Instructions: C106™ – 1993 Digital Data Licensing Agreement

General information.

Purpose. AIA Document C101™–1993, Joint Venture Agreement for Professional Services, is intended to be used by two or more parties to provide for their mutual rights and obligations. Parties may be all architects, all engineers, or a combination of architects and engineers. It is intended that the Joint Venture, once established, will enter into an agreement or agreements with the Owner to provide professional services.

The document provides for selection between two methods of Joint Venture operations. The Division of Compensation method assumes that compensation is linked to specific phases or kinds of services which are then proportionately allocated among the parties at the outset of the Project. Each party’s profitability is then dependent on individual performance of pre-assigned tasks and is not directly tied to that of the other parties. Alternately’, ‘the Division of Profit and Loss method is based on all compensation being allocated to the Joint Venture’, ‘which is in turn billed by each party for the services performed at cost plus a reasonable amount for overhead. Thus’, ‘the ultimate profit or loss of the Joint Venture is divided between the parties upon completion of the Project based on their respective interests.

Related Documents. This document is not directly linked to any other AIA document by parallel construction or by reference. It may be used alone or in conjunction with any of AIA’s Owner-Architect or Architect-Consultant agreements.

Dispute Resolution—Mediation and Arbitration. This document contains provisions for mediation and arbitration of claims and disputes. Mediation is a non-binding process, but is mandatory under the terms of this agreement. Arbitration is also mandatory under the terms of this agreement. Arbitration is binding in most states and under the Federal Arbitration Act. In a minority of states, arbitration provisions relating to future disputes are not enforceable but the parties may agree to arbitrate after the dispute arises. Even in those states, under certain circumstances (for example, in a transaction involving interstate commerce), arbitration provisions may be enforceable under the Federal Arbitration Act.

The AIA does not administer dispute resolution processes. To submit disputes to mediation or arbitration or to obtain copies of the applicable mediation or arbitration rules, write to the American Arbitration Association or call (800) 778-7879. The American Arbitration Association may also be contacted at adr.org

Why Use AIA Contract Documents. AIA Contract Documents are the product of a consensus-building process aimed at balancing the interests of all parties on the construction project. The documents reflect actual industry practices, not theory. They are state-of-the-art legal documents, regularly revised to keep up with changes in law and the industry—yet they are written, as far as possible, in everyday language. Finally, AIA Contract Documents are flexible: they are intended to be modified to fit individual projects, but in such a way that modifications are easily distinguished from the original, printed language.

Use of Non-AIA Forms. If a combination of AIA documents and non-AIA documents is to be used, particular care must be taken to achieve consistency of language and intent among documents.

Letter Forms of Agreement. Letter forms of agreement are generally discouraged by the AIA, as is the performance of a part or the whole of professional services based on oral agreements or understandings. The standard AIA agreement forms have been developed through more than 100 years of experience and have been tested repeatedly in the courts

Standard Forms. Most AIA documents published since 1906 have contained in their titles the words “Standard Form.” The term “standard” is not meant to imply that a uniform set of contractual requirements is mandatory for AIA members or others in the construction industry. Rather, the AIA standard documents are intended to be used as fair and balanced baselines from which the parties can negotiate their bargains. As such, the documents have won general acceptance within the construction industry and have been uniformly interpreted by the courts. Within an industry spanning 50 states—each free to adopt different, and perhaps contradictory, laws affecting that industry—AIA documents form the basis for a generally consistent body of construction law.

Use of Current Documents. Prior to using any AIA Contract Document, users should consult www.aia.org or a local AIA component to verify the most recent edition.

Reproductions. This document is a copyrighted work and may not be reproduced or excerpted from without the express written permission of the AIA. There is no implied permission to reproduce this document, nor does membership in The American Institute of Architects confer any further rights to reproduce this document.

The AIA hereby grants the purchaser a limited license to reproduce a maximum of ten copies of a completed C106, but only for use in connection with a particular project. The AIA will not permit reproduction outside of the limited license for reproduction granted above, except upon written request and receipt of written permission from the AIA.

Rights to reproduce the document may vary for users of AIA software. Licensed AIA software users should consult the End User License Agreement (EULA).

To report copyright violations of AIA Contract Documents, e-mail The American Institute of Architects’ legal counsel, copyright@aia.org.

Changes from the previous edition.

Format Changes. The table for reimbursements has been moved from the joint venture agreement to this instruction sheet. All provisions for principal place of business, jurisdiction, fiscal year and Interim Decision Maker have been consolidated and moved to Article 20.

§ 4.3 This Section has been added to create a method of settling controversies or disputes between the parties. In the event an action or decision is not unanimously agreed upon by the Policy Board, an Interim Decision Maker, who is to be designated by the parties as part of the Project Agreement (Article 20), is granted authority to make an interim decision which shall be subject to mediation or arbitration.

§ 5.4 The Policy Board may decide to open one or more joint bank accounts.

§ 7.2 All expenses related to the Agreement must be submitted to the Policy Board for approval.

Article 9 – Insurance.

This article has been completely rewritten. The parties to the Joint Venture should consult with qualified insurance counsel when completing this portion of the document.

Article 9 now adds a requirement that each member of the Joint Venture carry general liability (including sufficient Valuable Papers coverage) and business auto insurance. Workers compensation and employers liability coverages are now mandatory. The new document recognizes that the design team may choose to purchase professional liability coverage for the project together under one policy.

The article specifically notes that these insurance coverages, except professional liability, should be in place at the earlier of the commencement date of the Agreement or the date any services are performed.

The requirements for certificates of insurance have been amended.

Each party to the Joint Venture must now indemnify the other Joint Venturers for fraudulent or dishonest acts of its own employees not covered by the required fidelity coverage.

Article 10 – Commencement and Termination.

§ 10.2 All Joint Venture property and money must be disposed of or distributed prior to termination of the Agreement. Each party is obligated to contribute toward satisfaction of debts and liabilities created by the Joint Venture after termination of the Agreement.

§ 10.4 This Section has been added to clarify the settlement of compensation and expenses due to a defaulting party or to the non-defaulting party should their costs exceed the cost to complete the services. These obligations for payment survive termination of the Agreement.

§ 10.5 This Section requires that any party to the Joint Venture must receive written permission from the other party prior to entering into a contract for services if the Joint Venture does not enter into a Project Agreement with the Owner.

Article 12 – Dispute Resolution.

Article 12 has been rewritten to require that the parties endeavor to settle disputes by mediation prior to arbitration.

Article 18 – Joint Venture Operations.

The principal place of business and fiscal year have been moved to Article 20.

§ 18.2 The table for reimbursement has been moved to this Instruction Sheet under Using C101–1993.

§ 18.2.4 Facsimile services, courier services, and overnight deliveries have been added as reimbursable expenses.

§ 18.2.5 This provision adds a multiplier to the cost of reimbursable expenses.

Article 20 – Other Conditions or Services.

This article has been added for any conditions and descriptions of other services not indicated in the Agreement; for designation of any principal place of business, jurisdiction and fiscal year; and for identification of the Interim Decision Maker

Using C101–1993.

Modifications. Particularly with respect to professional or contractor licensing laws, building codes, taxes, monetary and interest charges, arbitration, indemnification, format and font size, AIA Contract Documents may require modification to comply with state or local laws. Users are encouraged to consult an attorney before completing or modifying a document.

In a purchased paper AIA Contract Document, necessary modifications may be accomplished by writing or typing the appropriate terms in the blank spaces provided on the document, or by attaching Supplementary Conditions, special conditions or referenced amendments.

Modifications directly to purchased paper AIA Contract Documents may also be achieved by striking out language. However, care must be taken in making these kinds of deletions. Under NO circumstances should standard language be struck out to render it illegible. For example, users should not apply blocking tape, correction fluid or Xs that would completely obscure text. Such practices may raise suspicion of fraudulent concealment, or suggest that the completed and signed document has been tampered with. Both parties should initial handwritten changes.

Using AIA software, modifications to insert information and revise the standard AIA text may be made as the software permits.

By reviewing properly made modifications to a standard AIA Contract Document, parties familiar with that document can quickly understand the essence of the proposed relationship. Commercial exchanges are greatly simplified and expedited, good faith dealing is encouraged, and otherwise latent clauses are exposed for scrutiny.

AIA Contract Documents may not be retyped or electronically scanned. Retyping can introduce typographic errors and cloud legal interpretation given to a standard clause. Furthermore, retyping and electronic scanning are not permitted under the user’s limited license for use of the document, constitute the creation of a derivative work and violate the AIA’s copyright.

Cover Page.

Date. The date represents the first date as of which the Agreement is entered into. It may be the date that an oral agreement was reached between all parties or the date of actual execution. No professional services under this Agreement should be performed prior to the date indicated.

Parties. Parties to this Agreement should be identified in the capacity in which the Agreement is to be executed, including the names of the firms and identification of persons signing, the address of the principal office and a designation of the legal status of each party (sole proprietorship, partnership, joint venture, unincorporated association, limited partnership or corporation [general, close or professional], etc.). Although only two parties have been identified on the printed form, additional parties should be identified as third party, fourth party, etc., as appropriate, in the space provided. Although it is not important which party is identified as first party, the parties should be consistently identified throughout the document. Where appropriate, a copy of the resolution authorizing the individual signing the Agreement to act on behalf of the firm or entity should be attached

Joint Venture. The name of the Joint Venture should be agreed upon by all parties and identified here, since it will consistently be used to identify the entity both in this Agreement and in the Project Agreement with the Owner.

Project. The proposed Project should be described in sufficient detail to identify (1) the official name or title of the facility, (2) the address and location of the Project, if known, (3) the name and address of the Owner and (4) a detailed description of the scope of the Project.

Article 15 – Contributions.

Enter initial dollar amount of capital contributions, if any, to be made by various parties. Space has been provided for additional parties.

Article 16 – Schedule of Services.

This page is provided to identify which party is to provide which phase or portion of the services required under the Project Agreement. When the Division of Compensation option is used, it is most important that the schedule of services be carefully prepared and complete as to all important details.

This may be completed by describing the services of each party right on the page. If a separate document is used for this purpose, specific reference to that document should be typed on this page and the document added to the Agreement as an exhibit. The typed reference should include the number of pages added and each successive page should be dated and initialed by all parties.

Occasionally, under the Division of Profit and Loss option, a specific division of services is not predetermined. In these cases, type Not Applicable on this page.

Article 17 – Schedule of Property.

This page is provided to identify property contributed to the Joint Venture, such as desks and chairs. In cases where no property is contributed, type “Not Applicable” on this page.

Article 18 – Joint Venture Operations.

Enter the method of operations to be used by the Joint Venture and fill out the appropriate section. Both options for Joint Venture operations are included in the printed form. THE METHOD NOT CHOSEN MUST BE DELETED FROM THE AGREEMENT.

Division of Compensation Method.

§ 18.1 Interest of the Parties

§ 18.1.1 Enter the division of compensation due each party in the space provided. Space has been provided to add additional parties. Entries can be in percentages or dollar amounts, where known. In either case, the sum of the entries for all parties must equal 100 percent of the total compensation. Make sure all parties identified on the cover page are included here.

Division of Profit and Loss Method.

§ 18.1 Interest of the Parties

§ 18.1.1 Enter the division of profit and loss due each party in the space provided. Space has been provided to add additional parties. Entries are normally in percentages and the sum of all entries must equal 100 percent. Be sure that all parties identified on the cover page are included here.

§ 18.2 The following table is an example to be used in setting the method of compensation:

Title Location Charge to Joint Venture
1 Principals Home Office or Joint Venture Office $______ Direct Personnel Expense plus ___% on straight time; Direct Personnel Expense only on premium time
.2 Supervisory Home Office or Joint Venture Office $______ Direct Personnel Expense plus ___% on straight time; Direct Personnel Expense only on premium time
.3 __________ Home Office or Joint Venture Office Direct Personnel Expense plus ___% on straight time; Direct Personnel Expense only on premium time.
.4 __________ Home Office or Joint Venture Office $______ Direct Personnel Expense plus ___% on straight time; Direct Personnel Expense only on premium time
.5 __________ Home Office or Joint Venture Office $______ Direct Personnel Expense plus ___% on straight time; Direct Personnel Expense only on premium time

§ 18.2.1 Enter the billing rates applicable to the Joint Venture for the five personnel categories. This dollar amount is to be filled in with the Direct Personnel Expense (without fringe benefits) for each of the categories. This normally would be the average rate for various personnel in each group. If it is desired to bill the actual direct salary of every individual in the category, the word actual can be entered in the first blank for each category.

The percent markup on Direct Personnel Expense is to be used on all billings to the Joint Venture. This markup usually covers personnel expenses plus overhead and should be the same for all five categories. Profit should not be included in this percentage. If the hourly rates and percent markup for all parties require additional space delete the word “below” and insert the appropriate reference . Any additional sheets should be numbered dated and initialed by the parties. This information should then be provided for each party in a similar format and the remaining portion of this Section ‘stricken.

§ 18.2.2 Enter the names of the principals for each of the parties who will be part of the Joint Venture.

§ 18.2.4 This Section lists expenses of each party which are billable to the Joint Venture. The list should be reviewed and revised as appropriate by deleting items or identifying specific types of reimbursable expense not listed.

§ 18.2.5 Enter the multiplier to be added to the actual costs of all reimbursable expense.

Article 19 – Insurance Coverages.

§ 9.1 This section specifies certain required insurance coverages to be obtained by each Party. Each party should consult their insurance counsel to determine whether any coverage mentioned is not required, or whether any additional coverage is necessary. The Joint Venture itself may require insurance separate from that carried by the parties to the Agreement.

Once all required coverage has been determined, state the type of insurance and the minimum limits for each party of the Joint Venture. The limits of liability for each of the insurance coverages should be indicated. State all applicable deductibles and clearly cover any provisions for self-insurance that are acceptable to the other party or parties. State the period of time past Substantial Completion that parties to the Agreement are required to carry professional liability coverage.

Article 20 – Other Conditions or Services.

Enter here any other applicable provisions or changes to basic Terms and Conditions such as:

§ 3.2 If Primary and Alternate Representatives are to receive compensation, enter amounts here.

§ 7.1 If expenses prior to execution of this Joint Venture Agreement are to be borne in a manner other than that described in Section 7.1, this should be stated here.

§ 20.1 Identify the principal place of business of the Joint Venture. If separate office space is to be provided for Joint Venture operations, that office address should be entered. If not, the office of one of the parties should be entered, as it will become the mailing address for the Owner under the Project Agreement.

§ 20.2 Identify the jurisdiction agreed upon as applicable to this Agreement (state, commonwealth, etc.). If the Project and all parties exist in the same jurisdiction, that jurisdiction should be entered. If all of the parties and the Project are not in the same jurisdiction, one jurisdiction must be chosen after consultation with legal counsel and entered in the space provided.

§ 20.3 Enter the fiscal year for the Joint Venture. This may be the calendar year or other period determined for appropriate legal and accounting purposes.

§ 20.4 Enter the name of the person who has been mutually agreed upon by each party.

Executing the agreement.

The typed name of the person signing, the person’s title in the firm and the written signature should be entered for each party to the Agreement. Space has been provided for additional parties.

 

Important.

Modifications. Particularly with respect to professional or contractor licensing laws, building codes, taxes, monetary and interest charges, arbitration, indemnification, format and font size, AIA Contract Documents may require modification to comply with state or local laws. Users are encouraged to consult an attorney before completing or modifying a document.

Reproductions. This document is a copyrighted work and may not be reproduced or excerpted from without the express written permission of the AIA. There is no implied permission to reproduce this document, nor does membership in The American Institute of Architects confer any further rights to reproduce this document. For more information, see the document footer and the AIA Contract Documents® Terms of Service.

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