WHAT YOU SAY (AND DON’T SAY) CAN AND WI WILL LL BE HE E HELD LD AGAINS AINST T YOU JANUARY 25, 2016 Presen ented ed by: Andrew Keetch Cantey Hanger, LLP akeetch@canteyhanger.com
WE’RE ALL GOOD HERE
WHAT’S THE WORST THAT COULD HAPPEN?
WELL, THERE’S THAT.
CONTRACT PROVISIONS SCOP OPE A design professional’s liability in Texas is generally limited by the contract tracted ed scope ope of ser ervic ices es Clear, specific and limited What you will do What you will not do With clarity Signed and final
CONTRACT PROVISIONS You and your client won’t be the only persons who read your contract.
SCOPE
SCOPE Shar aryla yland nd v. City ty of Al Alton, n, et al .: $1. 1.1 1 million llion ver erdict dict Lead Design Engineer Utility Contractor Engineering & Inspection Provide Resident Project Inspector Provide general engineering review of the work of the contractor as construction progresses to ascertain that the contractor is conforming with the design concept Project Manager
SCOPE Tas ask 3. Insure that the project complies with all local, state and federal regulations relevant to the planning and construction of a wastewater collection and transmission system.
SCOPE Holdi ding ng The unambiguous language of Task 3 expressly states C&B will assure that the project, not just the design drawings, complies with all relevant regulations. “ even though another party inspected the property ”
SCOPE
SCOPE
WATER GARDENS CASE Multiple tiple propo proposals, sals, not not all signed gned “Flowery” overly broad language In Insuf ufficient icient exclusions lusions Result? sult? High gh litiga gation tion costs ts
USING OLD FORMS “ Engineer will certify lot grades at rear lot property corners .”
SCOPE
SCOPE
SCOPE
SCOPE
BLACK + VERNOOY The court found that the architect had agreed to perform “contract administration services” during construction , to report “known deviations from the Contract Documents ” and “to endeavor to guard the [ homeowners] against defects and deficiencies in the Work.”
BLACK + VERNOOY Importantly, however, the designer had limited that scope. Specifically, the agreement provided that the Architect “shall neither have control over or charge of, nor be responsible for, the construction means, methods, techniques, sequences or procedures, or for safety precautions and programs in connection with the Work .” Instead, the agreement explained that those obligations “ are solely the Contractor’s rights and responsibilities.”
SCOPE The parties to a design contract sometimes overlook the need for carefully crafted, explicit descriptions of the design professional’s scope of work. Parties must carefully consider contract language so that they do not voluntarily undertake obligations beyond what they intend and so the owner receives the services expected.
THIRD PARTY BENEFICIARIES Additionally, the Black + Vernooy contract had an exclusion of “third party beneficiaries” An individual can be a third-party beneficiary to a contract if the contracting parties intended to secure a benefit to the third party and also entered into the contract directly for the third party’s benefit . Black + Vernooy contract specifically stated that nothing contained in the agreement would create a contractual relationship with or a cause of action in favor of a third party against either the Owner or Architect. Include lude such ch exclus lusio ions ns in your r contrac racts. ts.
DANGER – COST PROVISIONS Provisions that specifically require designer to create cost-effective design “Throughout the entire Project, A/E shall actively seek to identify and will review with Owner alternative approaches to design and construction of the Project that will result in savings to Owner.” These types of provisions create A/E risks not only to Owner but also to third parties.
EMAILS Diam amonds onds Ar Are e Fore rever, , Em Emai ail l Comes omes Close lose Wall Street eet Journal l Rep eporter er, , 2011 1
EMAILS Em Emai ail l la lasts ts lo longe ger th than an pap aper er
HARSH WORDS From: m: Smith, John Se Sent nt: Monday, July 30, 2007 4:25 PM To: Miller, Joe N. Su Subj bjec ect: t: RE: Trench Drain add on Nope. We are adding just a couple of spots (actually just one for the new end and one for the bend) and Jeff called out Northing, Easting, Station & Offset on the revised plan sheet. **** can set these 2 points off of the revised plan sheet that we issued, as I do not want any more f%&* ups on this... You can just forward him the PDF that we sent out a couple of weeks back of the revised layout.
JOKES From: m: Smith, John Sent: nt: Tuesday, July 17, 2007 5:25 PM To: o: Miller, Joe Subj bject ect: RE: TRENCH DRAIN FIELD DIRECTIVE 1 That's the dumbest trench drain in Colorado. We should name it the Smith-Miller Gorge.
JOKES From: m: Miller, Joe Sent: nt: Tuesday, July 17, 2007 6:25 PM To: o: Smith, John Subj bject ect: RE: TRENCH DRAIN FIELD DIRECTIVE 1 Bull$hit, I don't want my name associated with it... It's the Smith Gorge, next to Mt. Miller.....
OVERSTATEMENTS Hey Chief, Take a little time while in NY to shout “thank -you u Je Jesus sus ” . Thank God we are doing this connection design and not some Joe Schmoe. God is watching our back. We just discovered even en more re danger gerously usly un under derst stat ated ed conn nnecti ction on forces ces …. Also , thank God for hard working and conscientious engineers like Joe, Bob and John who are helping avoid what sur urel ely y would uld have been een anoth ther [disast saster er project] ect] or worse. Send some praises up. This s mess ssage ge was featu tured red promine minently ntly in the e opponent’s arbitr trati tion on brief. ef.
GOOD USES – DOCUMENT IMPORTANT CONVERSATIONS
GOOD USES – DOCUMENT IMPORTANT CONVERSATIONS From: Jones, Frank Sen ent: t: Friday, September 08, 2006 9:39 AM To: Kirk, James Cc: Owen Owner Subje ject ct: FW: Gas Line Change James, as we discussed, everything looks fine with the exception of where the line leaves the property on the east side. The line is approximately 125' further south than we envisioned and now gets into the lot south of the proposed roadway. I understand that your deal with [Owner] compensated them for the loss of two lots, so everything should be fine.
DOUBLE EDGED SWORD Con ontract tract Amendme endments nts Exchange of emails can form an agreement Emails can also modify an agreement
DOUBLE EDGED SWORD Pre reven ent Con ontract tract Amend endments ments by: y: Contract language which specifically excludes emails as altering contract terms Identify a particular person (unit manager?) with sole authority to modify the contract Require use of specific contract amendment form
DOUBLE EDGED SWORD Doc ocumen ument Con ontract tract cha chang nges es by y emai ail: l: Is owner increasing your scope, or is there another important change that impacts your business? Use email to carefully document the facts Request confirmation from client
EMAIL DON’TS DO O NO NOT: Use em e email il as a s a substi titut tute e for r conver ersat sation ion Crea eate e oblig igati tions ons that would ld not other erwi wise e exis ist Writ ite e somethin ething g that at you u woul uld d not not writ ite e in in a a forma rmal l mem emo o to your r empl employer er or clie ient
EMAIL DOS Do th think nk ab about t wh what at an an em emai ail l would uld lo look ok li like e bl blown wn up on th the scr creen een in front nt of a j a jury
EMAIL DOS Do be be intentional entional an and professional essional in em emai ail l co communication unications Do avoid id infor ormal mal excha change nges Do co consi nside der whether ther a a phone one ca call ll or in-per person son visit t would uld be be more e ap appropri opriat ate
QUESTIONS Andrew D. Keetch Cantey y Hanger er, , LLP LP 600 West 6th Street, Suite 300 Fort Worth, Texas 76102 Ph: 817-877-2887 EMAIL: akeetch@canteyhanger.com
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