We negotiated a $6 million AIA Document A141–2014, Agreement Between Owner and Design-Builder, for our client, an innovative modular construction company, engaged in a 24-unit residential project involving the design and construction of 12 two-unit residential buildings, delivered and assembled on-site, often in a single day, in four phases. Recognizing the unique nature of off-site construction, where substantial material and labor investments precede on-site work, we drafted innovative provisions to safeguard our client, including non-refundable procurement-funding payments for each phase, totaling 30% of each phase’s cost, due 30 days after our client signals readiness to begin design, procurement, and fabrication of the modular housing units, ensuring compensation for upfront costs irrespective of potential project delays or complications. The agreement granted the owner a security interest in procured materials while preserving our client’s title until delivery and on-site assembly, balancing both parties’ needs, promoting timely project execution while mitigating financial risks inherent in modular construction, combined with clearly defined responsibilities for site conditions and pre-construction work.
