Contract Language Question
Hi all, I am hoping for some advice…I have a sub-consultant agreement in which our client is asking us to agree to the following:
The Subconsultant agrees that if its work products or materials are in any way defective, the Subconsultant shall correct any such deficiency. In the event the Subconsultant fails to promptly correct the deficiency, in addition to any other remedy that may be available with respect to such failure, KCA or the Project Owner may remedy the deficiency at the Subconsultant’s expense and the Subconsultant shall pay to KCA or the Project Owner, as the case may be, the costs of remedying such deficiency together with any damages caused by such deficiency.
I requested that they strike the last sentence because, while understanding the protection they are seeking, it is too open ended as to what the costs could be. They said the must remain. It is a large project for us with a regular client.
Have any of you successfully challenged this type of statement? Can you share the language that your client found acceptable? I am thinking of countering with a request that the dollar limit not to exceed our contract fee, $65,000.
- 12 Replies
Seems like a very poorly written attempt at liquidated damages clause.
Do you have an attorney on retainer?
In my personal situation I would tell them to strike that in its entirety or find some other survey firm. There is no clear definition of what could be defective and who is the one to determine whether or not something is defective. Opinions are worthless, on both sides of the situation. If it is not spelled out completely, you cannot possibly defend against it.
I just noticed that they are not being asked in the Prime agreement between them and the county to agree to this. They are just required to correct any deficiencies. I think that will be my first approach – don’t ask us to sign something that they are not being asked to sign.
Is the contract worth enough to risk your whole business? Talk to a lawyer…and ask your E&O insurance.
And, I had a contract like that sent to me, and I lined out that portion. When they asked what was up, we discussed how they had the same contract for the guy installing plumbing as doing the surveying. I have no work products or materials that I install.
The person asked to get these signed are usually someone with no power to negotiate. It is their contract and the only one they have. These things should be included in the request for proposal. If they are not, that is a problem.
-All thoughts my own, except my typos and when I am wrong.
Some good advise so far. Check with your insurance agent and your attorney. These are busy times, is the risk really worth it to you if they go elsewhere?
What is a stake with all that writing on it if not a work product? I would ask the E&O insurance company. If the surveyor makes a mistake that costs $200,000 why should the contractor or owner pay for any amount that exceeds the surveyor’s fee.
Might want to take photos of your stakes. People have been known to transpose numbers.
Any surveyor doing construction staking should carry E&O. Bridges and Multi story buildings aren’t cheap.
My E & O insurance company offers free contract review. I would try that if available, if not I would talk to an attorney before I signed something so open ended and hard to define.
I suppose it is a work product, but the basis of the section is probably relating to installed items.
If you are thinking like a lawyer, pictures might be good or bad. I would be interesting to ask. Like anything, they can be used for and against you.
-All thoughts my own, except my typos and when I am wrong.
Add a clause something like “Due to our negligence limited to (amount of your professional liability insurance)”. Your P&L agent should help you with the exact wording. Their wording is much too general.
Anymore between the scammer locators and lying stake ripping out subs etc, I snap photos as a practice. Only takes a few seconds and the looks on the faces of the accusing liars is always a priceless reward when confronted with irrefutable truth.
I do not know what work product you are providing. You may already know all of this.
My contract says I have 24 hours to inspect any deficiency that the general contractor may allege. Do not let them bulldozer a wall or foundation and just say it was in the wrong place.
Also I track all construction documents carefully. Get a complete set of the construction document, you may find notes related to your work in odd locations. Pay attention to dates and designer stamps.
I always try get the client to sign my contract even if I sign their contract, money is the same on both. This is because I have issues and clauses specific to surveying that the client needs to agree to that may not be addressed on the client’s contract especially if it is an AIA contract.
AIA may say I get paid when the general contractor gets paid by the developer. I get paid regardless if the general contractor gets paid.
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