Author Archives: Melissa Dewey Brumback

Learn to Negotiate Construction Contracts with no “Deal Breakers” (Tue Tip)

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As I and others have said on this blog many times, contracts are extremely important in the construction world.  Deciding what contract terms you want, deal breakers, and which terms you can live with, is more of an art than a science.  Two upcoming FREE webinars deal with contract issues for design professionals:

First up, Traveler’s Insurance Company has a webinar entitled “Helping Design Professionals Build Better Contracts.”  The seminar presenters will discuss:

  • How to identify risk management issues associated with contracts
  • What terms are deal breakers
  • Which techniques to apply to better negotiate fair agreements
  • Why it’s important to implement contract risk management practices 

The webinar takes place Wednesday, October 19th, at 11:30 a.m. ET.  Although the webinar is free, registration is required.  To register, click here.  

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Next, the folks at Hall & Company are hosting a webinar entitled “Contract Negotiations for A/E Professionals,” and will cover:

  • the importance of the overall A/E contract; 
  • how contracts can impact your indemnity obligations;
  • how your contract can affect the standard of care and increase risk;
  • how your scope of work and mundane contract clauses can impact the A/E bottom line. signing contract
Their webinar takes place Tuesday, October 25, 2011 at 1:00 pm ET.Again, registration is required for their free seminar.  Register here.
 

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Photo: (c) Frank McMains via CC

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.

Get your PDHs & HSW Units while meeting me! (Tue Tip)

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Do you need PDHs, Contact Hours, or HSW Learning Units?  What about Continuing Education hours or CLE credits?

If so, make plans to attend the Law of Construction Defects & Failures seminar, presented by Halfmoon Seminars, on October 20, 2011 in Chapel Hill, NC. 

I’ll be one of the Faculty presenters, speaking on “Strategies for Reducing Defects & Failures.”

microphone

Here’s the full agenda.

The all-day course qualifies for credits as follows:

Architects: 6.0 Contact Hours (HSW)
AIA: 6.0 HSW Learning Units
Engineers: 6.0 PDHs
Contractors: 6.0 Continuing Education Hours
North Carolina Attorneys: 6.0 CLE Hours (No ethics or SA)

Hope to see you there!  If you do register, drop me an email and let me know you are coming so I can put a face with a name!

Photo credit: Scott Hodge via Creative Commons license.

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.