Tag Archives: risk avoidance

Free Webinar: Underground Construction Claims (and what to do about them!) (Tue Tip)

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underground sign

The good folks at Hall & Company have another upcoming free webinar, entitled “Underground Construction Claims: Avoidance, Mitigation and Management”

The webinar is scheduled for August 9, 2011 at 1:00 ET.  Click here to register.

The event will feature speaker Dr. Conrad W. Felice, Ph.D., P.E., P.Eng., D. GE. of C. W. Felice LLC, and he will speak on  
• Understanding risk in underground projects
• Practices for managing risk and avoiding and mitigating claims
• Future and direction of the use of underground space  

Obviously, interested engineers will want to attend.  The program notes that architects may also want to attend, as the management of underground risks is one of the highest liability areas in the design profession, often entails working with latent defects similar to those in renovation and preservation work.  Many of risk avoidance mechanisms that will be discussed can be used in other design settings. 

Will you attend?  I’m signed up to attend, baring a court hearing or somesuch.  Let’s compare notes!

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Photo: (c) freefoto.com.

Contracts are the Key to a Great Project (Guest Post)

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 Today I have the pleasure of another guest post.  Christopher G. Hill is lawyer and owner of the Richmond, VA firm, The Law Office of Christopher G. Hill, PC, a LEED AP.  Chris has been nominated and elected by his peers to Virginia’s Legal Elite in the Construction Law category on multiple occasions. He specializes in mechanic’s liens, contract review and consulting, occupational safety issues (VOSH and OSHA), and risk management for construction professionals.  Chris authors the Construction Law Musings blog where he discusses legal and policy issues relevant to construction professionals. 

Chris Hill

Chris Hill

First of all, thanks to Melissa for the great opportunity to post here at her blog.  She has been kind enough to post on two occasions (here and here) regarding the need for specificity and proper drafting in construction contracts.

Aside from the “back end” implications of a poorly drafted construction contract, there are other benefits to a well drafted set of construction documents.  The overarching reason for a well drafted contract is the setting of expectations.  Because the “contract is king” in most states, these initial expectations are key.

Without further ado, here are my thoughts on the proper setting of expectations.

1.            Make sure that the scope of work is well outlined.  Mere reference to “plans and specifications” is not enough.  You need to have at least a date for each of these or else a specific list of items to be performed and the specific scope of those items.

2.            Be sure that your dispute resolution procedures are well outlined.  This needs to be very specific and set forth any claims process.  While I am not a huge fan of mandatory arbitration, this is one area where you can tailor the dispute resolution to your needs.

3.            Make sure that the change order process is well defined and followed.  I cannot count the number of disputes that I have been involved in that come down to this process.

4.            While it sounds simple, define what “finished” means.  Does it mean acceptance by the architect? The Owner? The General Contractor?  What does “acceptance” mean?  All of these seem easy to think of answers to until the project is “finished” in your mind and not finished in the owner/general contractors mind.

5.            Attorney Fees, Attorney Fees, Attorney Fees! Without this provision (or a statute that allows for the recovery of these fees) most states’ courts will not allow you to recover the fees expended in resolving a contract dispute.

6.            Most importantly, read the contract and all of those pesky documents that are referred to by that contract.  Without a thorough understanding of the provisions of these other documents, you cannot know your expectations entering into a construction project.

In a world where one word in a contract makes all the difference, setting these expectations early can not only help you out with a dispute but can go a long way toward avoiding the disputes and (heaven forbid) do so without the intervention of your local construction lawyer.

 Chris and I welcome your thoughts and comments.  Be sure to stop by Chris’  blog and say “hi” too!

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.

Sneak Peek on Contract Essentials Plus Web Forum Tip

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construction of a messy room

Sneak Peek:  Tomorrow I have the honor of guest writing on Chris Hill’s Construction Law Musings blog. I previously wrote a post on Chris’ blog back in August 2010.  I must not have have made too much of a mess over there, as he’s signed up for more.

My topic will be about contract essentials, so you won’t want to miss it.  I’ll post a link to the article here once it goes live.    Here’s the link.

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 Photo: from Moon, Stars & Paper via Creative Commons license.

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.