How your disgruntled client can turn into your very own car crash! (and how to avoid it) (law tips)

Over the summer, I was involved in a car crash.  It was *not* my fault– heck, I wasn’t even driving but riding shotgun.  But it wasn’t my husband’s fault either.  A guy pulling out of a parking lot was watching the traffic coming up the road, but failed to see our car sitting in the same intersection waiting to turn into the same parking lot.  He ran right into us.  Here was the damage:

car damage

 

It may not look like much, but the panels were so damaged it cost almost $9k in damages, over a month of car rental fees, and a LOT of aggravation on our part.  The guy who hit us was very nice, apologized, and was concerned if we were injured.  His insurance company ultimately paid for all of the damage.  However– it wasn’t he who suddenly got a new part time job– that was me.  I had to spend lots of time with police, insurance representatives, auto body mechanics, rental car places, you name it.  If you’ve ever been in an accident, you know the headache involved.  In fact, I have had 2 other accidents over the years (again, neither of which were my fault– I think I’m just a beacon for bad drivers?).  One of those accidents was a 4 car accident– a driver hit my car, pushing it into the car ahead, which went into the car ahead of that.  In that accident, my car was actually totaled.  Fun times!

How is this relevant to your life as an architect or engineer?  If you stay in the game (that is, the design field) long enough, chances are, you will, at some point, end up dealing with disgruntled clients.  One of those clients may even file a lawsuit against you.  Or, for that matter, you may end up getting sued by another party involved in your construction projects– one that you don’t even have a contract with.

If that happens, you too will have a new part-time job– working on your defense.  Think meetings with your attorneys, calls with your insurance adjuster, unbilled time sitting for deposition, searches through all of your project emails and files, and the potential for a long jury trial (again, unbillable time for you).  Sounds fun, doesn’t it?  Maybe even makes you want to scream with the unfairness of it all.

The thing is, while there are certain things you can do to minimize your risks of being sued and your chances of prevailing if you are sued, even if you win, you’ve lost in time and opportunities.  In a fair system, you wouldn’t face this for unfair or frivolous claims.  In a fair system, I wouldn’t have to spend hours dealing with the fall out of an accident I didn’t cause.  But sometimes, stuff happens.

Just like there are ways of minimizing your risk of car accidents (turn signals, watching for inattentive drivers) and reducing damage when they occur (using seat belts, driving slower), there are also ways to minimize your risk of a lawsuit and reducing your damage when they do occur.

Some ideas:

  1. Have a written contract for every project, every time
  2. Get that contract reviewed by your insurance carrier and lawyer
  3. Be sure to specify what you will, and will not be doing in your scope of work  (being redundant is good here!)
  4. Establish clear payment terms, and expectations about fees for additional services, up front.
  5. Have good document management systems in place, which you’ll need for if/when litigation does occur
  6. Be aware of warning signs that there may be a lawsuit in your future; and
  7. If you do get sued, don’t panic, but take some steps to help your case get off on the right foot

But remember, when all is said and done:  you place your bets and roll the wheel.  Sometimes, your number comes up.  While these tips cannot prevent being sued by a disgruntled client, they can lessen the risk and impact.  And that is *almost* as good as getting your car fixed, returning the rental to the shop, and quitting your new part time job!

Have you had to suffer through an unfair lawsuit from a disgruntled client or third party?  Tips you wish you had known earlier?  Concerns about your own contracts?  Share in the comments below or drop me an email at mbrumback@rl-law.com.

Photo: Creative Commons License

Avoid Disaster: Have Your Contracts Reviewed (guest post)

Today, we have a guest post by on of my comrades in crime (that is, a fellow construction law blogger), Chris Hill.  Here’s his official bio:  Christopher G. Hill, LEED AP is Virginia Supreme Court certified mediator, construction lawyer and owner of the Richmond, VA firm, The Law Office of Christopher G. Hill, PC.  Chris authors the Construction Law Musings blog where he discusses legal and policy issues relevant to construction professionals.  His practice concentrates on mechanic’s liens, contract review and consulting, occupational safety issues (VOSH and OSHA), and risk management for construction professionals.

———————————————————————————————————————–

Chris Hill, AttorneyFirst of all, thanks again to Melissa for letting me post at her fine blog.  She’s one of the more knowledgeable and cool Tarheels I know (and this is coming from a Blue Devil!).  Now, on with the show.

As those who read my Construction Law Musings blog on a regular basis know, I am a huge proponent of getting a knowledgeable attorney involved in your construction contracting business early on.  While we construction lawyers are generally seen as last resorts, we can actually be helpful and (dare I even say it?) save you money.  How, you may ask, can paying a construction lawyer that ostensibly is only there when you have a claim actually save you money?  Well, as you may have gathered by the title of this guest post, I’m going to tell you.

Two words:  Disaster avoidance.

Litigation is a money, time and emotion draining process for those that don’t have the particular odd propensity of the litigator that makes them actually enjoy trials.  Litigation takes money from the bottom line because no business this side of a cigarette or pharmaceutical company can do business planning to sue or be sued.  For that reason, litigation cannot be treated as overhead and even in the case where you could get a judgment for any fees that you may spend, you are still out the cash and even then may never recover on the judgment.  A contractor cannot make money through litigation (at least in my experience).

Even in the case where you are “right” and “should never lose” there is risk in court.  Juries, arbitrators and judges sometimes go the other way.  These are humans.  They are fallible and in many ways unpredictable.  Litigation is (and should be) a last resort.

The best way to avoid this result is a good contract and good advice from those of us who have seen the results of litigation on numerous occasions and that therefore know how to avoid it.  Everything from the proper claim and notice procedures to a well scoped project are necessities up front.  Aside from the “common sense” issues that you as a business person will see coming, an attorney can see the picky “traps” that are there and are counterintuitive.  For instance, Virginia, unlike many other states, allows the waiver of mechanic’s lien rights in a contract.  You wouldn’t want to miss this thinking that you “knew” that such a clause was unenforceable.  [Editor’s Note: By comparison, in NC, such a waiver in advance is against public policy].

Much like your bi-annual visits to the dentist (yes, I compared my profession to one that is almost as popular), the relatively small expense of early review of your contracts and business practices can go a long way toward avoiding surprises and disastrous expenses later.  In short, and as you learned in kindergarten, doing it right the first time is always easier than fixing the problem later.

My final advice:  Add a lawyer to your team of advisers, you’ll be glad you did.

———————————————————————————————————————–

Thanks, Chris, for another fine post.  And I completely agree:  the number of hours spent on claims will vastly supersede the small cost for most companies/Firms to properly prepare and vet their contracts and proposalsChris and I welcome your comments, questions, and thoughts!

 

Understanding & Modifying Key Construction Contract Terms

As I mentioned, I  was one of three amigos who spoke on a Construction Contract webinar last week.  We had a good turn out and lots of very astute questions during the Q&A portion.  While you will miss all of my witty insightful helpful commentary, you can check out the slides for my portion, on understanding and modifying key terms, here:

Drafting Construction Contracts

My comrades’ presentations can be found by visiting Chris’s blog (for payment provision issues) and Craig’s blog (for damages and dispute resolution issues).  Happy viewing!

Got a Job Offer? Now What? Engineers and Architects: Think Before You Sign ! (guest post)

Today, we have a guest post by Hayley Spencer, a freelance writer and attorney, on behalf of Martindale.com. She enjoys writing articles on contract law, law careers, and employment agreements.

Got a Job Offer? Now What?  Engineers and Architects: Think Before You Sign!

Architects & Engineers are not immune from employment agreements.  Those who go to work for a larger companies, especially, may be required to sign a contract of employment.  This form may be standard and identical for each employee, or each employee may have a contract with the employer that applies solely to him or her. Alternatively, there may simply be an oral contract about the type of work the employee will perform, benefits to be provided, and bonuses which are applicable.  If there is no oral or written form of agreement, the behavior of the professional parties involved can be identified as an implied employment contract. Some relationships may be that of a traditional employer and employee, while others may be set up as some type of an independent contract. Regardless of the specific details, it is always wise to have a qualified attorney review all such agreements before you sign them.

shaking hands on employment agreement
Why Do Engineers and Architects Need Employment Agreements?
Barring terms and policies that are actually illegal, anything and everything can be integrated into these types of agreement. Nonetheless, for engineers and architects, the law provides several safeguards regarding what can and cannot be negotiated upon as terms of employment. Furthermore, due to the gradual decrease in unemployment rates, employers have had to propose contracts for transitory workers loaded with language to safeguard them as much as possible. The sheer volume of potential variation, therefore, makes written contracts wise.

What Should You Consider Before Signing an Employment Agreement?
There are several particularly important regulations and policies of which you should be aware before signing any type of employment agreement.

First, is there a probationary period? Professionals do not just utilize probationary periods to analyze their new recruit’s fit. Setting a probationary time frame enables them to dismiss for purposes that would otherwise be inconsistent or inadequate.

Second, are oral offerings included in the contract? As with any relationship, optimistic forecasts of the future are common at the beginning of a work relationship. Nonetheless, your attorney can guide you through a list of solutions for engineers, architects and other specialists if employers’ pre-employment expressions were created negligently or if promises did not materialize.

What Common Aspects of an Employment Agreement are Generally Acceptable?
A professional confidentiality agreement is a part of a contract wherein the engineer or architect promises never to share any data regarding the details of how the employer’s enterprise is carried out, or of the employer’s confidential procedures, plans, solutions, information or equipment.

Similarly, a non-competition clause generally states that for a specified amount of time following the date the engineer or architect stops working as a part of the company, that person will not become employed by a competing firm or a firm focusing on an identical form of business.

An ownership of inventions clause applies to specialists who create or invent something as part of their work. By agreeing to this type of clause, the worker agrees that anything he or she creates while employed, or during a specified period of time following the contract termination, is treated as the creation or invention of the company and not that of the engineer or architect.

A no extra compensation clause specifies that if the worker becomes some type of executive or manager for the firm, he or she will not be subjected to extra compensation for accomplishing these duties.

Conclusion

 Of course, this brief guide will be insufficient to help you navigate all the potential issues involved with these types of employment contracts. Their details can vary widely, so seek out a professional for assistance.

Thank you, Hayley, for your post.   North Carolina employees should be aware that unless there is a specific employment contract, you are generally an “at will” employee.  That means that you can be fired for any reason or no reason whatsoever, so long as it is not due to your being a member of a protected class (race, religion, sex, etc.).  Also, covenants not to compete must be deemed reasonable to be enforceable.

 Any questions for Hayley?  Please post, below.  And, if you haven’t already, please sign up to get email delivery of all posts directly to your mailbox, by going to the sign up form.  At the same time, you’ll get the download link to my free white paper on the 7 Critical Mistakes that Design Professionals Make during Contract Negotiation and Execution that Sabotage their Projects & Invite Litigation.

Photo: (c) Aidan Jones via Creative Commons license.

Construction Estimating: the Odd Numbers game

As a design professional, you have likely seen your share of construction estimates.  You may be in charge of evaluating bid proposals and/or in reviewing projects for value engineering possibilities.  Of course, you are almost certainly involved in submitting your own proposal estimates for architectural or engineering services on a project.

I saw a recent blog discussion on construction estimates, and how owners view them.  In the situation discussed, a contractor was losing business because his estimates were in nice round numbers, creating the suspicion in the owner’s mind that the numbers were not carefully put together.

One commentator, a civil engineer, said:

As a Professional Civil Engineer and owner’s representative, I am very leery of proposals received that are round (up or down) unless I’ve done business with this group before and am aware of it. I agree with the other comments that it appears as if the bidder has not put much effort into their proposal.

What do you think? Are you leery of an estimate that is a nice round number? Do you round your own estimates? Does an estimate of $21,975 look more legitimate than an estimate of $22,000?  Share your thoughts, and your practice, below.

 

tall building

————————

Photo credit: Håkan Dahlström.

Copyright © All Rights Reserved · Green Hope Theme by Sivan & schiy · Proudly powered by WordPress