Reference no: EM133199997
FACT SCENARIO
Geddy Construction (GC) has a written contract with Owner to furnish and erect a 10,000 sq.ft. metal building in Ripley, Oklahoma. The contract between GC and Owner requires all changes to be accomplished by written change order or written change directive and is governed by AIA Document A201-2017, which sets forth a detailed procedure for the submission of claims, mediation and arbitration. GC enters into an oral contract with Subterranean Construction (Sub) to perform sitework and to construct the building pad. After construction begins, Owner verbally directs GC to increase the size of the building to 15,000 sq.ft. Owner refuses to sign a written change order or to issue a written change directive. GC, in turn, verbally directs Sub to construct a larger building pad to accommodate the increased size of the metal building. To keep the project moving forward, GC and Sub perform the additional work despite Owner's failure to sign a written change order or issue a change directive. GC timely submits a claim to the Initial Decision Maker for the added cost. After the claim is denied, GC initiates the contractually-required mediation and arbitration processes. In the interim, Sub gets tired of waiting for payment and files a separate lawsuit against GC. The project is completed shortly thereafter without further incident and Owner accepts all of the work, despite refusing to pay for the extra cost associated with increasing the size of the building.
Question
Select the best answer which explains whether or not "flow down" applies in the dispute between Sub, GC and Owner.
Group of answer choices
a. Flow down does not apply because the Owner never signed a written change order for the extra work.
b. Flow down applies because it benefits all of the parties by helping them streamline the dispute resolutionb process.
c. Flow down does not apply because GC and Sub have an oral agreement and, therefore, there is nothing to incorporate by reference, including provisions for resolving claims.
d. Flow down applies because Sub was working on Owner's property, so it has to follow Owner's rules.