This tag is associated with 18 posts

Should you be concerned about consequential damage claims?

Recently, I’ve received a number of telephone calls from design firms concerned about consequential damage claims and contract language that refers to these damages. I thought it might be a good time to take a look at how this affects design professionals. Here are some of the questions I’ve received: 1. “What are consequential damages?” … Continue reading

EJCDC releases four updated engineering contracts

Last week we posted about new contracts from the AIA. This week we’re focusing on new contracts from EJCDC. Engineers should be aware that the Engineers Joint Contract Documents Committee (EJCDC) released four updated documents late in 2015. They are: E-560, Standard Form of Agreement Between Engineer and Land Surveyor E-564, Standard Form of Agreement … Continue reading

Should you waive your right to a jury trial?

Although few disputes between clients and professionals are resolved through litigation, many clients demand that the design professional contractually waive any future right to litigate before a jury. Clients often want to set up a dispute resolution process that ends with a bench trial—allowing a judge to both decide the facts and apply the law … Continue reading

Be wary of assignments and third-party beneficiaries

You sign a contract after you’ve negotiated an agreement that determines the rights and obligations of both parties. You think you know your client. But are you and your client the only two who can determine how that relationship is going to work? In recent years, there has been an increase in “other parties” having … Continue reading

New AIA design-build contracts released

As design-build keeps increasing market share in the project delivery process, more often than not architects and engineering firms are relegated to subcontractor status. Often, the contracts used reduce the amount of services provided by professionals, target professionals for all of the professional liability exposure (even though design-builders should carry professional liability insurance), and create … Continue reading

Understanding fiduciary obligations

While all contracts have a legal standard of trust, a fiduciary relationship is a higher legal level of trust because one party is vulnerable financially to the actions of the other party. A fiduciary obligation is not considered an “arms-length” transaction where each party is looking out for their own interests. Instead, a fiduciary is … Continue reading

Does your risk increase if you aren’t retained during construction?

Your client wants to save money and opts not to pay for your involvement during the construction phase of the project. Does this increase your risk? Absolutely! It increases your risk as well as your client’s. Construction documents are never 100% complete and accurate. If you’re not involved during the construction phase, you lose the … Continue reading

Why being asked to sign a “subcontract” should raise a red flag

While there is nothing inherently wrong with a design professional being referred to as a “contractor” or “subcontractor,” the use of these terms may be an indication that the contract being offered is one that is more appropriate for hiring someone to build the project, rather than retaining a design professional or surveyor. Contractors have … Continue reading

Good processes help manage client requirements

As a professional liability insurer we focus on practice-related risk management activities. Our experience generally has been that the design professionals have the technical expertise to provide the necessary solutions. Once the contract is signed, it is important to review the contract and extract all of the client requirements that are your responsibility. Coordination responsibilities, … Continue reading

If you provide services for free, are you free from liability?

Some design professionals believe that if they receive no fee for their services, their liability is limited or nonexistent. This is not true. The general rule is that a professional performing voluntary service must do so in accordance with the same care and diligence as other professionals providing similar services. The lack of a fee … Continue reading