b'BUSINESS TIP depends upon how well all partiesMoreover,well-draftedpass-canagreeontheirinterpretation,throughprovisionsshouldonly such as:includetermsthatalreadyexistWhohasauthoritytoapprovein the prime contract; and should achangeorder,claimordelaynotflowdowntheentireprime notification and in what form itcontractbecausedoingsointro-shouldbesubmitted,detailed,ducescontradictionswithother andsupportedbydocumenta- subcontract terms. tion?Toassistpartieswithdraft- Who will have the responsibilityingpass-throughclauses,The forprosecutingaclaimagainstAmericanInstituteofArchitects theownerandhowtherecov- (AIA), in its A2012017 provides eryandattorneysfeeswillbesubcontractual relations language, allocatedwhetherarbitrationusedinowner-generalcontractor or litigationand which partiesagreements,bywhichcontractors will be required or permitted tocanrequiresubcontractorstobe participate?boundtothecontractorsbytheWhat happens if there are pass- same prime contract terms and to through claims of subcontractorsassumetowardthecontractorall (i.e., claims the owner is respon- the obligations and responsibilities sible for) and claims that are onlythat the contractor assumed toward betweenthegeneralcontractorthe owner. It also allows subcon-and a subcontractor?tractors the benefit of all rights and remedies against the contractor that Importance of properly draftedthe contractorby the prime con-pass-through clauses tracthas against the owner, and Asthepass-throughlanguagerequires the contractor to identify in prime contracts and subcontractstosubcontractorsanytermsand tendstoflow-downdamages,conditions of the subcontract that limits of liability or indemnificationmay be at variance with the prime downstreamfrom the owner andcontract documents.generalcontractorleveltolowerSimilarly,theAIAslanguage tiers of subcontractors and suppliersestablishingthecontractualrela- pass-through clauses become notionshipbetweencontractorand less important than any other termssubcontractor in the A4012017, in a construction contract.which cross-references A2012017, It is essential that drafters reviewpassesthedutiesandresponsi-the prime contract and the com- bilities of the Contractor under the pletesetoftheupstreamdoc- Prime Contract to the Subcontractor umentsinordertocrafteffec- withrespecttoaportionofthe tivepass-throughprovisions.work designated in the completed 36TileLetter | December 2019'