Tag Archives: risk avoidance

Belts, suspenders, and breakfast bars: construction contract tips (law note)

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SuspendersBelts, suspenders, and breakfast bars.  Want to know what they have in common, or how they relate to your construction contracts?

Take a gander over to Construction Law Musings this morning, where I am guest-posting on the importance of being clear– very clear– in your construction contracts.

Key takeaways?

  •  clear up possible points of confusion
  •  don’t “wing it” with old contracts
  •  read your entire contract during the negotiation phase

Read the entire post at this link:  Belt & Suspenders: the preferred style for your Construction Contract.

See you there!

 

 

 

Give Way or Yield? The jurisdiction of your contract does matter! (Law note)

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give way signHave you ever been to England?  If so, you’ve likely seen their version of our “Yield” sign– the “Give Way” sign.  It is a bit jarring to those from this side of the “big pond”.

Similarly, contracts can be worded differently– and, interpreted differently– depending on the state that you are in.  This is why it is always a good idea to have your contract or proposal vetted for the state(s) where you provide professional services.

When confronted with a “give way” sign you have the general idea of yielding, but might be confused by that whole “left side of the road” thing in some countries, where if you are turning right, you must give way to all vehicles coming towards you including those turning left.  Likewise, you might have a good understanding of your construction contract in one state, but not how it would be interpreted in another state.

As just one of many examples– the statute of repose can vary widely.  In North Carolina, it is 6 years.  In South Carolina, it is 10 years.   The jurisdiction (state) that you are in does matter– sometimes critically so.

Have you ever found yourself in trouble because of a difference of state laws from what you are most familiar with?  Share in the comments section below.

 

 

Learn from SONY: Don’t use trash talk in your construction project emails!

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Bears hibernating

A hibernating bear and her cubs

Lessons in construction administration come from everywhere — including the SONY scandal.

In case you are a bear hibernating in a cave (in which case, go back to sleep!), you’ve heard about the SONY hacking that was apparently, but not definitively, done by North Korea due to their displeasure over the movie The Interview.  And, you may have found it amusing to read of the inner bickering at SONY, at lease until the threat of a national incident and the (at least temporary) yanking of the movie from its planned Christmas release.

Lost in all of the discussion about taste, censorship, security, and First Amendment rights, however, was a simple lesson for each of us.  Never put anything in writing that you wouldn’t want to see on the TMZ report, the Wall Street Journal, or the New York Times.  For example, don’t call one of the biggest stars in your studio (Angelina Jolie) a “minimally talented spoiled brat.”

I’ve written about this before, but this is a fine time to remind you that someday, someone will read your emails.  And that someone will not be privy to your internal jokes, quirky sense of humor, or understand that you just had a bad day.  If you have to have those awkward conversations– have them in person, or at least on the phone.  Don’t play around with written communications.  Every email, text, tweet, Facebook post, letter, note, or diary entry can be discoverable in a lawsuit.

We’ve all done it.  Sent inappropriate emails.  Vents.  Laments.  Stop.  Endeavor to be boring rather than funny in all of your online accounts.  You may be only laughing on the inside, but you’ll still have a job, respect, and knowledge that there are no hidden documents waiting to shame you at the stroke of a hacker’s keyboard.  And, tell your employees to do the same.

Do you have an example of getting an inadvertent email or text?  Something that could have been embarrassing if it leaked beyond your firm?  Share in the comments below.

Photo courtesy Wikimedia.

 

 

 

 

 

 

Don’t Let Construction Problems Become Construction Disputes (guest post)

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Chris HillTo start our week off right, today we have another important article from guest blogger Christopher G. Hill, LEED AP.  Chris is a Virginia Supreme Court certified mediator, construction lawyer and owner of the Richmond, VA firm, The Law Office of Christopher G. Hill, PC.  He 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.  [His blog was also one of the first construction law blogs I found and followed, even if he is a Duke alum!]  Take it away, Chris!

First and foremost, thanks to Melissa for inviting me back to post here at her great blog.  She continues to invite me back despite my being a Blue Devil (and I try not to hold her Tar Heel status against her).

So much of discussion relating to construction law and construction lawyers centers on the litigation of disputes.  This discussion comes in many forms from avoidance of such litigation through the early intervention of good counsel prior to getting into a project to what sort of resolution mechanism to use. Another branch of this discussion is essentially the right way to pursue your claim (or as some may read it start the dispute ball rolling).  Sometimes a payment bond claim is the best method while others a straight up contractual suit is the best way to go.

Of course, all of this discussion presumes that there will be disputes.  While I agree to some degree that in the Murphy’s Law riddled world of commercial construction, problems will arise.  These problems need not rise to the level of a dispute that requires outside (read court or arbitrator) intervention.  A few tips that are easy to write, but admittedly hard to practice at times can hopefully keep problems from blossoming into disputes.  I’ve listed a three big ones here:

  1. Use “in house counsel.” Yes, I know that most of you engineers, architects, commercial general contractors and subcontractors out there aren’t big enough to either want or need a full time attorney on the payroll. What I mean by this is that when problems occur (or preferably before doing so), give your friendly local construction lawyer a call. As I learned from my dad, an ounce of prevention and all that. That 10 minute phone call may help avoid many hours of time and bills from your attorney later down the road.
  2. Build Relationships. This seems like more of a marketing tip, but it is also a risk prevention strategy. I have seen many a potential dispute get resolved with minimal or no intervention on my part simply because the general and subcontractor had a good working relationship. With the right team oriented approach and communication many a jobsite problem can be resolved in the pre-dispute stage. If the two companies don’t know each other, this is less likely to occur.
  3. Communicate Up Front. I know, I beat this drum a lot. Why? Because it’s a big deal. Setting the right expectations through proper communication and negotiation on the front end will set the terms of the “deal” and give all involved a guide for how to deal with problems as they occur.

Following these three tips will help you avoid construction disputes and the hefty attorney fees that come with the prosecution of those disputes.

Can you think of other tips that we can add to the list?  Let Melissa and me know.

Thanks Chris! As always, you hit the nail on the head (pun intended). For those that don’t already follow Chris’ blog (and why don’t you???), do check it out and show him some blog love. You’ll learn a lot, and be glad you did.

Is your design professional construction contract too friendly? (law note)

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not friendlyMy husband often travels the back roads between Chapel Hill and Fuquay Varina to visit friends.  En route (a circuitous route that goes past Sharon Harris Nuclear Power Plant, among other places), he passes by the “Friendly Grocery”.  For those who haven’t had the pleasure, here is a photo of the side of the building in all its glory.

In case you cannot read the list of forbidden activities, I’m re-printed them here (complete with spelling error):

not friendly sign

I’m not sure which is the “friendly” part of that sign.  In fact, the sign seems to be the antithesis of friendly.

What does this have to do with your construction contracts?  Sometimes, in an effort to please the client and/or secure the project, architects and engineers have the habit of being too friendly in their contract language.  That is, you make promises or proposals that may promise too much of a good thing for the client.  This can cause big problems.  Bigger than being towed away from a rural grocery store in the middle of nowhere.  You could be putting your insurance coverage at risk.

Have you ever promised to use “best efforts” in your design or plans?  Promised to design to a specific LEED standard?  Guaranteed 100% satisfaction?  You might be putting your errors & omission coverage at issue.  By warrantying or guaranteeing something, you are assuming a level of liability well beyond the standard of care required by law.  By law, you only need to conform to the standard of care, and your insurance will only provide coverage up to that standard of care.  In other words, if you make guarantees or promise “best efforts,” you are contracting to something that will *not* be insured.  If something goes wrong, you will be without the benefit of your professional liability coverage.

Instead, make sure that your contracts, and proposals, are not too friendly to the client.  Sure, agree to work in accordance with the standard of care of professional architects/engineers.   But don’t make guarantees, or promise “best” efforts.  In fact, you might want to educate your client on why you cannot make such guarantees, and why anyone who does (i.e., your competition) is putting their insurance coverage at risk.  Owners want and need you to stay within the bounds of your coverage.  You need to, also.  Maybe the owner of the Friendly Grocery was on to something there.

Your turn.  Have you ever used language that jeopardized your insurance protection?  Uncertain if you have?  Drop me a line and we can talk.

Photo (c) Melissa Brumback  Creative Commons License