"E-Construction" - an Introduction - LAW OFFICE OF ELIAS M. GORDAN

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0 height="100%"><tr> <td valign="top" width=175 BGCOLOR="#A6CAF0" TEXT="#080000"> <div> <B> <TABLE BORDER="0" CELLPADDING="2" CELLSPACING="1" WIDTH="132" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 35 ><NOBR><div> <IMG BORDER="0" SRC="1x1.gif" HEIGHT="29" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" WIDTH="21"></div> </NOBR></tD> <tD VALIGN=TOP><NOBR><div> <IMG BORDER="0" SRC="1x1.gif" HEIGHT="29" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" WIDTH="21"></div> </NOBR></tD> <tD VALIGN=TOP WIDTH="20"><IMG BORDER="0" SRC="1x1.gif" HEIGHT="35" ALIGN="bottom" WIDTH="20" HSPACE="0" VSPACE="0"></tD> <tD VALIGN=TOP><NOBR><div> <IMG BORDER="0" SRC="1x1.gif" HEIGHT="29" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" WIDTH="13"></div> </NOBR></tD> <tD VALIGN=TOP><NOBR><div> <IMG BORDER="0" SRC="1x1.gif" HEIGHT="29" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" WIDTH="27"></div> </NOBR></tD> </tR> </TABLE></B></div> <div> <B>© </B>2001 Elias M. Gordan</div> <div> All rights reserved</div> <bR> <div> <B>Law Office of</B></div> <div> <B>Elias M. Gordan</B></div> <div> Post Office Box 60</div> <div> Palos Park, IL  60464</div> <bR> <div> Phone  708.923.9735</div> <div> Email  gordanlaw@att.net</div> <div> Web    www.gordanlaw.com</div> <div> <A HREF="index.htm" TARGET="_top" TITLE="HOME PAGE LAW OFFICE OF ELIAS M. GORDAN"><U><B>HOME</B></U></A></div> <div> <A HREF="id24.htm" TARGET="_top" TITLE="LAW OFFICE OF ELIAS M. GORDAN About Us"><U><B>About Us</B></U></A></div> <div> <A HREF="id30.htm" TARGET="_top" TITLE="LAW OFFICE OF ELIAS M. GORDAN Links"><U><B>Links</B></U></A></div> <div> <A HREF="id26.htm" TARGET="_top" TITLE="LAW OFFICE OF ELIAS M. GORDAN Contact U"><U><B>Contact Us</B></U></A></div> <bR> <bR> <bR> </td> <td valign="top" BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <B>E-COMMERCE AND THE CONSTRUCTION CONTRACT</B></div> <div> By Attorney Elias M. Gordan</div> <div> (Published in the <U>Indiana Constructor</U>, Associated General Contractors of Indiana,      October/November, 2000)</div> <div> (First in a series of "E-Construction" articles)</div> <div> <A HREF="id62.htm" TARGET="_top" TITLE="EConstruction, Part 2 LAW OFFICE OF ELI"><U>Go to Part II</U></A><A HREF="id62.htm" TARGET="_top" TITLE="EConstruction, Part 2 LAW OFFICE OF ELI"><U> of the Series</U></A></div> <bR> <div>         Slowly, but surely, the construction industry is being transformed by electronic commerce, as public and private owners begin transacting their business online, and requiring their contractors and vendors to follow suit.  Contractors will, in turn, begin requiring their subcontractors and material suppliers to transact business with them online.</div> <DIV ALIGN="LEFT"></DIV> <div> THE FUTURE</div> <div>         Online business transactions can involve electronic communications such as e-mail, EDI (electronic document interchange), and other forms of electronic communications; project extranets (websites only open to project members), and other types of electronic document repositories; EFT (electronic funds transfers); and automated procurement and reordering, all using the Internet to carry out the transactions.  Gradually, owners will use the Internet to manage their facilities, from the planning stage, through design and construction, through completed operations.  Existing digital maps, files, and models can be combined with repair and maintenance histories, to plan and design maintenance and construction projects, through completion and beyond.  Equipment will be inventoried and  monitored using satellite-based locating and transmitting devices, and tracked online. Real-time information will be electronically transmitted to parties needing the information, the moment that it is updated.   The “institutional memory” of a large, dispersed organization will be preserved on disk, or in cyberspace, for anyone in the organization to access, at any time. All that will be required is a computer or PDA (personal digital assistant) with Internet browser software such as “Internet Explorer” or “Netscape”, and access to the Internet through a cable or wireless ISP (see Internet service provider) account.  </div> <div>         Why do this? Because the Internet can save money and time. Documents transmitted over the Internet are usually transmitted in seconds or minutes, not days or weeks.  They do not require postage or overnight-delivery accounts, and will not (under most circumstances) be lost in transit.  Information on a website can be updated instantaneously, and transmitted instantaneously, to everyone needing to know it. Parties can work together on plans  and other documents, marking them up and refining them with a minimum of paper-shuffling. 3-D models (or even 4-D models, incorporating time frames plus 3-D )can serve as a basis for 2-D  drawings, which can serve as a basis for shop drawings, which, using CNC  (computerized numerical control), can control the fabrication operations, without the time, expense, and mistakes of preparing, from scratch, new drawings in each stage.   </div> <DIV ALIGN="LEFT"></DIV> <div> ARE WE THERE YET?</div> <div>         Not yet, but we are getting there fast.  Even allowing for the .com shakeout, major owners are committing to use the Internet in some fashion.  DOTs and other public agencies are using the Internet to publicize projects, solicit bids, open bids, and/or administer their contracts. Work is currently being done, on several fronts, to develop common standards that will allow different software programs to communicate with each other. The National Institution of Building Technology (NIBT), in conjunction with the CSI, the AIA, and other construction-related organizations, has just released a National CAD Standard which is detailed at <FONT SIZE="3" COLOR="#0000BF" FACE="Arial" ><A HREF="http://www.nationalcadstandard.org" TARGET="_top" TITLE="http://www.nationalcadstandard.org"><U>http://www.nationalcadstandard.org</U></A></FONT>.  The Associated General Contractors of America, <FONT SIZE="3" COLOR="#0000BF" FACE="Arial" ><A HREF="http://www.agc.org" TARGET="_top" TITLE="http://www.agc.org"><U>http://www.agc.org</U></A></FONT>, is working to help develop the aecXML programming language for the construction industry.  See the aecXML website at <FONT SIZE="3" COLOR="#0000BF" FACE="Arial" ><A HREF="http://www.aecxml.org" TARGET="_top" TITLE="http://www.aecxml.org"><U>http://www.aecxml.org</U></A></FONT>.  The IAI  (International Alliance for Interoperability), accessible through a link from the aecXML website, is attempting to develop  “interoperability” standards worldwide. And AISC, <FONT SIZE="3" COLOR="#0000BF" FACE="Arial" ><A HREF="http://www.aisc.org" TARGET="_top" TITLE="http://www.aisc.org"><U>http://www.aisc.org</U></A></FONT> , recently endorsed a CIS-2 standard for communication between diverse steel design, detailing, and fabrication software.  </div> <DIV ALIGN="LEFT"></DIV> <div> THE HURDLES</div> <div>         Will a transition to electronic construction contracting be easy? Not necessarily.  Electronic commerce raises new issues that the law, the contracts (including the AIA and AGC form contracts), and the courts have yet to address.  For instance, will an electronic document or digital signature be sufficient to create a binding contract, particularly where a “signed writing” is required?   Recent State and Federal legislation says “yes”, thanks to acts such as the Uniform Electronic Transactions Act, the Illinois Electronic Commerce Security Act, and the Federal E-SIGN act .  <FONT SIZE="3" COLOR="#0000BF" FACE="Arial" ><A HREF="id2.htm" TARGET="_top" TITLE="LAW OFFICE OF ELIAS M. GORDAN Electroni"><U>Read our article on the subject.</U></A></FONT></div> <div>         Nevertheless, certain classes of transactions will not be covered by the new laws, and the parties to the contract will still have substantial leeway in working out the details of an electronic contract, such as authentication of digital signatures.  Electronic commerce in construction raises issues of security (against viruses, phony digital signatures, unauthorized alterations, and hackers) , intellectual property (who has  the rights to the electronic drawings, and to prepare works using the drawings?), permissible file usages (can the CAD drawings be used for construction staking or shop drawings?), and reliability (what happens if the ISP fails or the extranet server crashes?).  Decision-making time will be reduced from weeks to minutes - will the quality of the decision suffer as a result?  Who will bear the risks of failure in the contract?  Limits of liability, indemnification, insurance, and other risk-shifting and risk-mitigation issues, will assume a new level of importance in contracts transacted in cyberspace.  <FONT SIZE="3" COLOR="#0000BF" FACE="Arial" ><A HREF="ucita.htm" TARGET="_top" TITLE="A Dangerous New Software Law LAW OFFICE "><U>Read our article on another far-reaching law.</U></A></FONT></div> <div>         Last, but not least, electronic commerce promises varying levels of change in an organization  and  its people, as old dogs, and young dogs alike, will have to learn new tricks, and more often.</div> <div>         Will this happen overnight?   No, but it will happen-soon .  The wise construction-oriented business will start planning for these changes now, working with its management, its employees, its insurers, its legal counsel, and its vendors and advisers. There is a lot to do, and a lot to learn, but we can do it and learn it, together. </div> <div> As always, please <FONT SIZE="3" COLOR="#0000BF" FACE="Arial" ><A HREF="id26.htm" TARGET="_top" TITLE="LAW OFFICE OF ELIAS M. GORDAN Contact U"><U>contact us</U></A></FONT> if you have further questions.</div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <B>DISCLAIMER</B></div> <div> The information contained in this guide is meant only to convey general information, and is not intended to serve as legal advice or counsel, nor is it meant to create an attorney-client relationship.  The information presented here is subject to change or modification that any time without notice, and may not apply to the specific facts of your case.  Accordingly, you should check with a with an attorney before acting on this information, to make sure that it applies to your situation. </div> <bR> <div> <A HREF="index.htm" TARGET="_top" TITLE="HOME PAGE LAW OFFICE OF ELIAS M. GORDAN"><U><B>BACK TO HOME PAGE AND RECENT NEWS</B></U></A></div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <B>Law Office of Elias M. Gordan, </B><FONT SIZE="3" COLOR="#0000BF" FACE="Times New Roman" ><A HREF="http://www.gordanlaw.com" TARGET="_top" TITLE="http://www.gordanlaw.com"><U><B>http://www.gordanlaw.com</B></U></A></FONT><B> </B></div> <div> <B>Post Office Box 60, Palos Park, IL, 60464   </B><FONT SIZE="3" COLOR="#0000BF" FACE="Times New Roman" ><A HREF="http://www.gordanlaw.com/id26.htm" TARGET="_top" TITLE="http://www.gordanlaw.com/id26.htm"><U><B>email gordanlaw@att.net</B></U></A></FONT></div> <div> <B>708.923.9735</B></div> <div>                  </div> </td> </tr></table></body>