I85PREP
⌘ K
PAQE study materials
PAQE study resources

PAQE: Professional Practice, Ethics, and Business Management

PAQE · Work through your exam, one topic at a time.

All guide sections

Professional Practice, Ethics, and Business Management

This domain tests the business and ethical frame around practice: the standard of care, contracts, fee structures, licensure, and where the architect's duty actually runs.

Core rules

  • Standard of care. The architect owes the skill and care ordinarily provided by architects practicing under similar circumstances - not perfection and not a guarantee of results. Negligence is a failure to meet that standard; a bad outcome alone is not negligence.
  • Ethics. The AIA Code of Ethics organizes duties into three canons: obligations to the public (Canon I), to the client (Canon II), and to the profession (Canon III). Conflicts of interest, undisclosed compensation, and misrepresentation of qualifications are core violations; so is signing off on work you did not supervise.
  • Contracts. B101 is owner-architect; A101 is owner-contractor stipulated sum; A201 is the general conditions. Key risk clauses: indemnity (broad-form versus comparative), limitation of liability, consequential damages waivers, dispute resolution, and ownership of instruments of service.
  • Fee and overhead math. Direct labor × overhead multiplier + profit yields the fee. Break-even is the multiplier that recovers only direct labor plus overhead; profit is whatever the fee adds beyond it.
  • Licensure. AXP experience, the ARE divisions, and jurisdiction-specific requirements lead to initial licensure; the NCARB Certificate supports reciprocity through the Mutual Recognition Arrangement.

Worked example

Direct labor on a project is $250,000. The firm's overhead rate is 1.5 times direct labor, applied as a multiplier of 2.5, and profit is set at 20% of total cost. Total cost = $250,000 × 2.5 = $625,000. Fee = $625,000 × 1.20 = $750,000. On a $15 million construction value that is 5.0% - a reasonable check, and it clarifies that cutting the fee to 4.5% removes most of the profit rather than trimming overhead.

Traps

  • Confusing the standard of care with a warranty of a perfect result.
  • Signing a contract with broad-form indemnity that shifts another party's fault onto the architect.
  • Quoting a fee percentage without confirming scope, deliverables, and reimbursables.
  • Assuming licensure in one jurisdiction permits practice in another without a certificate or comity process.