8 Tips on Avoiding Stormy Legal Weather in Design and Construction Projects

Joe Basham recently presented on how to avoid stormy legal weather at the USI 2014 Loss Prevention & Risk Management Seminar. Here are the main takeaways:

• Get it in writing. Having a one-page contract is better than no contract!
• Choose appropriate contract forms. An AIA B101 is the most common; an AIA B104 (limited scope) is also common; an AIA B105 is for small or residential projects; and the AIA B109 is for multifamily projects. You can also develop your own terms and conditions to be attached to a Letter Proposal.
• Remember that condo projects require special attention. See the AIA’s suggested changes in the AIA B509 Supplemental Conditions for condo-specific rules.
• Make sure the contract matches reality. Will you perform site visits? If so, how often? Who is handling hiring and spending? Revise the contract so that the terms match the services you are providing, and delete those you are not.
• Beware of extra contractual duties including Fiduciary duties.
• Understand the relationship roles in all projects. For example, acting as the “Owner’s Agent” can create an agency relationship and might infer a fiduciary duty from agent to principal. “Joint Venture” or “Joint Venturers” can create a partnership relationship that may not have been intended.
• Pay attention to troublesome clauses.  Some clauses, especially those that result in contractually-assumed liability will often be uninsurable.
• Don’t forget Texas Board of Architectural Examiners’ requirements.  The TBAE has specific rules for designating drawings “not for regulatory approval, permitting, or construction” and requires a statement of jurisdiction either in the contract, in the Architect’s invoice, or prominently displayed in the Architect’s office.