Case #6

Awesome Architects, Inc. (AAI), an architectural firm, to create the plans and

specifications and to administer the project. Based upon this design, the owner

entered into a $2 million fixed-price contract with Prime Builder, Inc. MMI used the 2007

American Institute of Architects (AIA) standard documents dealing with construction

services: A101/201-2007. During performance, AAI refused to authorize payment for certain work because it did not conform to the design. Prime Builder submitted a claim, contending the design was ambiguous. As Prime Builder read the requirements, the work complied with the

contract documents. Privately, the AAI's architect believed the contractor's reading of

the design made sense, although it was not what he intended. Desiring the project to

comply with his intentions, the architect denied the claim. The contractor requested mediation with the owner, and the owner agreed. The mediator, a retired engineer, tried to get each side to see the other's understanding of the design requirements. The owner also saw the contractor's perspective and told the mediator he would settle by paying half the cost of the increased work. The contractor rejected that settlement and demanded arbitration. During arbitration, the contractor discovered that the arbitrator (a lawyer) had been college classmates with AAI's architect and that (after a 20-year hiatus) they had rediscovered each other on Facebook. The lawyer-arbitrator had not revealed this relationship before agreeing to arbitrate, and none of the parties were aware of it. The arbitrator entered an award in favor of the owner. When the owner sought to have the award confirmed by a trial court, the contractor (having learned of the

relationship) instead asked the court to vacate the award because the arbitrator was

biased.

Question:

Please evaluate this scenario from a legal perspective. I will be looking for legal terms and jargon, case law justification and citation of source of your response. You need to include at minimum a statement and/or discussion on the source or statement of the problem; rights and duties; sub-bids rights/issues; bidding bargaining situations and penalties/notices/claims/contracts. Please provide some original thought. Please provide no more than 2 graphs or tables if applicable.