Chapter 26
We suggest that the instructor go over the Table of Contents to Chapter 26. It
reveals the complexity of this topic and what lies ahead. Most importantly, the
students should see the difference between private systems (mediation and
arbitration) and public systems (litigation and minitrials), those which aid the
parties to settle (mediation), those that resolve the dispute (arbitration and
litigation), those that involve private projects as opposed to public projects (state
and federal) and domestic and international processes.
This complexity might lead some instructors to omit this chapter. We believe
this would be a mistake. A student intending a future in the construction industry
should have at least a passing understanding of disputes resolution, including an
understanding of the applicable terminology.
Spend some class time parsing AIA Document B1012007, Art. 8 and A201
2007, Art. 15 for a general background for Chapter 26. There has been much
criticism of the complexity of those provisions. How would the student improve
this process?
A common feature of dispute resolution in the construction industry is for the
design professional to provide an initial assessment of a claim, whether from the
contractor or owner. The contractor is concerned that the a/e will not be objective
if its complaint implicates the design. One solution (chosen by the AIA) is to
create a new position: the IDM. (Section 26.5 notes this “solution” engenders its
If deemed too “legal” for the students, Sections 26.6 to 26.8 can be skipped.
That said, students should be able to relate to the facts of AT & T Mobility LLC v.
Concepcion in Section 26.7. Are students aware that a credit card agreement or
a cable service contract includes an arbitration provision? Would the student trust
such a dispute resolution mechanism?
With Section 26.9, the text returns to the nuts and bolts of the process. Again,
we believe a basic understanding is advisable for the student. For engineering
(and architectural) students do not skip Section 26.12, dealing with joinder and
consolidation. Would the student prefer any dispute with the owner be arbitrated
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We would not spend much time on public contracts or international contracts
(Sections 26.16 and 26.17) unless the students plan to do international
engineering work.
Answers to Chapter Questions
1. What are some of the reasons that most American construction contracts,
both public and private, give the design professional broad decision making
powers?
2. What are the three reasons for elemental fairness?
3. Who has the right to appeal an initial decision? What will happen if a party
fails to make a timely appeal of an initial decision?
4. What are some negative issues with the creation of the Initial Decision Maker
(IDM) in the AIA A2012007 document?
5. What are the reasons that an arbitration award may be vacated (set aside)
according to the Uniform Arbitration Act?
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jurisdiction, procedural misconduct, or lack of a valid agreement to
arbitrate.
6. How could an economically more powerful party use arbitration to exert
undue influence over the disputes process?
7. What are the two components of unconscionability analysis and how does
each function?
8. After unconscionability, what are the main attacks on the validity of an
arbitration provision in a construction contract?
9. What two factors are relevant in deciding whether the right to arbitrate has
been waived?
10. What are alternative dispute resolution methods to arbitration?