LARE Section 1 Study Guide – Glossary of Terms

By on January 10, 2014.

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ACCELERATION COST – cost incurred by a contractor when the project is interfered with by the owner, in such a way, that the contractor must employ more manpower or work more hours in order to complete the project on time. If the contractor contributes to the cause of its own delays, acceleration cost may not be granted.

ACCEPTANCE – act of a person to whom a thing is offered by another whereby he receives the thing with the intention of retaining it, such intention being evidenced by a sufficient act. (See CONTRACT)

ACTIVE INTERFERENCE – action by a party to a contract that causes the other party of the contract to not complete the work of the project on time or in the manner established by the contract writing. Positive action must be per-formed on the part of the interfering party as opposed to passive negligence, which is inactive, permissive, or sub-missive.

ACTUAL DAMAGES – (ACTUAL LOSS) – damages resulting from real and substantial loss, as opposed to those which are merely theoretical, estimated, or anticipated. Actual damages represent the real and true value of the total loss suffered, as opposed to liquidated damages, which represent an estimated amount calculated as anticipated loss at a future time.

ADDENDA – modifications to the contract documents issued during the bid period. Addenda become official parts of the contract documents and are legally binding to the signatories of the contract.

ADVERSARY – parties to a contract are in an adversary or arms-length relationship to one another as a result of the commitment they have made to each other in the con-tract terms and conditions. This relationship is recognized by the courts and binds the two parties together in that relationship. In layman’s language, it can be considered a relationship of mistrust.

AGENT – a person authorized by another to act for him or her; one who is employed to represent another in business and legal dealings with third persons. In a typical agency rela- tionship, three parties are involved: a principal, an agent, and a third party. The agent represents the principal in dealing with the third party or parties. In the construction industry, a typical misunderstanding is that the Landscape Architect is the agent to the owner in dealing with the third-party con-tractor. The Landscape Architect, in a typical contract, is the represen- tative of the owner and not of the agent. In some contracts, the construction manager is an agent of the owner. An agency relationship is established in writing (express agency) with all three parties acknowledging the relationship. An agency relationship may also be established by acts and/or omissions of the parties (implied or apparent agency) which will bind the parties legally in the same manner as an expressed agency relationship.

ALLOWANCE – a sum of money set aside by the owner to remove a particular portion of work from competitive bid-ding. This is typical of government-subsidized institutions with work that must be competitively bid and with projects in which certain portions of the work are proprietary and, therefore, must be removed from competitive bidding.

ALTERNATE – a material or method used in place of the base material or method specified for the project. In a typical construction contract, the owner chooses the alternate or remains with

the base requirement, giving it control over the total cost of the project. An alternate differs from an option in that cost is a factor in the selection of an alternate by the owner, whereas an option does not have cost as a factor and the choice is made by the contractor. (See OPTION)

AMBIGUITY – doubtfulness; doubtfulness of meaning, duplicity, indistinctness, or uncertainty of meaning of an expression used in a written instrument. The courts, interpreting a writing, will permit parol evidence to clarify the writing if the writing is in fact ambiguous. However, the courts will not permit parol evidence if the writing is clear, even though it may be in error. (See PAROL EVIDENCE)

ANTICIPATORY BREACH – (ANTICIPATORY REPUDIATION) – established when a contractor makes a positive and unequivocal statement that it will not or cannot substantially perform the contract or when a contractor, by any voluntary affirmative act, renders substantial performance of its contract apparently impossible. Based on these two conditions, the owner may terminate the contract immediately or upon completion of a waiting period to determine the contractor’s performance according to the contract writing. In either case, the owner must establish that the con-tractor’s statement is positive and unequivocal. If the owner terminates the contractor for default after a statement which is ambiguous, the owner will be held to have wrongfully defaulted the contractor.

ANTITRUST LAWS – federal and state statutes to protect trade and commerce from unlawful restraints and monopolies. In the construction industry, bid rigging is considered a violation of antitrust laws. Those found guilty of bid rigging are assessed treble damages. (See BID RIGGING)

APPARENT AGENCY – an agency relationship created by an act of the parties and deduced from proof of other facts. (See AGENCY)

ARBITRATION – the submission of a dispute to a third party (individual or panel), known as arbitrator(s), whose judgment is final and binding. Decisions at arbitration hearings, unlike those in judicial cases, do not establish precedents.

ARBITRATOR – one who resolves disputes between two par-ties. In a typical construction contract, the Landscape Architect is designated as an arbitrator in resolving the disputes between the owner and the contractor. Unlike formal arbitration (as established by the American Arbitration Association), an Landscape Architect acting as arbitrator in the construction process is the first level for resolving disputes, and its decision is not final and binding.

LANDSCAPE ARCHITECT – the person or organization hired by the owner to design the project. The Landscape Architect’s duties consist primarily of the production of the plans and specifications from which the building will be constructed. The Landscape Architect may also preside at the bid opening, monitor the construction process to assure that the owner’s interests are protected, and approve payments to the contractor. Its relationship to the owner is that of
an independent contractor. All Landscape Architects must be licensed by the states in which they practice. In addition to the contract with the owner, the Landscape Architect also will enter into contracts with consultants (structural, mechanical, electrical engineers,etc.) but will not execute a contract with the contractor.

ASSIGNMENT – a legal action which allows a person who is not party to a contract to obtain

the contract rights of a party who is. A contractor, for example, may assign the rights contained in its contract with the owner to a subcontractor. In a similar manner, the Landscape Architect can assign portions of the design of the project to its consulting engineers, primarily in the areas of structural, mechanical, and electrical design.

ATTACHMENT – the act or process of taking, apprehending, or seizing person or property by virtue of a writ, summons, or other judicial order and bringing the same into the custody of the law; a remedy ancillary to an action by which the plaintiff is enabled to acquire a lien upon the property or effects of the defendant for satisfaction of judgment which the plaintiff may have obtained. (See LIEN)

BETTERMENT – an improvement brought upon an estate (land and/or buildings) which enhances its value more that mere repairs. The improvement may either be temporary or permanent. This term also applies to denote the additional value which an estate acquires in consequence of some public improvement, such as the widening of a street, etc.

BID – an offer to perform a contract for work and labor or for supplying materials at a specified price. In the construction industry, a bid is considered an offer by the contractor to the owner. A bid, as an offer, becomes a contract once the owner accepts the bidder’s offer with all other contractual requirements in order. (See CONTRACT)

BID DEPOSITORY – a clearing house for subcontractors to submit their bids for a particular project and for prime con-tractors to receive bids from the various subcontractors. In California, a bid depository was found in violation of antitrust laws based on its rules for membership imposing fine, suspension, or expulsion to members not abiding by the rules.

BID REJECTION – the act of not allowing a bid to stand because of an impropriety in the process of submission or as a result of the owner’s arbitrary decision to reject the bid. The owner, in a typical contract, reserves the right to reject any and all bids. However, in rejecting a bid, an owner and its Landscape Architect run the risk of interfering with the bidder’s right to do work or of defamation of character on the part of the bidder.

BOARD OF CONTRACT APPEALS – an independent administration quasi-judicial board to decide all public con-tract disputes. Various states have created these boards to relieve the courts from the backlog of cases related to public contracts. Note that these boards hear only disputes related to public contracts and not to private contracts.

BOILER PLATE – a term used to represent standard legal conditions inserted at the “front end” of a construction contract. These conditions are typically titled “General Conditions,” “Supplemental Conditions,” and/or “Special Conditions” and are inserted at the front end of the project manual.

BOND – an instrument with a clause, with a sum fined as a penalty, binding the parties to pay the same, and with the condition that the payment of the penalty may be avoided by the performance of certain acts by some, one, or more of the parties; a certificate or evidence of a debt; a mere promise to perform or pay; a written obligation. In the construction industry, there are several types of bonds, including bid bonds, performance bonds, and payment bonds. A bid bond is a form of security to insure that the bidder will enter into the contract if the award is made to it. A performance bond insures completion of the project by the con-tractor, guaranteeing that if the contractor defaults, the bonding company will step in and finish the

work. A performance bond also is applicable between a prime contractor and its subcontractor, assuring the prime that the subcontractor will perform or pay. A payment bond (sometimes known as a labor and material payment bond) provides a source of payment for the contractors’ or subcontractors’ labor and materialmen.


BUILDER – one whose occupation is the building or erection of structures, the controlling and directing of construction, or the remodeling and adapting to particular uses of buildings and other structures. The term “builder” is sometimes used interchangeably with the word “contractor.” (See CONTRACTOR)

BUILDING CODE – there are several model codes, including Southern Standard Building Code (SSDSC), Uniform Building Code (UBC), Building Officials and Code Administrators (BOCA), the National Building Code (NBC), and the International Building Code (IBC) one of which is
enacted in most jurisdictions. A code is not applicable in a certain jurisdiction or locality until it is enacted (legislated) into local law.

CAPACITY – the attribute of persons which enables them to perform civil or juristic acts;
necessary for parties entering into a contract. (See CONTRACT)

CASE LAW – the aggregate of reported cases forming a body of jurisprudence or the law of a particular subject as evidenced or formed by the adjudged cases; distinct from statutes and other sources of written law.

CAVEAT – a caution; literally, “let him beware.”

CERTIFICATE – a written assurance, or official representation, that some act has or has not been done, that some event occurred, or that some legal formality is being complied with; a written and signed document establishing that a fact is true.

CERTIFICATE OF OCCUPANCY – a document issued by the building inspector certifying that the structure con-forms to all relevant code sections and is, therefore, safe for use. An owner must obtain a certificate of occupancy before he or she can use a building. A new building cannot be considered complete until a certificate of occupancy has been issued. In some instances, a partial certificate of occupancy will be issued for portions of the building to be occupied.

CERTIFICATE OF PAYMENT – a document issued by the Landscape Architect in which the Landscape Architect certifies that the contractor has adequately performed. The certificate is then presented to the owner for payment to the contractor.

CERTIFICATE OF SUBSTANTIAL COMPLETION – the document issued by the Landscape Architect when the building, or a portion thereof, is complete to the degree that the owner can use the building, or a portion thereof, for its intended purpose. (See SUBSTANTIAL COMPLETION)

CHANGE – a revision to the original contract documents. A change differs from a modification in that the modification is agreed to by both parties of the contract; however, a change may be made unilaterally by the owner in spite of the contractor’s lack of agreement.

CHANGE ORDER – a document issued by the Landscape Architect directing the contractor to erect some portion of the building in a manner different than described in the original plans and specifications. This change must have an effect on the price and/or time of the contract in order to constitute a change order. If the price and/or time is not affected, then the change is a field order or minor change order and not a change order. The change may be requested by the Landscape Architect, owner, or contractor.

CLAIM – a demand, an assertion, a pretense, a right or title to. An action initiated by one of the parties of a contract against the other party. This action may be in the form of a written letter, a legal document, or some instrument establishing the difference between the two parties. (NOTE: A letter is sufficient, in the eyes of some courts, to establish a claim.)

IMMUNITY – legal status granted to a Landscape Architect in the quasi-judicial role as arbitrator in settling a dispute between the owner and the contractor. This cloak protects the Landscape Architect from liability by either party (owner or con-tractor) as a result of the decision rendered in resolving the dispute. (See IMMUNITY)

COLLUSION – an agreement between two or more persons to defraud a person of his or her right by the forms of law or to obtain an object forbidden by law; a secret combination, conspiracy, or concert of action between two or more per-sons for fraudulent or deceitful purposes.

COMPETITIVE BIDDING – a process whereby sealed proposals are submitted to the owner for consideration. Competitive bidding is mandatory on public works projects. A private owner may choose to use competitive bidding in securing the most economical contractor for the construc- tion of the project. However, a private owner is not legally bound to the competitive bidding process.

CONSIDERATION – the inducement to a contract; the cause, motive, price, or impelling influence which induces a contracting party to enter into a contract; the reason or material cause of a contract. (See CONTRACT)

CONSTITUTION – the written instrument agreed upon by the people of the United States, or of
a particular state, as the absolute rule of action and decisions for all departments and officers of the government in respect to all the points covered by it. This instrument must control until it is changed by the authorities which established it. Any act or ordinance of any government department or office opposed to it is null and void. Several states have enacted statutes which have affected the construction industry and have been found unconstitutional or null and void in their application. One such statute is the statute of limitations which is applied for the protection of the owner and Landscape Architect but not for the contractor.

CONSTRUCTION MANAGEMENT – a process of profession-al management applied to a construction program from conception to completion for the purpose of controlling time, cost, and quality. Ideally, the construction management organization links itself to the owner as an agent and thereby places itself in a fiduciary relationship with the owner. In this relationship, the construction manager can properly represent the owner to both the design profession-al and
the contractors without concern regarding conflict of interest on his part.

CONSTRUCTIVE – that which has the character assigned to it in its own essential nature but acquires such character as a consequence of the way in which it is regarded by a rule or policy

of law; hence, inferred, implied, or made out by legal interpretation. The term “constructive” typically is used with other legal terms such as “acceleration,” indicating that in the absence of an acceleration clause, it is the actions of party that determine the validity of acceleration costs. Another application is in the use of the term “constructive change,” indicating that although a change may not have been directed, it is implied by the act or omission of the parties involved. (See ACCELERATION and CHANGE)

CONTINUOUS TREATMENT – an uninterrupted, unbroken series of activities or events. This theory is sometimes employed in the determination of statute of limitation claims regarding the commencement of the time for the claim. The statute of limitation typically starts to run upon completion of the project. However, if the contractor is required to repair defects in the work
and, as a result, renders “continuous treatment” to the work, the contractor may extend the time for commencement of the statute.

CONTRACT – a promissory agreement between two or more persons that creates, modifies, or destroys a legal relation-ship. Several essential elements must be present in order to render a contract valid. These elements include an offer, acceptance, and consideration on the part of both parties, the capacity of both parties to contract, a state of mind (mutuality of assent), and the “meeting of minds.” In the construction industry, especially in public bidding, the bid proposal is considered an offer and the owner’s selection of the bid is the acceptance. Consideration is the giving up of something on the part of both parties (the owner gives money while the contractor gives labor, material, etc., in the construction process). The capacity of
both parties rep-resents their legal standing in relation to one another, namely as legally recognized principals of the organizations entering into the contract. The state of mind (mutuality of assent) of the individuals must be such that they are free to enter into the contract or not to enter into the contract. If coercion is present, then the contract could be rendered null and void. The meeting of the minds represents that which was intended by both parties at the time of the signing of the contract and that both parties were in harmony with each other’s intentions. (See BID)

CONTRACTOR – anyone who contracts to provide the labor and services necessary to complete a project. A contractor may be hired by the owner or by another contractor. When the contractor is hired directly by the owner, the contractor is classified as a prime contractor. When a contractor is hired by another contractor, the contractor is classified as a subcontractor in relation to the project. (See SUBCONTRACTOR)

CONTRACTUAL DUTY – (CONTRACTUAL OBLIGATION) – the obligation which arises from a contract or agreement. In a typical contract agreement, the parties are required to fulfill the duties enumerated in the contract writing between the two parties, but also from the contract agreed to by other parties. An example of this is the duty owed by the Landscape Architect to the contractor as a result of the requirements called out in the contract between the owner and the contractor.

CONTRIBUTION – the sharing of a loss or payment among several debtors. The act of any one or several of a number of co-debtors in reimbursing one of their number which has paid the whole debt or suffered the whole liability, each to the extent of its proportionate share; The right of one who has discharged a common liability to recover from another, who is also liable, the portion which he or she ought to pay or bear. In many jurisdictions, the damages will be assessed to the parties held liable based on their contribution to the negligence.

CUSTOM – a usage or practice of the people which, by common adoption and acquiescence and by long and unvarying habit, has become compulsory and has acquired the force of a law with respect to the place or subject matter to which it relates. On the technical side of the construction industry, this term can apply to techniques and methods of construction, such as the finishing of a concrete slab with a trowel. Administratively, it is the custom of an Landscape Architect to monitor the construction phase of the work, unless the writing contains a clause deleting that requirement.

DAMAGES – compensation for a loss or injury suffered; compensation which may be recovered in the courts by any person who has suffered loss, detriment, or injury, whether to his or her person, property, or rights, through the unlawful act, omission, or negligence of another. In the courts there are many divisions pertaining to damages which can-not be covered here.

DAMAGES, ACTUAL – real, substantial, and just damages, or the amount awarded to a complainant in compensation for actual and real loss or injury, as opposed to “nominal” or “punitive” damages.

DAMAGES, COMPENSATORY – repair or replacement of the loss caused by the wrong or injury and nothing more.

DAMAGES, CONSEQUENTIAL – such damage, loss, or injury which does not flow directly from the act of the party but only from some of the consequences or results of such act.

DAMAGES, DELAY – the economic loss suffered as a result of extended time from that of the original time stipulated in the contract writing. This differs from property damage and personal damage.

DAMAGES, LIQUIDATED – a specific sum of money expressly stipulated by the parties to a bond or contract as the amount of damages to be recovered by either party for a breach of the agreement by the other. In the construction industry, it is an amount established in the contract writing to be withheld by the owner on a daily basis for every day past the stipulated completion date of the contract. A “liquidated damages” clause is to fix the amount to be paid in lieu of performance. “Penalty” clauses, without some kind of balancing bonus, are rendered unenforceable in the courts of law.

DAMAGES, PUNITIVE – awarded by the courts in the amount of three times the actual damage. Treble damages usually apply in antitrust actions.

DEFAULT – an omission of that which ought to be done; a failure to perform a legal duty.

DEMURRER – an allegation of a defendant which, admitting the matters of fact alleged by the bill to be true, shows that they are insufficient for the plaintiff to proceed upon or to oblige the defendant to answer.

DESIGN-BUILD – a method of organizing a building project in which a single entity undertakes the design and erection of the structure at a set fee negotiated in advance. Unlike the conventional construction contract whereby an owner hires both an Landscape Architect and a contractor separately, in the design-build contract, the owner negotiates only one con-tract with one organization.

DEVIATION – a change made in the progress of a work from the original terms, design, or method agreed upon.

“DIFFERING SITE CONDITIONS” CLAUSE – (“CHANGED CONDITIONS” CLAUSE) – typically provides that in the event that the physical conditions at the site of the work vary materially from those represented or reason-able anticipated and in a manner which increases the time or cost of performance, the contractor is entitled to additional compensation or an extension of time.

DISCLAIMER – the disavowal, denial, or renunciation of an interest, right, or property imputed to a person or alleged to be his; also the declaration, or the instrument, by which such disclaimer is published.

DISCLOSURE – to bring into view by uncovering, to lay bare, to reveal, to free from secrecy or ignorance, or to make known; revelation; the impartation of that which is secret; that which is disclosed or revealed.

DISCOVERY – the ascertainment of that which was previously unknown, the disclosure or coming to light of what was previously hidden, the acquisition of notice or knowledge of given acts or facts as in regard to the discovery of fraud affecting the running of the statute of limitations, or the granting of a new trial for newly discovered evidence; disclosure of facts resting in the knowledge of the defendant or of deeds, writings, or other things in his custody or power.

DOCUMENT, DOCUMENTATION – instruments which record, by means of letters, figures, or marks, matter which may be evidentially used; the deeds, agreement, title papers, letters, receipts, and other written instruments used to prove the facts.

ECONOMIC LOSS – additional cost incurred by an individual other than property damage or personal injury. In the construction industry, an economic loss may be represented by a loss in profits or a loss due to a delay in the contractor’s schedule. (See DELAY DAMAGES)

ENGINEER – a person with a particular expertise in a limited area of building design. An engineer typically may specialize in structural, mechanical, electrical, or plumbing design. It is the limitation of this specialty, which distinguishes an engineer from the Landscape Architect, who has general responsibility for the entire project. Engineers ordinarily are hired as consultants to assist the Landscape Architect. The con-tract between the Landscape Architect and the engineer usually reflects the same terms and conditions that exist in the contract between the owner and the Landscape Architect. In some instances, such as an industrial project, the roles are reversed in that the owner hires the engineer as the prime designer, and the engineer, in turn, hires the Landscape Architect as a consultant for the building enclosure.

EQUITABLE DOCTRINE – just and conformable to the principles of justice and right; existing in equity; available or sustainable only in equity or only upon the rules and principles of equity. (See EQUITY, COURT OF)

EQUITY, COURT OF – court which administers justice according to the system of equity and according to a peculiar course of procedure or practice. Equity denotes the spirit and habit of fairness, justness, and right dealing which should regulate the interaction of men. Its obligation is ethical rather than jural. It is grounded in the precepts of the conscience, not in any sanction

of positive law. It is justice that is ascertained by natural reason or ethical insight independent of the formulated body of law.

ESTOPPEL, PROMISSORY – an equitable doctrine which holds the promisor bound to a promise if injustice can be avoided only by enforcement of the promise. A typical application of this doctrine in the construction industry is holding a subcontractor to its bid submitted to the prime contractor.

EXCLUSIVITY OF CONTRACT PROVISIONS – when a remedy for breech is included as a part of the contract, that remedy is considered exclusive of other remedies provided by law. Some courts do not recognize the exclusivity of a contract provision unless it is specifically stipulated that the remedy is exclusive. Courts typically will look at all of the facts and circumstances surrounding the agreement as a means of determining the intention of the parties and will
refuse to exclude other remedies unless such a result is required by a consideration of the facts of the particular agreement.

EXCULPATORY LANGUAGE – clause in which a party who may suffer a loss agrees not to institute legal action against the party who may cause the loss. The classic example is a patient who, upon entering the hospital, agrees not to institute any legal action against the hospital or any of the doctors in the event he suffers injury or death because of an act of the hospital or the doctors. In the jargon of the construction industry, indemnification clauses and disclaimer clauses are considered exculpatory language.

EXPERT WITNESS – may be a person of science, one educated in the arts, or a person possessing special or peculiar knowledge acquired from practical experience.

EXPRESSED WARRANTY – in contract and sales, a promise created by the apt and explicit statements of the seller or person to be bound. (See WARRANTY)

FAST TRACK METHOD – a way of organizing a design pro-gram which allows the contractor to begin construction on earlier phases of the project before the plans are completed for the entire project. Caution must be exercised in the signing of a contract using these fast-track methods because of the lack of information typically expressed in a conventional method of contract. Many changes may result when going from phase to phase, and provisions must be included in the contract to compensate the contractor for additional work.

FIDUCIARY – a person holding the position of a trustee or character analogous to that of a trustee in respect to the trust and confidence involved and the scrupulous good faith and
candor which are required. In the construction industry, the Landscape Architect and the owner are in a fiduciary relation-ship in respect to the contractor.

FIELD ENGINEER – an engineer assigned to a project during the construction phase and located at the project on a full-time basis.

FIELD ORDER – a document issued by the Landscape Architect directing the contractor to erect some portion of the building in a manner different from that described in the plans and specifications. A field order is issued when the modification will not affect the money and/or the time spent on the project. These factors distinguish a field order from a change order. The change may be requested by the Landscape Architect, owner, or contractor. (Field orders sometimes are known as minor change orders.) (See CHANGE ORDER)

FINALITY OF DECISION – a contract provision or the procedure of a legally recognized process which states that the decision rendered in the settlement of a dispute is final. Pursuant to such a provision, the courts will accord finality to that decision absent gross error for arbitrary and capricious action. In the arbitration process, the decision rendered by the arbitrators is
final. .

“FLOW-DOWN” CLAUSE – in a contract between a subcontractor and a prime contractor, the performance of the sub-contractor will be tied to the prime contractor in the same manner as the prime’s performance is tied to the owner. Some contracts between contractors and
subcontractors require more of the subcontractor than is required of the prime contractor by the owner. In a “flow-down” clause, the same requirements are established as a minimum require- ment for the subcontractor.

FOREIGN CORPORATION – an organization not incorporated in the state or jurisdiction in which it is performing work. A contractor must meet the legal requirements of the state in which it is performing work. These requirements may include incorporation and licensing as a construction contractor in that state.

FOUR-CORNER RULE – the face of a written instrument. That which is contained on the face of a deed, without any aid from the knowledge of the circumstances under which it is made, is said to be within its four corners. In the construction industry, the contract documents, including the drawings, specifications, general conditions, etc., form the face value of the contract.

FRAUD, FRAUDULENT – an intentional perversion of truth for the purpose of inducing another, in reliance upon it, to part with some valuable thing or to surrender a legal right; a false representation of a matter of fact, whether by words, by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and
is intended to deceive another so that he or she shall act upon it to his or her legal injury.

GENERAL CONDITIONS – those portions of the contract documents which define, set forth, or relate to contract terminology, the rights and responsibilities of the contracting parties and of others involved in the work, and similar pro-visions of a general non-technical nature. Conditions can be either expressed, which are stated in the contract, or implied, which are not set forth in words but arise out of the intentions of the parties to the contract.

GENERAL CONTRACTOR – the builder of the portion of the building which is considered the general portion or the Landscape Architectural portion. This terms sometimes is erroneously interchanged with the term “prime contractor.” (See PRIME CONTRACTOR)

GUARANTY – a collateral agreement for performance of another undertaking; a promise to answer for payment of debt or performance of an obligation if the liable person fails to make payment or perform the obligation.

“HOLD-HARMLESS” CLAUSE – this heading is inter-changeably used with the heading
“Indemnification Clause.” (See INDEMNIFICATION)

IMMUNITY – exemption from performing duties which the law generally requires others to perform. (See CLOAK OF IMMUNITY).

IMPLIED – where the intention is not manifested by an explicit and direct word but is gathered by implication or deduction from the circumstances.

IMPLIED AGENCY – an agency relationship created by acts of the parties and deduced from proof of other facts. (See AGENCY)

IMPLIED CONTRACTUAL PROVISIONS – provisions which do not appear in the written embodiment of the agreement, but which exist by implication. These primarily include the implied duties to cooperate and to disclose, the implied warranty of specification suitability, and the implied covenant of good faith and fair dealing. Recovery under these implied clauses may not be subject to the limitations on recovery under the expressed provisions of the contract.

IMPLIED WARRANTY – a promise established by implication or inference from the nature of the transaction or the situation or circumstances of the parties. (See WARRANTY)

IMPOSSIBILITY OF PERFORMANCE – a requirement of the contract which is physically impossible to perform with-in the existing state of the art. Three factors must exist to render a requirement impossible: (1) the impossibility must be inherent in the nature of the act to be performed rather than personal to the contract, (2) the facts which make the performance impossible must not have been foreseeable, and (3) the person seeking to be excused from performance must have been in no way responsible for the impossibility.

IMPRACTICABILITY, COMMERCIAL – the doctrine that recognizes that, in some instances, contract performance may become so costly that its impracticability makes it the equivalent of impossibility. (See IMPOSSIBILITY OF PERFORMANCE)

IMPUTED KNOWLEDGE – knowledge of a fact which is attributed vicariously to another. Knowledge is said to be imputed to a person when it is ascribed or charged to the person not because he or she is personally cognizant of the fact or responsible for it, but because another person, over whom the first person has control or for whose acts or knowledge he or she is responsible, is cognizant of it or responsible for it. In an agency relationship, the principal has knowledge imputed to him or her when the agent receives or is made cognizant of that knowledge. (See AGENCY)

INCORPORATED PAPERS – where the signatories execute a contract which refers to another instrument in such a manner as to establish that they intended to make the terms and conditions of that other instrument a part of their understanding. The two instruments may be interpreted together as the agreement of the parties.

INDEMNIFICATION – the process by which one party seeks to protect itself from any claims by a plaintiff who has been injured or who has suffered loss. One method of obtaining indemnification is to obtain a promise from the contractor that it will insure the owner, and in some cases the Landscape Architect, against any liens or suits by a third party not privy to the contract. The courts generally enforce contractual indemnification provisions; but, they are hesitant to permit a party to use indemnification when that party has played a major role in causing the loss. Indemnification is a contractual obligation by which one person or
organization agrees to secure another against loss or damage from specified liability.

INJUNCTION – a prohibitive writ issued by a court of equity to a party defendant, forbidding the latter to do some act or to permit its servants or agent to do some act which it is threatening or

attempting to commit, or restraining it in the continuance thereof, such as being unjust, inequitable, or injurious to the plaintiff. In the application of the equitable doctrine of promissory estoppel, one can only stop the subcontractor from withdrawing its bid. This is an injunctive procedure preventing the subcontractor from performing an act, but it cannot assess damages against the subcontractor.

INSPECTION TEAM – the inspectors assigned to a project for the purpose of carrying out the quality control plan.

INSURANCE – a contract whereby, for a stipulated consideration, one party undertakes to compensate the other for loss on a specified subject by specifying perils. The party agreeing to make the compensation usually is called the insurer or underwriter; the other is the insured or assured; the agreed consideration is the premium; the written contract is the policy; the events insured against are risks or perils; and the subject, right, or interest to be protected is the insurable interest. Insurance is contract whereby one undertakes to indemnify another against loss, damage, or liability arising from an unknown or contingent event and is applicable only to some contingency or act to occur in the future.

INTERFERENCE – the act of hampering, hindering, disturbing, intervening, interposing, or taking part in the concerns and affairs of others. In the construction industry, when a contractor has work interrupted by the acts of the Landscape Architect or owner, it may file suit on the grounds of interference. However, before liability will be assessed, most courts require that interference with the contract be intentional and not merely negligent.

INVITATION TO BID – a solicitation for competitive bids; an invitation to submit offers on behalf of contractors, which are then subject to acceptance by the procuring agency or owner to form the basis of the contract. The invitation to bid competitively is not an offer on behalf of the procuring agency or owner to contract but is simply a request or solicitation for offers to contract.

JUDICIAL – belonging to the office of a judge, as in a judicial authority, a court of justice, a judicial writ, or a judicial determination.

JUDICIARY – pertaining or relating to the courts of justice, to the judicial department of government, or to the administration of justice; that branch of government invested with the judicial power; the system of courts in a country.

LATENT – hidden, concealed, dormant; does not appear upon the face of a thing, as in a latent ambiguity.

LIABILITY – bound or obliged in law or equity; responsible or answerable to make satisfaction, compensation, or restitution.

LICENSE – certificate or document which gives permission; a permission by a competent authority to do some act which, without such authorization, would be illegal or would be a trespass or a tort.

LIEN – a charge, security, or encumbrance upon property; a claim or charge on property for payment of some debt, obligation, or duty.

LIEN, MECHANIC’S – a claim created by law for the purpose of securing priority of payment of the price or value of the work performed and materials furnished in erecting or repairing a building or other structure and, as such, attached to the land as well as to buildings and improvements erected thereon. (See ATTACHMENT)

LIEN, PARTIAL WAIVER OF – in the construction industry, a document used to certify that a portion of the total amount due to a subcontractor has been paid and, there-fore, that that portion or amount of money cannot be used as a basis for a lien against the property.

LIEN, WAIVER – to deny the right expressed in the lien. In the construction industry, it is a certificate issued upon completion of the work, signifying that all monies have been paid and that the right to lien against the property is removed.

LIMITATIONS, STATUTE OF – a statute prescribing limitations to the right to bring on action based on certain pre-scribed causes of action; that is, declaring that no suit shall be maintained on such causes of action unless brought within a specified period after the right has accrued; a certain time allowed by a statute for litigation. The provisions of state constitution are not a
grant but are a limitation of legislative power.

MANDAMUS – a writ issued from a court of superior jurisdiction and directed to a private or municipal corporation, or any of its offices, or to an executive, administrator, or judicial officer, commanding the performance of a particular act therein specified and belonging to its public, official, or ministerial duty or directing the restoration of the complainant to rights or privileges of which he or she has been illegally deprived; a command from a higher court to a lower court to perform a particular act. In the construction industry, a writ is issued to the contracting officer conducting a bid opening session or the letting of contracts if the officer is not complying with the proper legal procedures. If a public body is withholding the execution of a contract, mandamus may be applied to compel that body to act. (See MANDATE)

MANDATE – a precept or order issued by superior court upon the decision of an appeal or writ of error which directs action to be taken or disposition to be made of case. In some state jurisdictions, the term “mandate” has been substituted for “mandamus” as the formal title of that writ. (See MANDAMUS)

MANDATORY CLAUSES – (MANDATORY PROVISIONS) – clauses which must appear in the contract writing due to their legal status as a federal, state, or local law. The amount of minority business participation or the licensing of a contractor or subcontractor are clauses which fall into this category in certain jurisdictions.

MATERIAL VARIANCE – a deviation from that which was specified in the original contract documents. In the bid process, a material variance from that which is required in the bid documents will be the basis for rejection of the bid. The degree of variance in a bid process is determined by whether the bidder’s proposal gives it an advantage or benefit not enjoyed by the other bidders. A mere irregularity in form which can be corrected upon the opening of the bid is not considered a material variance.

MEETING OF MINDS – the “meeting of minds” required to make a contract is not based on secret purposes or intentions on the part of one of the parties, which it has stored away and not brought to the attention of the other parties, but must be based on purpose and intention which has been made known or from which all of the circumstances should be known. (See


MERCHANTABILITY – the article sold will be of the general kind described and reasonably fit for the general purpose for which it shall have been sold. Where the article sold is ordinarily used in only one way, its fitness for use in that particular way is impliedly warranted unless there is evidence to the contrary.

MISREPRESENTATION – any manifestation by words or other conduct of one person to another that, under the circumstances, amounts to an assertion not in accordance with the
facts. A party may be guilty of misrepresentation if it has erred in giving professional opinions or in making representations as to existing facts or conditions which a third party has relied upon
in the performance of its work.

MUTUALITY OF ASSENT – compliance, approval of some-thing done, or a declaration of willingness to do something in compliance with a request; an acting by two parties to perform a duty toward each other. (See CONTRACT)

NEGLIGENCE – failure to exercise the degree of care which a reasonable and prudent party would exercise under the same circumstances. Negligence is committed when a contractual duty is breached. A good example of negligence is where an Landscape Architect failed to indicate in the plans the existence of an electric power line which he or she knew to be in the area of construction.

NO DAMAGE FOR DELAY – a clause contained in contracts which grants a party to the contract an extension of time but does not reimburse that party for any additional costs suffered during that time.

NULL AND VOID – naught, of no validity or effect. When used in a contract or statute, it often is construed as meaning voidable. A contract is rendered null and void when one of the essential elements that make up a contract is missing. An example of this is that when an organization is not licensed to perform work in a particular state, that organization does not have the capacity
to execute contracts in that state. Such a contract can then be rendered null and void because of its deficiency regarding the capacity of one of the parties.

NULLITY – nothing; an act or proceeding in a cause which the opposite party may treat as though it had not taken place or which has absolutely no legal force or effect.

OFFER – an act on the part of one party whereby it gives to another the legal power of creating the obligation called contract; a proposal to do a thing; an element of a contract. It must be made by the party which is to make the promise, and it must be made to the party to which the promise is made. It may be made either by word or by signs, either orally or in writing, and either personally or by a messenger; but, in whatever way it is made, it is not an offer in law until it comes to the knowledge of the party to which it is made. An offer must be so definite in its terms, or require such definite terms in acceptance, that the promises and performances to be rendered by each party are reasonably certain. (See CONTRACT)

OPTION – a choice; the power or liberty of choosing; some-thing that is or can be chosen. In the construction industry, an option is presented to the building contractor in the form of materials and/or methods which vary from the base requirements, which it may choose in order to meet other requirements of the contract. An example would be to choose a method which

would employ more minorities to meet the minority quota. An option has no effect on the cost to the owner. (See ALTERNATE)

O.S.H.A. (OCCUPATIONAL SAFETY AND HEALTH ACT) – a federal act creating an agency responsible for safety and health in the work place. The agency has the authority to issue citations to violators of the federal regulations imposed by the agency. There have been instances in the construction industry where O.S.H.A. has been used by the courts to establish a standard of care for the participants in the construction process.

OWNER – the party at the instance of which the project is undertaken and the one which will take title to it when it is completed; the party in which is vested the ownership, dominion, or title to property. On a construction project, the owner typically contracts independently with the Landscape Architect or engineer and with the contractor.

PAROL EVIDENCE – oral or verbal evidence; that which is given by word of mouth; the ordinary kind of evidence given by witnesses in court. In a particular sense, and with reference to contracts, deeds, wills, and other writings, parol evidence is the same as extraneous evidence or evidence taken from outside of the contract writing.

PAROL EVIDENCE RULE – under this rule, when parties put their agreement in writing, all previous oral agreements merge in the writing and a contract, as written, can-not be modified or changed by parol evidence in the absence of a plea of mistake or fraud in the preparation of the writing. But, this rule does not forbid a resort to parol evidence not inconsistent with the matters stated in the writing. In common layman’s terms, parol evidence or extrinsic evidence is not permitted to be used a part of the contract writing once the contract is executed. However, should the writing be ambiguous and in need of clarification, then the courts will permit parol evidence to be received concerning the contract writing. In the construction industry, only the contract is executed, the bid proposal cannot be entered as evidence contrary to the contract writing unless the con-tract writing is ambiguous and the bid proposal is needed for clarification of the ambiguity.

PATENT/LATENT TEST – determines whether the danger which caused the damage was latent (hidden) and, there-fore, beyond the control of the observer or patent (readily seen upon a reasonable inspection) and, therefore, within the control of the observer. Application of this test to the construction industry is enforced when the building is turned over to the owner. If the danger can be observed at the time of the acceptance of the building by the owner, but the owner does not make the contractor aware of the deficiency, then the owner will be held responsible for any future damage. However, if the danger is latent and not observable by the owner, then the contractor will be held responsible for any future damage emanating out of this danger.

PAYMENT BOND – a legal instrument which provides a source of payment for labor and materialmen should their employer fail to pay them because of either default or bankruptcy. (See BOND)

PERFORMANCE BOND – a legal instrument which assures that if the contractor defaults, the surety company will complete performance or pay damages to the extent of the bond. (See BOND)

PLAINTIFF – a person or organization which brings an action; the party which complains or

sues in a personal action and is so named on the record.

PRECEDENT – an adjudged case or decision of a court of justice considered as furnishing an example or authority for an identical or similar case arising afterward or for a similar question of law. It means that a principle of law actually presented to a court of authority for consideration and determination has, after due consideration, been declared to serve as a rule for future guidance in the same or analogous cases, but matters which merely lurk in the record and are not directly advanced or expressly decided are not precedent.

PRIME CONTRACTOR – the party signing a contract with another party to directly perform the work required by that contract. (See CONTRACTOR and SUBCONTRACTOR)

PRIVITY – relationship of a party which has any part or interest in any action, matter, or thing. Privity of contract is that relationship that exists between two or more contracting parties. In a typical construction project, the contractual relationship between the participants is one of privity between the owner and the design professional and the owner and the contractor. However, there is no privity or contract between the design professional and the contractor.

PRIVITY—(NO PRIVITY RULE) – in the 1800’s, many cases were settled when the plaintiff was denied access to the bench due to the no privity rule (no contract existed between the plaintiff and the defendant). However, in recent decades the no privity rule has given way to the notion of third-party liability. (See THIRD-PARTY LIABILITY)

PROJECT MANAGEMENT – a system of organizing a construction project from conception to the completion of the project. This system includes management of the preparation of the contract documents, the bid process, and the construction phase. This term sometimes is interchange-ably used with the term “construction management” (See CONSTRUCTION MANAGEMENT)


PROTEST – a formal declaration made by a party interested or concerned in some act about to be done, or already per-formed, whereby it expresses its dissent or disapproval or affirms the act against its will. The object of such a declaration generally is to save some right which would be lost to the party if its implied assent could be made out or to exonerate itself from some responsibility which would attach to it otherwise. In common jargon, a protest is considered the initial act in establishing a claim to retain a party’s contractual rights.

PUNITIVE DAMAGES – relating to punishment; having the character of punishment or penalty;
inflicting punishment or a penalty. (See DAMAGES)

QUALITY ASSURANCE – policy in regard to assuring that quality will be achieved on a program or project.

QUALITY ASSURANCE PLAN – a plan to implement the policies stated in the quality assurance statement of an organization.

QUALITY CONTROL – the implementation of the quality assurance plan, usually during the construction phase.

QUALITY CONTROL GROUP – the group of personnel assigned to implement quality control

during the construction phase.

QUALITY CONTROL PLAN – an implementation plan for application of the quality assurance policies during the construction phase.

QUASI-JUDICIAL – a term applied to the action, discretion, etc., of public administrative officers who are required to investigate facts, to draw conclusions from them as a basis for their official action, and to exercise discretion of a judicial nature. The actions of the O.S.H.A. administrators are quasi-judicial in character. When a design professional acts as an arbitrator in resolving disputes between the owner and the contractor, he or she is considered to be acting in a quasi- judicial role. It is in this role that the design professional is granted immunity. (See IMMUNITY)

RECOVERY – obtaining a thing by the judgment of a court as the result of an action brought for that purpose; the amount finally collected or the amount of judgment.

REDRESS – receiving satisfaction for any injury sustained.

REGULATION – a rule or order prescribed for management or government; a regulating principle; a precept; rules of order prescribed by a superior or competent authority relating to
the actions of those under its control. An example is the body of federal regulations instituted by O.S.H.A. These regulations must be adhered to by those in the work-place, including the construction project site, or citations will be issued for their violation upon detection.

REJECT ANY AND ALL BIDS – a provision of most invitations to bid for both public and private works. In addition, most jurisdictions grant, by statute or ordinance, that same apparent right to all of its political subdivisions. It is the right of the owner or contracting agency to reject any and all bids, generally for some reason. However, some jurisdictions grant outright authority to
reject all bids without cause or for any cause it might deem satisfactory. In some jurisdictions and with some government agencies, it must be shown that the rejection was not arbitrary and capricious. In other jurisdictions, the motive for rejection of all bids is immaterial. Yet, in other jurisdictions, there is the requirement that rejection of bids be predicated on good faith and be exercised promptly. Note that the above deals with the affirmative act of rejection of all bids and not with the disqualification of bidders due to material variance in their submission or with the rejection of one bid. In the rejection of a single bid (the lowest responsible and responsive bidder), other factors come into play. In some jurisdictions, the rejected bidder was awarded costs of its bidding process, while in others, though the cost of bid preparation was denied, the contractor was awarded damages to recover reasonable profits, start-up costs, and postbid costs.

RELEASE OF LIEN – the relinquishment, concession, or giving up of the right to a lien by the party in which it exists or to which it accrues. In the construction industry, it is a document releasing the signer’s (contractor and/or subcontractor) right to a mechanics’ lien on the project.

REPRESENTATIVE – one who stands in the place of another, usually as executor or administrator but not as an agent; one who represents the interests of another. (See AGENT)

RESPONSIBLE BIDDER – one who has the capability, in all respects, to fully perform the contract requirements and the integrity and reliability to assure good-faith performance.

RESPONSIVE BIDDER – one who has submitted a bid under a competitive sealed bid which

conformed in all respects to the invitation for bids so that all bidders may stand on equal footing with respect to method and timeliness of sub-mission and as to the substance of any resulting contract. One is responsive if one replies to the specific questions set forth. In the text of public works contracts, one must respond clearly and without qualification to all inquiries addressed to the invitation to bid.

RETAINAGE – an amount of money established by a fixed percentage agreed to in the contract writing that is with-held by one party of the contract from the other as a means of security
and/or assurance of performance. In the construction industry, retainage is withheld by the owner against the prime contractor, and the prime contractor, in a similar manner, withholds from its subs. A typical percent-age in the construction industry is 10 percent of the amount paid on the progress payments until 50 percent of the work is completed. At that time, the owner may discontinue withholding the retainage.

RISK-SHIFTING TECHNIQUES – typical risk-shifting clauses include indemnification clauses, surety requirements (bid bond, performance bond, and payment bond), “no damage for delay” clauses, etc. Another similar clause is the “condition precedent to payment” clause, which requires the prime contractor to pay his subcontractor only after he has been paid by the owner.

SECURITY – protection; assurance; indemnification; terms usually applied to an obligation, pledge, deposit, etc., given by a party to a contract to the other party. The name some-times also is given to a party which becomes surety or guarantor for another. In the construction industry, bonds are considered security against default by the bidder or contractor during the respective process.

SOVEREIGN IMMUNITY – a concept adopted by the United States from the courts in England, precluding any legal action against public bodies for either breach of contract or for tort claims. This doctrine is applicable at the federal, state, and local levels of government. However, over the last century, this doctrine has waned, especially in the area of tort claims. In most of the 50 states, sovereign immunity is no longer in effect, especially in the area of tort claims. At the federal level, Congress consented to being sued for breach of contract in 1887 by the Tucker Act, and in the tort field, Congress passed the Federal Tort Claims Act in 1946, permitting lawsuits against the United States for certain types of legal wrongs.

STANDARD – general recognition and conformity to established practice; a type, model, or combination of elements accepted as correct or perfect.

STANDARD OF PERFORMANCE – (STANDARD OF CARE) – that standard which a professional (doctor, lawyer, Landscape Architect, engineer, etc.) must exercise to the degree of care and expertise which a reasonably competent professional of the same discipline would exercise under the circumstances. The standard of performance is established by the professionals working in the same geographical area.

1963 to help minimize the responsibility of guaranteeing the cost estimate. Prior to that time, “cost estimate” was used.

STATUTE – an act of a legislature declaring or prohibiting some-thing; a particular law enacted and established by the will of the legislative department of government. These laws must be

adhered to by all parties within that jurisdiction.

STATUTE OF FRAUDS – a statute that requires that no suit or action shall be maintained on certain classes of contracts or engagements unless there shall be a note or memorandum in writing and signed by the party to be charged or by its authorized agent. Its object is to close the door to the numerous frauds and perjuries. In essence, this statute declares that unless a contract is put in writing, it may not be substantiated as legally binding in a court of law. However, one should be aware of the fact that oral agreements are legally binding within certain parameters. These parameters are usually established by the Uniform Commercial Code.

STRICT LIABILITY – liability without fault. A case is one of strict liability where neither care nor negligence, neither good nor bad faith, and neither knowledge nor ignorance will save the defendant.

SUBCONTRACTOR – a party which takes over portions of a contract from the principal (prime) contractor or another subcontractor; a party which has entered into a contract, express or implied, for the performance of an act with the party which has already contracted for its performance. Most subcontractor contracts hold the subcontractor to the same terms and conditions which are established in the prime contractor’s contract with the other parties. Generally, subcontractors specialize in specific building trade, and, as specialists, most subcontractors are licensed by the state in which they operate. The subcontractor’s relationship to the prime contractor is that of an independent contractor.

SUBSTANTIAL COMPLETION – the state of completion whereby the building, or a part thereof, is rendered complete to the degree that the owner can use the building, or a part thereof, for its intended purpose.

SUBSTANTIAL CONFORMITY – where a party has complied with the requirements of a writing to the degree that it is essentially the same as that which is required. Substantial conformity might be considered the opposite of material variance. (See MATERIAL VARIANCE)

SUBSTANTIAL PERFORMANCE – exists where there has been no willful departure from the terms of the contract and no omission in essential points; where the contract has been honestly and faithfully performed in its material and substantial particulars, and where the only variance from the strict and literal performance consists of technical or unimportant omissions or defects. In the construction industry, progress payments are made to the contractor based on the substantial performance of the work for that period of time. Usually the issue of substantiality of performance arises when the project is essentially completed, when the owner occupies the building, and when minor deviations from contract requirements become evident. The
contractor demands the unpaid balance of the contract price based on substantial performance, and the owner defends by asserting that the balance need not be paid until every deviation is eliminated.

SUPPLEMENTAL CONDITIONS – when an organization has standard general conditions for inclusion in specifications, supplemental conditions are utilized to modify the general conditions to make them project specific.

SURETY – a party which undertakes to pay money in the event that its principal fails. (See

“SUSPENSION OF WORK” CLAUSE – clause inserted in construction contracts only and which deals with the right of the owner to suspend the work for a period of time as it may determine to be appropriate for the convenience of the owner. When such a clause is inserted into the contract and is then exercised, an adjustment shall be made, an increase in the cost of performance of the contract (excluding profit) necessarily shall be caused by such unreasonable suspension, delay, or interruption, and the contract shall be modified in writing accordingly. However, no adjustment shall be made under this clause for any suspension by the owner if performance would have been suspended by reason of any other cause, including fault or negligence of the con-tractor, or if an equitable adjustment is provided for or excluded under any other provision of the contract.

SWEAT EQUITY – a term used to mean “mutual help” in certain federal agencies’ contracts. The Department of Health and Urban Development (HUD) requires that the tenants of housing built by federal assistance programs, such as housing for the Indians on Indian reservations, con-tribute to the construction of the unit by giving of their manual labor. This labor is known as mutual help or sweat equity.

TERMINATION – to put an end to; to make to cease; to end.

TERMINATION FOR DEFAULT – construction contracts generally contain specific provisions itemizing events of default. However, even if not specifically itemized, delay in performance resulting in a failure to complete the contract in a timely fashion is universally recognized as a breach of contract. Whether the breach for untimely performance justifies an owner in terminating the contract may depend upon whether “time is of the essence” for performance of the contract. In federal construction contracts, time is of the essence, and if the contractor fails to perform by the date specified, the government may terminate the contract for default. In private contracts, where time is of the essence, the owner has a common-law right to terminate if the contractor fails to perform within the time specified, unless the time for performance has been waived or extended by the acts of the party.

THIRD PARTY – a party which is not privy to a contract but which may be bound or benefited through a written or implied legal relationship.

THIRD-PARTY BENEFICIARY – in order for a party not privy to a contract to maintain an action thereon as a third-party beneficiary, it must appear that the contract was made and intended for its benefit. The benefit must be one that is not merely incidental but must be immediate in such
a sense as to indicate the assumption of a duty to make reparation if the benefit is lost.

THIRD-PARTY LIABILITY – a condition whereby a party to a contract may be held liable to a third party related to the contract by its negligent or fraudulent activity in performance of contract. A third party may recover damages where the circumstances are such that the transaction, within the contract requirements, was intended to affect the plaintiff (third party) , and injury to the plaintiff was foreseeable.

TORT – a private or civil wrong or injury; a wrong independent of contract.

TORT FEASOR – a wrongdoer; one who commits or is guilty of a tort.

TREBLE DAMAGES – damages given by statute in certain cases, consisting of the single

damages found by the jury tripled in amount. The usual practice is for the jury to find the amount of the damages and then for the court to order that amount to be trebled.

TURNKEY CONTRACT – a method of organizing a building project in which a contractor and a designer agree to provide a finished building at an agreed-upon price. Upon completion of the project, all the owner has to do is “turn the key” in the door. Most turnkey projects are built for the Department of Housing and Urban Development (HUD).

UNCERTAINTY – a state or quality of being unknown or vague; such vagueness, obscurity, or confusion in any writ-ten instrument, e.g., a contract, as to render it unintelligible to those who are called upon to execute or interpret it so that no definite meaning can be extracted from it.

UNCONSTITUTIONAL – that which is contrary to the constitution. The term can be used in two different senses. The first is that legislation conflicts with some recognized general principle or conflicts with a generally accepted policy. The second is that the legislation conflicts with some provision of the written constitution which it is beyond the power of the legislature to change.

UNIFIED BID – in a multiple prime construction contract, solicitation for bids is presented to the bidders in several separate prime contract packages. In a unified bid procedure, the bidders are permitted to bid on either one or as many of the bid packages as are presented.

UNIFORM COMMERCIAL CODE – a body of laws which governs the sale of goods in almost every state of the United States. Application of the Uniform Commercial Code in the construction industry is rare except in the area of shipping, handling, and purchasing of materials for the project.

UNJUST ENRICHMENT – doctrine stating that persons shall not be allowed to profit or to enrich themselves inequitably at another’s expense. A typical example of this doctrine is when an owner withholds payment to a contractor for work already performed, claiming that work is not acceptable. The value of the performed work far exceeds that portion which the owner considers unacceptable.

WAIVER – the intentional or voluntary relinquishment of a known right. Waiver is essentially unilateral, resulting as legal consequence from some act or conduct of parties against which it operates, and no act of the party in whose favor it is made is necessary to complete it. In the construction industry, an owner may waiver his or her right to a signed change order for work incorporated into the project when the following conditions exist: the owner is aware of the change but does not object; the item is of such magnitude that the change could not be made without the owner’s knowledge; the changes are necessary but were not foreseen by the design professional; and some subsequent oral agreement (the Landscape Architect’s orally
approved substitution and/or change with which the owner agreed) waives the requirement of a signature.

WARRANTY – a promise that a proposition of fact is true.

WARRANTY OF SPECIFICATIONS – the owner’s implied warranty, when providing the plans and specifications, that the plans and specifications are possible to perform, are adequate for their intended purpose, and are free from defect. Moreover, this warranty is not overcome by the usual exculpatory clauses requiring bidders to visit the site, check the plans, or generally inform themselves of the requirements of the work. The implied warranty of specification

suitability has been recognized in every American jurisdiction and applied with equal force to public and private contracts. As with any contractual obligation, the warranty can be overcome by explicit contractual provisions that impose absolute liability for performance on the con-tract.

ZONING – a local ordinance which governs the uses of land and the overall characteristics of the structures that may be erected; the division of a city by legislative regulation into districts and the prescription and application in each district of regulations having to do with structural and Landscape Architectural designs of buildings and of regulations pre-scribing uses for buildings within designated districts.


Ricchini, John A. Construction Management : Legal And Administrative Aspects , Professional
Education Systems, Eau Claire, WI, P.O. Box 1208, Eau Claire 54701, 1985.