Secret confession time here: I *love* my Law & Order. And while I’ve been known to suffer through SVU or, God forbid, Criminal Intent, it’s the original Law & Order (with uber-cool Detective Lennie Briscoe and the always wild-eyebrow of Jack McCoy) that really makes my day.
Some clients wonder why I like to watch a legal show on television after a day of practicing law. The answer is because the real world of law is nothing like that on shown on TV. Things happen so fast and so amazingly on the show, it is fun way to wind down the day.
On Law & Order, a subpoena is issued for bank documents, and, faster than you can say, “cha-chunk”, the documents are rolling through the office. Court cases are wrapped up in neat tidy 60 minute packages (including time for discovering the real killer). The lawyers get to ask unfair questions—make self-serving testimony and arguments to the jury—and it doesn’t matter, because they are on the side of truth, justice, and the American way. Law & Order is many things, but an accurate representation of a court case, it is not.
What does this have to do with YOUR court case? Everything. Sure, you expect your construction case will be different from a “sexy” homicide case, but are you really prepared for just how different it will be? How long it will take? The delays, stalling, and prevarication the other side will be allowed? Probably not. Until now.
Over the next several weeks, I plan to walk you through a “typical” construction defect lawsuit—from the first initial phone call from the project manager that something might be amiss, to the dreaded yellow paperwork delivered by the Sheriff (if you are really lucky), the famed “courthouse steps” settlement discussions, and even the angst-producing knock on the jury room door announcing a verdict. Stay tuned for Part 1 of the new series: Law & Order: Hard Hat files, starting next Tuesday. [And Dick Wolfe, if you steal my title for your next television series, please give me credit and a cut!]
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In the past on this blog, I have pointed out the benefits of Limitations of Liability clauses. These are the clauses that state that the most damages that your Firm can be responsible for is capped at a certain dollar amount or your contracted fee.
Do you have a limitations of liability clause in your professional services contract? You should. Best practice would be to have such a clause that limits damages against you to a set amount. For example:
Engineer’s liability to Client for any and all injuries, claims, losses, expenses, damages or claim expenses arising out of this agreement, from any cause or causes, shall not exceed the total amount of $50,000 or the amount of Engineer’s fee, whichever is greater.
While best practice is to have such a provision, it is not always enforced. In a case arising out of the Western District of North Carolina, the court noted that such provisions will not be enforced where the result would be unconscionable and “elicit a profound sense of injustice.” See Performance Sales & Mktg., LLC v. Lowe’s Companies, Inc.,2010 WL 2294323 (W.D.N.C. June 4, 2010).
What does this mean in practical terms? It means that you should endeavor to include a limitation of liability clause, but don’t necessarily think that if you have that you’ve capped your risk. A court can always decide that the clause is unconscionable. But, such a limitation is one more thing to “hang your hat on” if and when you find yourself staring down the barrel of litigation*.
* If, however, you are facing litigation, make sure you sign up for regular blog updates. Starting next week, I am writing a new series on the anatomy of a construction lawsuit, so stick around!
Photo: (c) BabbNet via CC.
Today we welcome another guest author to the blog– Jonathan Newby. Jonathan is in the brokerage business, and runs a website relating to brokerage fees. Thanks Jonathan for your sharing your thoughts today.
Arbitration may be a better alternative to some construction disputes, assuming that you use a qualified and skilled arbitrator or arbitration panel. Here are five benefits for using arbitration over litigation:
- Arbitration means that the decision maker is an experienced industry professional instead of a lay jury.
- Arbitration can provide better protection for your assets by minimizing your risk of large losses sometimes seen with jury verdicts.
- Arbitration can provide flexibility in scheduling, versus court where you are told when and where to show up without much room to negotiate.
- Arbitration can put an end to your case faster. The time taken by an arbitrator is usually less than that to get a case to court to resolve a construction dispute.
- Arbitration costs can be much less when compared to the one charged during any other legal process like litigation.
These are five reasons why arbitration may be better for your construction dispute, so consider using an arbitration provision in your next construction contract.
Editor’s Note: As I’ve previously noted, there are pros and cons to arbitration in lieu of trial. The better venue is in part based on the type and size of contract, as well as numerous other subjective considerations. Discuss whether arbitration is appropriate for you with your construction law attorney.
Thoughts, comments, or questions? Drop Jonathan or me a note in the comments section, below.
Photo (c) freefoto.com.
Today’s Tip is a simple one: Pick up the phone to ensure good communications on the construction project. Too many of us naturally default to email or text message when communicating on the fly. Without the tone of voice, however, many times things get misconstrued or taken out of context.
I’m sure you’ve had the experience of emailing someone, and later learning they are mad or offended at something you said. You thought the comment was innocuous. They took it the wrong way. Apologies were necessary; feelings were hurt.
While telephoning the other party can take more time, it keeps things on an even keel. Tones can be ”read” and misunderstandings can be cleared up right away.
The next time you need to have a substantive communication with the Owner or Contractor, try the telephone. You know, that email-checking/text-enabling device that is always with you? It can telephone folks too. Try it.
This post was in no way inspired by any misunderstood emails involving the author. (Am I serious, or kidding? Hard to tell, isn’t it?).
Photo: (c) Victor Manuel via Creative Commons license.
Interested in learning about contract drafting strategies? Make plans now to attend a live webinar entitled “Construction Contract Drafting Strategies: Crafting Enforceable Payment, Performance, Termination and Damages Provisions”.
I will be one of 3 speakers for the webinar, which will be held Wednesday, September 7th from 1:00 PM-2:30 PM Eastern Time.
This CLE webinar will include best practices for counsel to owners, contractors, and design professionals to mitigate risk and resolve contract disputes.
Questions addressesd will include:
- What are the critical provisions in construction contracts that demand careful attention and negotiation by owners and contractors?
- What are the most commonly disputed issues during construction contract negotiations and what are some effective strategies for resolving them?
- What are the best practices for counsel to building owners, contractors, and design professionals to minimize liability for their clients when entering construction contracts?
To register, click here. Early registration discounts end on August 19th, so don’t delay!
Photo: “Public Speaking” by JASElabs via Creative Commons License.