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Copyright Protection under ConsensusDOCS and AIA–which is better? (Law note)

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Large copyright sign made of jigsaw puzzle piecesWhich standard form contract provides “better” protection for copyright issues- ConsensusDOCS or AIA? The ever-so-hepful “it depends” is, as usual, the answer.

Are you the owner looking to use the plans you paid for even after you terminate an architect, or are you the architect looking to protect your work product?  If you are the owner, you will probably prefer ConsensusDOCS.  If you are the architect, your best bet is still the AIA documents.

Consider the following:

Under ConsensusDOCS 240,

  • the Owner receives ownership (except copyrights) of all documents, drawings, and data prepared by the architect or consultants for the Project, upon final payment for all sums due in the event of termination (Article 10.1).
  • the Owner has the option of being granted copyright ownership, contingent on making all payments required, including a stated copyright fee. (Article 10.1.1).
  • whether termination is for convenience or for cause by either party, the Owner can use the documents to complete the project, provided he pays all sums due (Article 10.1.2).
  • the Owner agrees to indemnify the architect for post-construction use of documents.  (Article 10.1.3).

Under AIA B101,

  • the architect and consultants are the owners of their respective instruments of service, retaining all rights, including copyrights (Article 7.2).
  • the Owner is granted a non-exclusive license in the instruments of service, soley for use in constructing, using, maintaining, altering and adding to the Project, provided the owner substantially performs, inclduing making prompt payments of all sums due (Article 7.3).
  • if the Owner does not pay all sums due, if the architect terminates the contract for cause, or if the Owner does not pay an extra fee after a termination for convenience, the Owner’s non-exclusive license terminates. (Article 7.3; Article 11.9).
  • the Owner must indemnify the architect against third party claims arising from the owner’s unauthorized use of documents. (Article 7.3.1).
  • if the Owner properly terminates the architect for cause, there is no indemnity against third party claims and no release of the architect from the owner’s claims arising from the use of the docuemnts (Article 7.3.1).

Do you have experience in managing copyright issues under either contract?  Which do you prefer?  Leave your thoughts in the comments section, below.

What if you have a non-standard contract?  Read about that at:  Copyright issues in non-standard construction contracts, including letter proposals.

 Photo (c) Horia Varlan via Creative Commons license.

Is your Contractor’s Surety Company financially strong? (Guest Post)

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Today we have a guest post from JW Surety on how to find bonding companies, check their solvency, and see how each surety company compares to one another.  As the design professional of record, the architect is often faced with reviewing the bid applications and paperwork, including bonding information.  With the increasing number of failing companies, including insurance companies, over the past few years, checking the bonding company’s financials makes good sense.

Much is unknown about surety bonds and, more importantly, what bond types are required in order to start your shop. The following three steps can help customers [Ed. note: or architects conducting due diligence] determine the best surety company for their bonding needs:

hand signing surety bond application

1)     Are they licensed?

As required by law, surety organizations must be licensed in order to operate as per their state guidelines. These licensing requirements are strict and involve background investigations into each company’s history. The benefit for customers is knowing that those surety companies which are licensed to operate are not only qualified, but they are ethically secure to practice. Those beginning the surety search can look through the U.S. Department of Treasury’s list of licensed companies to get a better understanding of which companies to reach out to.

2)     How are they classified?

Customers should get a firm understanding of how each surety company ranks in comparison to each other. To help make this process more manageable, consumer protection organizations do their own investigation and analysis and publicize their findings for others. Although there are several of these agencies, one of the most respected is Dun & Bradstreet, who offer their findings for a nominal fee. Customers can search through thousands of surety companies, gauge how long they’ve been operating, and assess which agencies they believe are most reputable for their bond needs.

3)     Is a surety broker a more viable option?

Brokers are similar to surety bond companies in that they are able to produce and distribute bonds. Typically, these individuals have established relationships with several high-level surety bond organizations, and can help advise customers on what types of bonds to secure, and how much it will cost them up front and annually. Often times individuals prefer the one-on-one relationship brokers offer. Customers interested in finding a reputable surety bond broker should look through the directory of the National Association of Surety Bond Producers.

Thanks JW Surety, for your guest post.  Welcome to my new subscribers this week!  Please contact me with any of your thoughts or concerns regarding construction law, and I’ll address them in upcoming posts.

Photo (c) JW Surety

Why words matter (aka Shakespeare for Architects & Engineers) (Law note)

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“What’s in a name? That which we call a rose
By any other name would smell as sweet.”

Romeo and Juliet (II, ii, 1-2)

Romeo & Juliet balcony

Words do matter.  In the context of construction law, there are some words that you should avoid at all costs.  Top of the list is the word inspect.  If your contract gives you the responsibility of inspecting the contractor’s work, stop.  Do not pass go.  Do not collect $200.  Inspection (at least to some owners and juries) connotes that a thorough review will be provided, and that every fault will be identified.  Instead of Inspection, a better word for your construction contract is Observe.  You should not be providing periodic inspection.  Instead, provide periodic observation.

Am I nit-picking? Perhaps.  But inspect implies a much stronger duty than observe.  (Just my personal observation!).  There are other words you should also avoid in construction contracts.

Instead of certify, try review

Instead of approving shop drawings, try No exceptions noted 

Instead of best (or highest) standards, try meet the professional standard of care

Instead of immediately, try without undue delay

This list is just a sample.  There are many other words to be leery of, including guarantee, warrant, insure, and ensure. 

In doubt about whether your contract contains dangerous words that may expose you to extra legal liability?  Write your contract as if your attorney is looking over your shoulder.  Keep in mind, both Romeo and Juliet learned the hard way that words do indeed matter.

Welcome to my new readers.  If you have not already done so, sign up for email delivery so you never miss a post from Construction Law in NC.  I welcome your comments & thoughts.

Photo:  (c) freefoto.com.

 

Free money for design professionals (and other lucky folks)? (Tue Tip)

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free money bridge sign

Okay, I’m technically cheating.  Today’s Tip is not specific to architects or engineers.  However, it is something that might put a little dough in your pocket that you didn’t even know you had coming to you.

Have you heard about the websites that can help you locate money due to you from a state government’s unclaimed property account?  This is money that is due to folks from old utility accounts, cell phone accounts, and the like.  If the company cannot locate the person they owe the refund to, they escheat it to the state.

Spend 5 minutes the next time you are internet surfing to see if you are owed any money.  Start with MissingMoney and plug in your name (and likely misspellings of your name).  You will note that many states (including North Carolina) are not yet listed with that national site; however, the MissingMoney site will give you the quick link to those states’ websites for “lost money”.  (North Carolina’s website for unclaimed money is here).

In playing around with these sites the other day, I found money owed to my Uncle, a cousin, and a college roommate.  While I didn’t find any money due to *me*, it was still a worthwhile exercise.  Everyone can use “free money” when they happen upon it, right?

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Photo (c) jazza2 via Creative Commons license.

Irene Damages Main Roadway on Outer Banks (pictures & data)

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[This article was originally published on September 1, 2011]

Hurricane Irene brought untold damage to much of the Eastern Seaboard over the weekend.

Our own Outer Banks, often a magnet for Hurricanes and nicknamed “Hurricane Harbor”, was hit once again.  Irene opened up two new (temporarily, at least) inlets and will require significant repairs to NC Route 12, the main transportation route on the Outer Banks.  Transportation engineers will be working on Rte 12 for some time.

A picture of one of the new inlets is below:

Hurricane Irene road damage on outer banks of NC

This picture comes from Western Carolina University’s Program for the Study of Developed Shorelines.  You can find much more information about the damages on various portions of the Outer Banks, and see other interesting pictures, by downloading the full report here: Update on Outer Banks after Irene.