Lessons in construction administration come from everywhere — including the SONY scandal.
In case you are a bear hibernating in a cave (in which case, go back to sleep!), you’ve heard about the SONY hacking that was apparently, but not definitively, done by North Korea due to their displeasure over the movie The Interview. And, you may have found it amusing to read of the inner bickering at SONY, at lease until the threat of a national incident and the (at least temporary) yanking of the movie from its planned Christmas release.
Lost in all of the discussion about taste, censorship, security, and First Amendment rights, however, was a simple lesson for each of us. Never put anything in writing that you wouldn’t want to see on the TMZ report, the Wall Street Journal, or the New York Times. For example, don’t call one of the biggest stars in your studio (Angelina Jolie) a “minimally talented spoiled brat.”
I’ve written about this before, but this is a fine time to remind you that someday, someone will read your emails. And that someone will not be privy to your internal jokes, quirky sense of humor, or understand that you just had a bad day. If you have to have those awkward conversations– have them in person, or at least on the phone. Don’t play around with written communications. Every email, text, tweet, Facebook post, letter, note, or diary entry can be discoverable in a lawsuit.
We’ve all done it. Sent inappropriate emails. Vents. Laments. Stop. Endeavor to be boring rather than funny in all of your online accounts. You may be only laughing on the inside, but you’ll still have a job, respect, and knowledge that there are no hidden documents waiting to shame you at the stroke of a hacker’s keyboard. And, tell your employees to do the same.
Do you have an example of getting an inadvertent email or text? Something that could have been embarrassing if it leaked beyond your firm? Share in the comments below.
Photo courtesy Wikimedia.
Have you ever signed a contract that was “under seal”? You probably have, and you probably have done so without really understanding what it means. In North Carolina, a contract “under seal” means that the contract can be enforced for ten (10) years instead of the usual three. In other jurisdictions, the contract can be enforced for even longer periods of time. [For example, in Delaware, a contract under seal extends the time for brining a claim to twenty (20) years!] Since a sealed contract extends your liability significantly, it is not something you should do lightly.
The phrase “under seal” comes from the old tradition of using a unique wax symbol (such as an engraved signet ring) to identify the owner signing the contract. Today, however, you sign under seal when the words “under seal” or even just “[Seal]” is printed next to your signature, like this:______________ [SEAL] Melissa Dewey Brumback
While it is good to know about seals in general, construction professionals should be more concerned than ever about sealed contracts following a recent North Carolina Court of Appeals decision, Davis v. Woodlake Partners. The Court in Davis held that in a contract to purchase improved property, signed “under seal,” extended the statute of limitations to the ten year statute as authorized by N.C. Gen. Stat. 1-47(2). This is despite the fact that there is a six year statute of repose in North Carolina. In the case, the lawsuit was brought within the 6 years, but outside of the 3 year statute of limitations for ordinary contracts. The Court found the action was timely because of the “sealed” nature of the contract.
What does this mean for construction contracts? You could find yourself liable on a construction contract longer than you intended. Does this case apply in a situation where the 6 year statute of repose was violated? The Court was not faced with that issue, so it’s too soon to tell. The case was a divided opinion, so the state Supreme Court may be weighing in on the issue. Stay tuned.
In the meantime, consider striking through any “seals” on your construction contracts.
Your turn. Take a look at the last contract you were asked to sign. Was it “under seal”? Did you know what that meant when you signed it? Share below.
Photo (c) Losinpun.
Preparing for the Tax Man: Tips for Architects, Engineers, and other small business owners (guest post)
Miss me yet? No, I’m “not dead yet” (for you Monty Python fans). Nor have I fled to Hong Kong (a la Edward Snowden). And no, contrary to rumors, I am not working on a Middle Eastern documentary with Jon Stewart. Ahem. My MIA status was simply due to too much work. Good problem to have, right?
Regular posting will resume next week. In the meantime, since it is, once again, tax time for quarterly filers, I thought this guest post on tax issues particularly appropriate. Even if you don’t file quarterlies, pay attention now to save heart ache at the end of the year!
Looking for a few small-business tax tips? Consider this shortlist to help streamline your process:
1. Proper record-keeping: Year-round record keeping ensures that come tax time, your paperwork will be in order. Make sure that you save all documents relating to deductions in case your business is audited. Because tax credits and deductions change from year-to-year, keeping excellent records allows you to adapt while being able to reference previous years simply by checking your filing.
2. Keep two Acts in mind: Both the Small Business Jobs Act and the Patient Protection and Affordable Care Act (aka “Obamacare”) help you manage your tax burden. The first has over 17 tax provisions that decrease taxes for small businesses, all of which can win your business great savings. The Affordable Care Act allows small businesses to cover 35 percent of the health care premiums that they pay to provide health insurance to employees. In 2014, the amount will increase to 50 percent.
3. Avoid an audit: Audit traps are indicators to the IRS that they need to investigate your business dealings further. Avoid this scenario by keeping the following details straight:
Home Office Deduction rules: Know what qualifies a home office and make sure yours abides by the IRS definition before claiming one. Not all home-based businesses qualify for this deduction.
Properly classify your employees: Independent contractors and employees are not one and the same from an IRS perspective and should not be treated as such. Non-compliance with proper classification is a red flag to the IRS that your business may be attempting to avoid payroll taxes and can result in back taxes and penalties.
Miscellaneous deductions: Be cautious with your deductions, as a large amount of itemized deductions can raise suspicion. Be sure that you have all of your paperwork to support any deductions and claim them in a clear and specific manner.
Business and personal expenses do not mix: While Turbotax encourages freelancers to combine business with pleasure and write off the expenses, the IRS does not welcome this blended method and will scrutinize individuals who combine their business and personal expenses too often. Maintain separate bank accounts for your personal life and business and maintain meticulous records to ensure that your actions do not require further attention.
Whether you have an accountant or do your business taxes yourself, knowing the proper way to file is an excellent policy for a small and growing business. By maintaining clean records and staying aware of IRS policies, you can make the most of business deductions and enjoy a penalty-free tax season.
Chelsea Terris provides online content for Meticulous Plumbing, a family owned company located in Portland, OR. Chelsea is passionate about helping small businesses thrive.
Thanks Chelsea for the tax tips!
Today, a very important post from guest blogger Silvia Brook. Silvias writes about home and cyber security for homesecurity.org. When she’s not writing, Silvia enjoys biking with her friends or cooking a new recipe from her compendium of cookbooks.
Believe it or not, cyber security is still a big issue in the tech industry. It seems as though every year a new electronic device is released by one of the major hardware developers, and yet every year consumers who buy those same devices fall prey to a host of viruses, glitches, and malware. A tablet released this year may get hit with just as many (if not more) viruses as they model that preceded it the year before.
Part of why that’s the case is because malicious applications are changing and evolving at the same rate as the new devices that they target. Developers on both sides of the equation are fighting to make the better application—those who design security apps and protection software will try to keep your information, while hackers will try just as hard to take it away.
A recent assessment of the Android OS’s newest virus protection software might explain this problem. The new smartphone OS—Android 4.2—has a built-in malware scanner for apps. A computer scientist at North Carolina State University decided to see how this new scanning software stacked up third-party virus protection apps in a test that pits them all against the latest malware targeting smartphones. The study found that the Android OS app scanner caught malware content only about 20% of the time. The third-party security apps fared much better, some of which caught malware nearly every time.
What are we supposed to do with this information? Google seems to have trouble designing a competent virus scanning application for its own line of smartphones, all of which seem at least vulnerable to potential viruses according to the above report. If that’s the case, then how can people expect to put sensitive information (emails, finances, photos, etc.) on their smartphones?
I think the most important takeaway is that cyber security should be taken seriously by people who use mobile devices on a regular basis. There really are malicious apps out there that could do some serious damage to smartphones and tablets. Design professionals such as engineers and architects who rely on their electronics for mobile work are best off defending themselves from such annoyances with third-party apps designed by professionals with a proven track record.
Below are two apps by such developers which have received nothing but glowing reviews from critics.
Avast! is a comprehensive software that addresses many key cyber security concerns. For one thing, the software will help users track their smartphones or tablets should they ever get lost or stolen. Avast! will let users locate their misplaces phones via GPS and send SMS messages to it should they want to address whoever has it. Of course the software also protects mobile devices from malware apps and websites that could be packing a nasty virus by scanning every app before it’s loaded. Avast! also allows users to build a firewall for their mobile devices should they suspect that hackers want to tamper with their data. In other words, Avast! is the whole security package for the Android, and it’s free!
F-Secure Mobile Security
F-Secure is an acclaimed security software company, protecting both home computers and mobile devices all sorts of cyber security threats. F-Secure will ensure that mobile users can browse the web safely without fear of encountering malware; the service will also scan incoming apps and data for any potential viruses that could compromise the safety of the device. Like Avast!, F-Secure also has a feature that will help users track down their mobile device should it be misplaced or stolen (and users can erase their data remotely it they suspect that someone has access to their information). F-Secure has a subscription fee, and it’s only available for Android users.
Melissa here again. What about you? Do you have a favorite cyber security app? Depending on how much you work in the Cloud, you should!
Share your recommendations in the comment section, below. Just remember, I’m a luddite, so talk in plain and simple terms!
Photo (c) Lora Williams
Paperwork, and more paperwork–Discovery in the construction lawsuit (Law & Order: Hard Hat files Part 4)
As I mentioned at the start of this series, one of the reasons that I like watching Law & Order is that things happen fast, and there is always a smoking gun paper to be found by the lawyers over a night of eating cold Chinese food. Yes, well- about that. In the construction world -not so much.
Depending on the size of the project, there may be massive amounts of paperwork involved. Think about every email, of every employee who touched the project, from initial proposal through final punch list. Add in the change order logs, pay applications (with backup), submittals, shop drawings, project correspondence, drawings, specifications, diaries, meeting minutes, daily reports, site inspections, etc—and you can begin to visualize the problems that the magnitude of documentation creates. Naturally, in the age of electronic data, digital cameras, and cloud computers, the issue of quantity is even more magnified.
Now, let’s discuss the discovery process in a construction lawsuit—that is, what the other side can ask for, what you must give, and how the process works. Then I’ll detail a few recommended practices to put your firm in the best position possible if and when it has to deal with the information overload of a construction lawsuit.
What is “discovery” in the legal world?
Discovery is the all-encompassing term for means and methods to get information necessary to prosecute or defend a lawsuit. The main written discovery consists of interrogatories and requests for production of documents. Interrogatories are written questions that you (with the help of your lawyer) must answer about the project. Requests for production, on the other hand, are requests made for documents that may, or may not, be relevant or admissible. Inevitably, in one form or another, your entire project files need will likely need to be produced to the other side.
Be aware: things that you may not consider part of your firm’s project files may still be demanded.
- Does anyone at your company keep an old-fashioned pocket calendar, filled with a mixture of both business items and personal information? It can be demanded in the discovery process.
- Does your company conduct internal post-mortem meetings to discuss ways to improve on future problems and what went wrong on this one? Discoverable.
- Does one of your employees have a personal relationship with an employee of the general contractor, such that they send good-natured barbs and sarcastic comments about the project or project personnel to one another? Yep- you guessed it—discoverable.
Each and every document, paper, back of envelope note, or personal diary entry can be demanded. Scary prospect, right?
What can you do to limit the embarrassment and lessen the pain?
To lessen the pain, be sure to adopt some best management project and personnel practices, including:
- Consistent intake methods. Every employee who brings in work should know to find, modify, and use the Firm’s contract and/or form proposals. Educate both your employees and your clients on the importance of having good, written contracts and proposals, and procure them in a uniform and systematic way. There should also be a follow up procedure in place, in case a signed contract or proposal is not obtained. One suggestion I have made previously: do not open a new client or matter number to bill against until the contract is in place.
- Management of rogue employees. Ideally, don’t let any employees only use their hard drive. If you can’t achieve that level of cooperation, at least insist that documents be copied over to the Firm’s computer system on a regular basis, and at least weekly.
- Decide on Firm-wide file management. Everyone on your staff should be filing everything the same way, whether in paper records or in email folders. As noted in my post on how to smartly handle project documents, all communications should be in one place, preferably in a chronological order. Failing that, a master chronological file could be kept for future reference. You also must decide whether and which emails need to be printed and/or saved, and institute a standard policy Firm-wide for those as well.
- Create a Problem file(s). If problems in certain areas arise, maintain a separate file and/or e-folder for all documents relating to that area. Who knows, one of those may end up being the smoking gun that makes your case.
- Use a separate Legal file, if necessary. Related to the problem file, if you get any legal help or help from your insurance company, create a new “Legal” file for legal issues, communications, and the like. Do NOT keep this file with the other project files. Ideally, all legal files should be kept in a different location/drawer/desk/office to prevent inadvertent disclosure in a lawsuit.
And, the #1 Rule relating to document best practices?
- Follow the Grandma/Newspaper rule. That is, instruct your employees to be careful in what they say in any forum– website, newsgroup, email, etc. Before sending off any questionable communications, each employee should ask himself:
How would my grandma feel if she read my message in the newspaper?
If he feels comfortable that the message wouldn’t make Grandma hold her head in shame, then and only then should he press “send”.
While you don’t need to know all the details of how to answer discovery unless and until you’ve been sued, if you follow these document best practices, you will be far ahead of the curve should you have to defend yourself in court.
Questions, comments, observations? Share in the comments below or shoot me an email.
Next in our series: Being deposed—not just for dictators! Depositions in the construction lawsuit
Photo (c) Veronica Robbins via CC.