that time was we would just leave that to the courts to determine under applicable State law as to what that phrase meant.

Mr. FRASER. The point is, it seems to me, the test of use is quite uncertain. You might use a part of it that was livable or usable, and this might have no relevance to the time at which the negligent act took place, which might have been even later.

Mr. Lunch. You often do have situations where on a completion project we may be only talking about part of a building. The owner may use part of that building a year or two years or more before the rest of the project would be completed. This is not unusual.

Mr. FRASER. Right. I have two more questions,
Is it the practice to have liability insurance?
Mr. KELLER. Yes, sir, very definitely.

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Mr. FRASER. You are a builder?
Mr. KELLER. No. I am a consulting engineer, a design engineer.
Mr. FRASER. You do customarily carry professional insurance; it
is available to you?

Mr. KELLER. Yes, absolutely. Mr. FRASER. That covers your liability no matter what the statute of limitations may be? Mr. KELLER. This is true. Mr. FRASER. Now, the last question: What is the statute of limitations for personal injury in the District? Is it three years? Mr. LUNCH. Three years. Mr. Fraser. Apparently the Bar Association was concerned with setting a special category for this particular kind of injury.

Jr. Lunch. Apparently they have some concern. I am not familiar with it. Mr. Fraser. Thank you. Vr. ABERNETHY. Mr. Winn. Mr. Winn. I do not have any questions but I am 100 percent sure that practically every contractor you talk about has liability insurance. I happen to be a contractor and I don't know that we will ever get the answer to “substantial completion." I don't know that there is such a thing because every building and every possession, whatever you might want to call it, is different under the different agreed circumstances that this gentleman referred to. Of course, as time grows closer to their agreed contractual date or their possession date, whatever you might want to refer to it as, then the owner gets more anxious to get in, particularly if he has to move out of some other location. He exempts the punch list--this is the first time I have ever heard it referred to as a punch list, but it is a complaint list, a maintenance list, however you want to refer to it. This part of the agreement, that the man accepts the building with the agreement that this list will be completed within a certain period of time. You also have the Warranties. What are the warranties in the District for commercial construction, the length of time?

Vír. KELLER. The normal would be a year. Mr. Lunch. They may vary, Mr. Winn, depending on the product or the equipment involved. Roofing may be one thing, but power equipment, motors, generators may be something else. I wouldn't know all of them. Mr. Winn. Of course, it wouldn't pertain to commercial construction as much as it would to housing, but the housing, of course, will sit and it normally has a rule by FHA and VA where they have permanent inspections, of one year. Mr. ABERNETHY. Thank you very much, gentlemen. The Master Builders Association, Mr. Menocal.

STATEMENT OF M. J. MENOCAL, CHAIRMAN, LAW AND LEGISLATION COMMITTEE, ACCOMPANIED BY ALEXANDER J. CZERNOWSKI, SECRETARY-TREASURER, THE MASTER BUILDERS' ASSOCIATION, INC. Ir. MENOCAL. We have a statement which Mr. Clark has copies of. I am M. J. Menocal. I will leave it to you whether you want me to read this statement or merely insert it in the record.

Mr. ABERNETHY. I will leave it to you.
Mr. MENOCAL. All right. It is not too long.

The Masters Builders' Association, Inc., D.C. Chapter of Associated General Contractors of America, wishes to go on record in support of Bills H.R. 6527, H.R. 6678, and H.R. 11544 and requests this statement be read into the hearing record.

The Master Builders' was chartered in 1929 and is comprised of 43 General Contractors who perform 80 percent of the commercial construction in the Metropolitan Washington area.

My name is M. J. Menocal, President of the Corning Construction Corporation and Chairman of the Law and Legislation Committee of the Master Builders' Association, Inc.

We feel that the current law is vague and does not properly cover situations which may arise in connection with actions resulting from death or injury caused by improvements to property in the District of Columbia.

H.R. 6527, H.R. 6678 and H.R. 11544, in our opinion, corrects the situation without in any way being unfair to the general public and, further, offers a degree of protection for the design and architectural profession as well as contractors.

The injured party is protected against defects in construction and design which may have been committed by the contractor or the engineers or architects. During the period of limitations set forth in H.R. 6527, H.R. 6678 and H.R. 11544, their remedy would be against the architect, engineer, contractor or owner, and after such period, during which the improvement is tested in use, the injured party would still have a remedy against the owner, who must necessarily accept more responsibility as the age of the building goes up.

The physical problem for the contractor of preserving adequate records such as contract drawings, specifications, correspondence and Government payrolls within a few years becomes impossible.

The ability of the contractor to defend himself against suit disappears within a few years due to the above, changes in personnel, ownership, and similar causes.

I should have mentioned this. Mr. Czernowski, who is our Executive Secretary, is here with me. We will be happy to answer any questions that we can from the contractors' standpoint.

I would like to make it clear, Mr. Abernethy, that the fact that I am Chairman of the Law and Legislation Committee means nothing as far as my knowledge of law is concerned. I am not a lawyer.

Mr. ABERNETHY. There are a lot of us who have never acquired a complete knowledge of it, I will tell you that. The law is changed every few weeks across the street in Judge Warren's courthouse.

Mr. Winn?

Mr. Winn. I do not have questions. I would like to discuss the reference in your statement to the physical problem for the contractor of preserving adequate records, and so on. You are saving the records for five years now for Uncle Sam anyway, are you not? Don't you keep your records?

Mr. MENOCAL. Yes.

Mr. Winn. The plans and specifications are also kept for a long period of time?

Mr. MENOCAL. Yes.
Mr. WINN. Then I misunderstand you.

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