AIA A201 General Conditions of the Contract for Construction § 18.104.22.168 - Initial Decision Maker
I have a question about § 22.214.171.124 in A201 contract. It states
"§ 126.96.36.199 Either party may, within 30 days from the date of receipt of an initial decision, demand in writing that the other party file for mediation. If such a demand is made and the party receiving the demand fails to file for mediation within 30 days after receipt thereof, then both parties waive their rights to mediate or pursue binding dispute resolution proceedings with respect to the initial decision."
Let's imagine the situation during construction. The Owner orders Contractor to make change to Work. Contractor saying that such change will cause change to Contract Sum. Owner disagrees and states the change is minor, within the scope of original Work, and won't adjust Time or Contract Sum. So they go to the Initial Decision Maker, who agrees with the Owner and tells the Contractor that the change is minor and will not cause the change of Contract Time or Contract Sum. So contractor is still dissatisfied and believes that this decision is unfair. Now to move into mediation according to § 188.8.131.52 he has to ask the Owner to file for mediation. The Owner says he is satisfied with the conclusion of the Initial Decision Maker and failing to file mediation. § 184.108.40.206 stating that in such case "If ... party receiving the demand fails to file for mediation... then both parties waive their rights to mediate or pursue binding dispute resolution proceedings..." So the Contractor is still dissatisfied with the decision, but since Owner didn't file for mediation the Contractor waive his rights to mediate or pursue binding dispute resolution.
Am I misreading article § 220.127.116.11? Or it is true that unless both parties are dissatisfied with the decision of the Initial Decision Maker, then the decision is final.
Please help me to understand that article. It seems pretty off from the whole fair play established in A201.
Hi Kirill -
To understand this clause, it's important to consider it in conjunction with 15.2.6, which states that either party may file for mediation of an initial decision at any time.
Given the open-endedness of the above, 18.104.22.168 exists so that parties can gain closure on a situation that was resolved via initial decision. To continue your example - the owner, satisfied with the initial decision, would send a letter to the contractor stating that if they disagree, they should file for mediation within 60 days per 22.214.171.124. Then, if the contractor does not file for mediation, the matter is officially closed.
If this clause didn't exist, the owner would have to worry that the contractor may file for mediation at any time, and the owner would never have a sense of closure with respect to the dispute.
Chris Hopstock RA
Oh, thanks Christopher Hopstock
I got it now. "... mediation of initial decision at any time..." means that either party can dispute the decision made on Claim by Initial Decision Maker bringing it to the next level of dispute resolution i.e. Mediation.
If the winning party is confident that the decision made by Initial Decision Maker in his favor was fair and will stand the resolution through Mediation he would send the losing party a demand per § 126.96.36.199 saying. "If you are dissatisfied with the decision we can keep arguing in Mediation". But if the winning party will not send such a demand the losing party can pursue Mediation later "...at any time...". So if the decision by Initial Decision Maker was iffy and not convincing, if the winning party won the dispute not due to concrete arguments but due to conflict of interest or pure luck, then not sending the losing party a demand to move forward to Mediation will keep the final resolution pending.
That phrase "Either party may, demand ... the other party file for mediation..." got me confused. If the winning party won't demand such a thing per § 188.8.131.52 it might bite them later 🐱🐉. Hence there is an incentive to forward such demand to the losing party. It is a kind of "Are we good?" resolution.
Now I understand the infinite wisdom of AIA lawers.🧐
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