Uniform Contract

"Article IX. It is hereby mutually agreed between the parties hereto, that the sum to be paid by the Owner to the Contractor for said work and materials shall be subject to additions and deductions as herein before provided, and that such sum shall be paid by the Owner to the Contractor , in current funds, and only upon certificates of the Archi tect, as follows: "The final payment shall be made within days after the completion of the work included in this contract, and all payments shall be due when certificates for the same are issued.

"If at any time there shall be evidence of any lien or claim for which, if established, the Owner of the said premises might become liable, and which is chargeable to the Contrac tor , the Owner shall have the right to retain out of any payment then due or thereafter to be come due an amount sufficient to completely in demnify against such lien or claim. Should there prove to be any such claim after all payments are made, the Contractor shall re fund to the Owner all moneys that the latter may be compelled to pay in discharging any lien on said premises made obligatory in consequence of the Contractor's default." This article is self-explanatory. It should, like Article VI, be considered subject to any changes or alterations in plans or specifica tions. The last paragraph is intended to pro tect the owner against liens placed by sub contractors or by people furnishing material, in case a contractor should have attempted to over-finance the work, so to speak. it often happens that the contractor does not pay his bills until after he has received his monthly installments from the owner; and sometimes, with too many irons in the fire, the contractor is likely to be so much involved as not to set tle his accounts. This paragraph is very use ful in such cases, and provides the owner a much needed protection.

"Article X. It is further mutually agreed between the parties hereto, that no certificate given or payment made under this contract, ex cept the final certificate or final payment, shall be conclusive evidence of the performance of this contract, either wholly or in part, and that no payment shall be construed to be an acceptance of defective work or improper materials." This is in the nature of a legal pro tection to the owner. Tinder some cir cumstances, if an owner makes payment for certain work performed, the courts would consider it as evidence that the work performed had been satisfactory; and this article is inserted in order to guard against the owner being placed at an unfair disadvantage upon paying any certifi cate except the final one.

"Article XT. The Owner shall, during the progress of the work, maintain insurance on the same against loss or damage by fire, the policies to cover all work incorporated in the building, and all materials for the same in or about the premises, and to be made payable to the parties hereto, as their interest may appear." While the building is going up, the owner makes partial payments which are supposed to be aproximately equal in value to the actual work done; and by virtue of these, he becomes the owner of the completed portion of the work. It is therefore his business to insure for the further protection of all parties. It is sometimes wise to provide that the policy shall be in the custody of the architect until the final payment has been made. The archi tect will then see to it that the insurance is actually taken out, and that the policies are in the proper form.

"Article MI In case the Owner and Con tractor fail to agree in relation to matters of pay ment, allowance, or loss referred to in Articles III or VIII of this contract, or should either of them dissent from the decision of the Architect referred to in Article VII of this contract, which dissent shall have been filed in writing with the Architect within ten days of the announcement of such decision, then the matter shall be re ferred to a Board of Arbitration to consist of one person selected by the Owner , and one person selected by the Contractor , these two to select a third. The decision of any two of this Board shall be final and binding on both parties thereto. Each party hereto shall pay one-half of the ex pense of such reference." This is the standard arbitration agree ment. It often happens that in an arbitration of this kind each party will select a represen tative, and these two representatives will hear the evidence and attempt to come to an understanding without the selection of the third arbitrator. If they disagree, the whole controversy then boils down to a discussion in which each of the two representatives is an advocate for the side which has enlisted him; and the deciding vote is cast by the third rep resentative, who is thus made a sort of ref eree. This should be avoided by the selection of the third man in the first stages of the pro ceeding—thus, in the long run, avoiding ex pense and rendering probable the obtaining of a more equitable adjustment of the differ ences.