South Carolina Contracts & Agreements
Contracts and agreements are the most heavily weighted section of South Carolina's Business Management and Law exam. This chapter covers the elements of an enforceable contract, change orders, liquidated damages, and the AIA general conditions.
Elements of an enforceable contract
An enforceable construction contract requires an offer, acceptance, and consideration (something of value exchanged), between parties competent to contract, for a lawful purpose. Notarization and board pre-approval are not general requirements; the substance of the bargain is what makes the contract binding.
Change orders and liquidated damages
Scope changes should be authorized by a written change order stating the added work, price, and time. A liquidated-damages clause sets a pre-agreed, reasonable estimate of delay losses - often a fixed sum per day - and is enforceable when it is a genuine estimate rather than a penalty.
The AIA general conditions
In a standard AIA contract set, the A201 General Conditions of the Contract for Construction (current edition A201-2017) is the rulebook governing notices, claims, changes, payments, and disputes, and it is referenced by the owner-contractor agreement. G702 is a pay application, A701 governs bidding, and B101 is the owner-architect contract.