As featured on Builder Bites
Ontario's Association of Architects (the "OAA") has introduced a new standard form agreement for architect's services that they have instructed their members and clients to use going forward. The OAA600-2021 was released in November, 2022 and replaces the OAA600-2013, which had last been updated in 2019 to incorporate the new prompt payment provisions of the Construction Act (Ontario). This new OAA600-2021 contract is different from its predecessor in both format and substance.
The new format of the OAA600-2021 contract is much easier to navigate and allows for a single document to encompass all legal terms. You will immediately notice that there are significant more articles in the contract that allow for many of the business terms to be inserted directly, which also makes it easier to find these business terms in the future. The schedules are now referenced in the contract that include separate schedules for fees for: basic services, additional services and other services that are consistent with the Royal Architectural Institute of Canada Fee Guide. Also, there is a schedule for the supplementary conditions, thus allowing for all legal terms to be conveniently included in one document.
It should be noted that the new format includes pre-populated text boxes that provide suggested wording. It is likely that the parties will negotiate away from these standard terms, thus it is helpful that the new format allows for such changes to these pre-populated text boxes. As the rest of the document is in PDF format, any changes to those legal terms will have to be included as supplemental conditions.
The new OAA600-2021 contract also differs in substance from the previous contract as the new agreement includes new clauses and new concepts. Below are some of the examples of the new provisions included in the new standard contract:
- language for Ready-for-Takeover, which aligns with changes made to the CCDC2-2020 contract – this concept is also expected to be incorporated in other future CCDC standard contracts;
- requirements for what is to be included in a Proper Invoice, thus allowing the parties to stipulate what is needed to verify completion of work and process payments;
- allowance for phased release of statutory holdback amounts;
- a Force Majeure provision to enable parties to contractually agree on what happens in situations such as those arising out of the COVID-19 pandemic;
- identification of the maximum variation allowed between the cost estimate and compliant bid/negotiated contract price;
- key personnel language that ensures that the client has some control on who will be working on their project;
- insurance requirements language and fillable spots for amounts that can be negotiated by the parties and inserted directly into the articles of the contract;
- a requirement that architects remove liens placed by their sub-consultants;
- although the architect retains all copyright to the Instruments of Services, there is new language that grant clients exclusive, royalty-free and perpetual licences to use the Instruments of Services, as needed for certain future work (e.g. repairs, maintenance, etc.) on their projects; and
- a limitation period of six years from the completion of the services to provide notice for a claim.
It is interesting to note that many of new provisions included in the new OAA600-2021 contract are those that public and private clients had generally included in their supplemental conditions. Including these terms in the standard contract will make supplemental conditions much shorter and should also reduce costs for all sides in negotiating contract terms. At the same time, it is likely that this contract will be further negotiated by the parties, the results of which will be included as supplemental conditions.
The existing OAA600-2013 document is still available on the OAA Website, but the OAA has stated that they intend to remove them in the near future, at which time they will rescind any permission to use the contract. Therefore, architects and clients have a short time to familiarize themselves to the OAA600-2021 contract and update their supplemental conditions before the transition period ends.
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