Vision

A Configure-to-Order marketplace is emerging across the building industry. Housing is starting to be assembled from pre-engineered, interoperable components rather than drawn, bid, and built as one-off prototypes. For that marketplace to work at scale, its legal infrastructure has to evolve as fast as its technical one. Transactions between builders, manufacturers, and owners need the efficiency and predictability the Uniform Commercial Code once brought to manufactured goods. The product platforms of a CTO marketplace need the building industry to move off the Common Law service contracts that are the norm today. The Center for Offsite Construction is preparing the ground for that shift. The CfOC does not aim to rewrite the law. It aims to frame the questions that guide reform and to demonstrate the drafting that answers them. It convenes builders, legal experts, lenders, insurers, and policymakers to align the momentum of industry with the deliberative pace of legal reform.

The Problem

Today’s building contracts were written for a different economy. Rooted in Common Law, they were designed to govern bespoke, one-off projects delivered through drawings, field labor, and negotiated services. Value in that system is measured in hours and deliverables, not in standardized, repeatable products. The legal tools that once organized craft-based construction now impede industrialized delivery. Manufacturers that produce modular components transact under service agreements written for on-site work. Lenders struggle to collateralize unfinished products that have no legal definition as goods. Insurers lack consistent language for when risk transfers from the factory floor to the foundation.

Defenders of the current framework note that Common Law offers flexibility and long-tested remedies. Those strengths depend on interpretation, and interpretation is exactly what slows product-based transactions.

The dispute record suggests that Common Law only approaches create ambiguity in the form of friction already showing up in modular delivery. (ConsensusDocs has a good practitioner explanation of why modular construction creates legal ambiguity.¹) In one ASCE study, researchers analyzed 39 publicly available U.S. law cases involving modular construction disputes and identified 40 dispute causes.² The most common causes included payment holds and delays, project-completion delay, poor communication among stakeholders, and lack of collaboration between trades. These are not peripheral problems; they are the transaction points where a product-based delivery system needs clearer rules.

The evidence base is still thin, which is itself part of the problem. A 2024 review of offsite-construction dispute research found that only three studies had analyzed offsite dispute causes using litigation cases, while also concluding that contractual and financial factors are among the most crucial sources of offsite-project disputes.³ The CfOC’s UCC work responds to that gap by asking where title, payment, risk, warranty, and collateral should attach when a factory-made building component moves from product to real property.

The CfOC is studying where the mismatch truly resides. The obstacles may be rooted in professional custom, or in state-level statutory definitions that no longer fit modern production. Answering that distinction is the work ahead.

The Current Awkward Hybrid

The U.S. construction industry is already living in a legal in-between. Projects that rely on modular components are neither wholly service-based nor fully product-based. Modular manufacturers sign service contracts, ship physical goods, and bear risks that belong cleanly to neither side of the law. A factory-built kitchen or bathroom pod is fabricated, tested, and serialized like any manufactured product. Sold under a Common Law service agreement, it still carries an ambiguous warranty and a per-project negotiated title transfer. Lenders and insurers are left uncertain whether to treat these products as inventory, as real property, or as something in between. This ambiguity forces every project team to renegotiate scope, payment, and liability from scratch. Legal interpretation substitutes for standardization, and the cost of that interpretation erodes the efficiencies industrialized construction promises. The CfOC calls this condition the awkward hybrid. It is a phase where new technologies have outpaced the legal structures meant to govern them.

The CTO Marketplace

In every well-functioning Configure-to-Order marketplace, speed and certainty are the rule. Products are drawn from catalogs, ordered through standard interfaces, and delivered under agreements that minimize interpretation. The price on the sticker is the visible tip of an invisible system of trust.

A Market Organized by Understanding

Behind it sit standardized contracts, uniform warranties, codified return rights, and shared expectations about quality and liability. The buyer knows what they are getting. The seller knows when they will be paid. Every participant transacts without lawyering the deal from scratch. Housing production remains outside this logic. Each project is a prototype and each contract a negotiation. The CfOC studies what legal structures, product definitions, and contractual norms would let housing components carry the same clarity as a car’s sticker price.

The Federation Effect in the Market

A federation of firms cannot rely only on goodwill or repeat relationships. It needs transaction rules that survive when the parties are new to one another. Standard CTO agreements and UCC-oriented product treatment make it easier for manufacturers, developers, lenders, insurers, and owners to understand what has been bought, when risk transfers, and what obligations attach to the product.

Where this stands today (new)

The CfOC has moved from framing the problem to demonstrating the solution. The April 2026 edition of the whitepaper now runs to a full manuscript with worked appendices and sample drafting. It is co-authored by CfOC Senior Research Fellows drawn from a national contractor and from real-estate law. The CfOC is now in active conversation with the country’s uniform-law bodies. The Uniform Law Commission is preparing editorial work on how hybrid contracts should be drafted. That work opens a direct path to collaboration, where a CfOC briefing report can become a shared blueprint for drafting and a foundation to fundraise against. The CfOC has also drawn counsel from the American College of Real Estate Lawyers and from AIA Contracts, both of which have opened their doors for continued advice. The CfOC is now interviewing institutional partners to co-own the drafting phase.

How the legal mateline connects to the roadmap (new)

This is the legal half of the physical-standards layer. 1220 and 1230 define the physical mateline, the seam where a manufactured product meets a building. This work defines the legal mateline at that same seam, the point where title, risk, and warranty transfer. The whitepaper coins that term for a reason. A clean physical connection means little if the legal connection stays ambiguous. Together the two let a pod or a panel become a transferable, financeable, insurable good. The legal mateline also underwrites the digital layer. A configurator can only sell a product that can be cleanly transacted, so .CTO and the marketplace depend on the rules this work defines.

Progress

The project runs in six phases. Phase 0 is complete. The CfOC convened a Senior Research Fellow retreat, drafted the whitepaper, and gathered first comments from litigators and contract bodies. We are now in Phase 1, producing the public briefing report and convening the roundtable series while engaging the uniform-law bodies. Phase 2 drafts UCC-governed templates and role definitions. Phase 3 field-tests them on modular housing pilots. Phases 4 and 5 carry the work through public feedback and then dissemination toward statutory review.

Phase	Milestone	Status
0	Founding research — SRF retreat, draft whitepaper, first commenters	✓ Done
1	Coalition formation & research — briefing report & roundtables	● In progress← we are here
2	Drafting of legal templates	Upcoming
3	Field testing & pilot projects	Upcoming
4	Public feedback, annotation & revision	Upcoming
5	Dissemination & adoption	Upcoming

Funding

This project prepares the legal and institutional groundwork for the shift from a bespoke, service-based economy to a Configure-to-Order marketplace. Modular manufacturing has advanced rapidly. The law that governs it has not. The CfOC proposes to examine the mismatch, document its real-world effects, and define the questions that must be answered before modernization can proceed. Over a twelve-month period the CfOC convenes working sessions with manufacturers, builders, lenders, insurers, code officials, and legal scholars. These sessions map where modular products move between goods, services, and real property, and where ambiguity produces friction. This project organizes the inquiry that makes legislation possible rather than drafting legislation itself.

Deliverables. The Phase 1 work produces a public briefing report of roughly 25 to 30 pages that documents how modular products move through fragmented legal categories and articulates five to eight foundational questions for further study. It produces a roundtable series of three moderated sessions across manufacturing, finance, insurance, law, and government. It produces a stakeholder map of the organizations whose participation any future uniform-law effort would require. It produces an archival dataset of anonymized contract excerpts and regulatory references illustrating the awkward hybrid. It produces a public presentation timed to the December uniform-law meeting. Later phases draft, test, and publish the legal tools themselves, including UCC-governed sales templates for pods, panels, and cartridges, addenda for ETO hybrids, and role definitions for Specifier, Integrator, and Platform Provider.

Funding status. The CfOC is pursuing federal and philanthropic support and has re-issued its federal housing application with the whitepaper and a focused ask. The CfOC seeks $49.7K to complete Phase 1. The full phase budget below carries the work from coalition formation through dissemination and adoption.

Phase	Estimated cost
1 · Coalition formation & research	$49,700
2 · Drafting of legal templates	$390,100
3 · Field testing & pilot projects	$291,400
4 · Public feedback, annotation & revision	$223,800
5 · Dissemination & adoption	$1,116,700
Total	$2,071,700

Current ask ($49.7K) funds Phase 1: the public briefing report and the roundtable series.

Key Outcomes

The near-term prize is a briefing report that the Uniform Law Commission accepts. Acceptance converts the CfOC from an outside voice into an official drafting collaborator. That single step unlocks everything after it. It lets the CfOC finalize the whitepaper against a real drafting target. It justifies standing up a consensus committee around hybrid-contract language. It opens a credible, funded path to model UCC-aligned agreements that lenders, insurers, and manufacturers can actually use.

The downstream benefits follow from that legal clarity. Manufacturers gain predictable contracts and enforceable rights. Developers and lenders receive standardized, collateral-backed agreements. Project timelines improve through clearer scopes and fewer change orders. Modular catalogs and product platforms become viable at scale. The CfOC also reframes legal modernization as a housing-affordability issue, which connects the productivity gains of offsite construction to a broad public good. Each outcome builds the evidence base for the next round of grantmaking, model legislation, and curriculum.

Assessment

Success at this stage is measured by uptake, not by pilots. The clearest signal is the Uniform Law Commission accepting the briefing report and naming the CfOC as a collaborator on hybrid-contract drafting. A second signal is the seniority and range of the legal and industry experts who engage through the roundtable series. A third is the set of foundational questions surviving expert scrutiny and converging into a consensus agenda. The CfOC also watches whether real-estate and construction-law bodies return for further counsel, since repeat engagement shows the framing is useful to practitioners. The whitepaper itself is a measurable artifact, and each edition adds worked drafting and contributed practitioner evidence. Later phases add field measures once templates exist. Those measures include legal review of enforceability and UCC compliance, deployment on three modular housing pilots, and metrics for contract cycle time and payment acceleration.

Key Partners

The Center for Offsite Construction convenes this work. The CfOC runs the interviews, the roundtables, and the synthesis, and it is currently interviewing institutional partners to co-own the drafting phase.

Advisors in active conversation. The Uniform Law Commission is the nation’s body for drafting model state law. Its editorial work on hybrid contracts creates a direct opening for collaboration, and the CfOC’s aim is to convert that conversation into an official drafting partnership. The Joint Editorial Board for Uniform Real Property Acts advises on real-property law, is a natural recipient of the framing questions, and represents the venue for any future uniform-law study.

Engaged for counsel. The American College of Real Estate Lawyers brings elite real-estate-law expertise and has invited the CfOC back for further advice, which pressure-tests the legal framing. AIA Contracts stewards the dominant construction agreement templates, and its continued counsel matters because any UCC-aligned agreement has to interoperate with existing AIA conventions.

Research and field coalition. CfOC Senior Research Fellows co-author the whitepaper and carry the research, drawn from national contractors and from real-estate law so the work is grounded in both delivery and statute. General contractors and trade partners validate field-level risk allocation and contribute practitioner evidence. Developers and nonprofit housing organizations provide project case studies and gain financeable, insurable modular delivery. Legal scholars and federal and state housing agencies contribute comparative expertise and align the work with affordability goals.

Key Idea

Every CTO tool lowers the cost of trusting another firm. These standard forms of agreement document that confidence.

1. Bradley E. Sands, Associate, Jones Walker and Danielle Williams “Nailing Down the Details: The UCC’s Impact on Construction Contracts” July 11, 2024 ↩︎
2. Mohamad Abdul Nabi and Islam H. El-adaway “Understanding Disputes in Modular Construction Projects: Key Common Causes and their Associations” January 1, 2022. ↩︎
3. Merve Pelinsu Yıldıran and Gökhan Demirdöğen “Identification of Contractual and Financial Dispute Causes in the Off-Site Construction Projects” August 16, 2024. ↩︎