Category Archives: Law Notes

Contract Essentials: 8 key points to consider

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eight ball

As promised, my guest post on Contract Essentials is now live over on Construction Law Musings.   Go on over and check out my post on the 8 key points you should consider in your construction contract. 

While not an exhaustive list, the 8 issues I discuss will put you on the right path to avoid litigation later over a construction project “gone wrong.”

Be sure to check out Chris’ other great construction law articles while you are there, and leave a comment to say “hi”.  See ya there!

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Photo:  behind the eight ball via Ed Schipul/Creative Commons license.

Yes? Never? Maybe? Contract Clauses for Architects & Engineers (Tue Tip)

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Make plans to attend a free webinar specifically for design professionals.  Entitled “The Bright Gray Line: “Yes”, “Never”, and “Maybe” Contract Clauses for Design Professionals (and how to find the difference)”.

The presentation will highlight challenging contract clauses and approachs to evaluating, negotiating, and managing those clauses.  Among the clauses which will be discussed are those relating to indemnity, the standard of care, code compliance, and document ownership.

The seminar is sponsored by Hall & Company and  presented by attorney David Ericksen, President of Severson & Werson.

When:                  Tuesday, June 14, 2011

Time:                   1:00 pm EDT

How:                    Click here to register

If you attend the webinar, let you know your thoughts afterwords.  I’m planning to attend as well, so we can compare notes.

The Architect Has No Clothes! (or, why subconsultant contracts matter)

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Caesar statute

Everyone is probably familiar with the story the Emperor’s New Clothes.  There, the Emperor is not wearing anything but his birthday suit, and yet everyone is afraid to tell him so.  Today’s lesson is how to avoid being the clothesless fool by making sure you are covered with appropriate contracts with your subconsultants.

Previously we have talked about the need for a written contract on your construction projects.  Usually, the focus is on the contract agreement with the Project Owner.  Just as important, however, is the contract with your subconsultant.

A recent case brought to the attention of the E&O carrier Victor O. Schinnerer demonstrates what can happen when you have a signed contract with the Project Owner, but your subconsultant contract is not yet formalized.

The architect’s subconsultant agreement had been revised by the subconsultant to include the following language: 

Subconsultant’s maximum aggregate liability under this Agreement shall not exceed $250,000.

Having been warned of the dangers of limiting the liability of a subconsultant without having a corresponding limitation in the prime agreement, the architect attempted to further negotiate with the subconsultant. The subconsultant agreed to increase their liability to $500,000 but said “I am told by our legal counsel that based on the work we are doing and the amount of our fee, $500,000 is our limit.  

Work on the project had already started, but the subconsultant was withholding their design documents until they received a signed contract.  At that point, the architect turned to his E&O carrier for advice.

His options were limited at that point, and the architect was left with weighing the risk of a claim in excess of $500,000 versus the risk of a delay claim from the Project Owner if he took time to seek out a new subconsultant.  Essentially, the architect had no clothes.

Keep this lesson in mind the next time you are negotiating with subconsultants about a planned project.  You should ensure that their contract has the same obligations that you have in your contract with the Owner.

Have you experienced a situation where you were contracted to perform, but your subconsultant refused to sign a contract with similar terms? How did you handle it?Drop me a line in the comment section.

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Photo: (c) Mary Harrsch via Flickr/Creative Commons License.

New Sustainability Rating System Set to Launch

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Design sustainability ISI logo

Are you aware of the new sustainability system being developed for infrastructure?

The non-profit Institute for Sustainable Infrastructure (ISI) is developing an infrastructure ranking tool called envISIon.   The new  ISI rating system will be founded on the “triple bottom line” concept of sustainability, which includes environmental, economic and social considerations.  It will include an option for third-party verification, and will be applicable to a wide range of infrastructure projects, from roads and bridges to energy and water systems.

As of earlier this week, Version 1.0 of the sustainable infrastructure ranking tool has been accepted by the ISI Board and, after  a sixty day technical review, will be placed on the ISI website for public comment starting in July 2011.

Following the public comment period, which will last as long as six months, envISIon will be made available as a commercial product. In the meantime, ISI and its Founding Organizations, the American Society of Civil Engineers (ASCE), the American Public Works Association (APWA) and the American Council of Engineering Companies (ACEC), will be focusing on identifying and certifying assessors.   

By the end of 2012, projects assessed as “sustainable” will be eligible for public recognition by the Institute for Sustainable Infrastructure.

Are you interested in the new sustainability system? If so, check back with ISI in July to obtain your copy of Version 1.0 to review.  If you would like to share your comments with blog readers here, just give me a shout out.

Don’t say Please– Threaten to Tow! (aka Contracts matter)

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No parking please sign No parking tow sign

 

I was wandering through downtown Wilmington, North Carolina the other week after a trial was pushed off of the court docket.  Not two feet away from each other I saw these two signs.

Ask yourself—if you were looking for an (illegal) parking spot to run a quick errand—which spot would you park in?  The one with the sign that nicely asks you not to park there, or the one with the sign that says they will tow you if you do?  I think we can all agree that in this case, being nice does not help that parking spot’s owner.  You know the other guy means business, so you take him seriously. 

What does all this have to do with architecture or engineering? 

It is a stark reminder that words can be powerful.  Your contract language can make the difference between getting what you want (the empty parking spot) versus having to live with something you don’t (someone in your space).  It can mean the difference between the dispute venue you favor or the right to additional compensation.

When it comes to your livelihood, don’t chance it to be nice.  Gentlemen’s agreements and saying “please” just don’t cut it any more.

Which parking spot would you use? Do I even have to ask?  Saying please is all well and good, but stating your rights upfront will get you farther.  Sign up for email updates directly to your inbox, so you never miss a post here at Construction Law NC!

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Photos in this post: Creative Commons License