Designer Liability Lorman Education Services June 25, 2003

Transcription

1 Designer Liability Lorman Education Services June 25, 2003 Brian W. Erikson Quilling, Selander, Cummiskey & Lownds, P.C Bryan Street, Suite 1800 Dallas, Texas

2 Traditional Organizational Chart Owner Designer General Contractor Trade Contractor Trade Contractor Trade Contractor Etc. 2

3 Construction Manager Chart Construction Manager Owner Designer General Contractor Trade Contractor Trade Contractor Trade Contractor Etc. 3

4 Designer Liability Contract Tort Negligence Professional negligence Vicarious 4

5 Designer Liability Architect/Engineer Liability Liability to Owner Liability to Contractor Contractor not third party beneficiary Professional negligence Texas law in flux 5

6 Designer Liability Architect/Engineer Liability Owner or contractor must show causal connection between A/E negligence and specific damages 6

7 Contract Liability Economic Loss Rule Liability for breach of contract damages No negligence claims by party with privity 7

8 Economic Loss Rule Does not apply to physical property damage or personal injury 8

9 Contract Issues Contract Formation Capacity & consideration Validity of contract 9

10 Contract Issues Intent of the Parties Determined from agreement as a whole Contemporaneous construction by the parties 10

11 Contract Issues Rules of Construction Ambiguity Construing against drafting party Boiler plate provisions Lose out to negotiated provisions All provisions to have some meaning Avoidance of illusory promises 11

12 Contract Issues Parol Evidence Rule Excludes prior inconsistent communications or agreements Does not bar consistent communications or agreements 12

13 Contract Issues Parol Evidence Rule Does not bar evidence of fraudulent statements or writings Does not bar subsequent modifications to contract 13

14 Contract Issues Contract Forms Oral contract not worth the paper its not printed on AIA B141 EJCDC AGC Design Build 14

15 Contract Issues Key Provisions Scope of work Inclusions Exclusions 15

16 Contract Issues Key Provisions Schedule for performing design services Delays 16

17 Contract Issues Pay When Paid vs. Pay If Paid 17

18 Contract Issues Notice Requirements AIA B141 Prompt notice A days Cf. Texas Civil Practice & Remedies Code Notice requirement less than 90 days is void 18

19 Contract Issues Attorney s Fees Provision for recovery by prevailing party Texas Civil Practice & Remedies Code

20 Contract Issues Alternative Dispute Resolution Mediation Arbitration Standing arbitration panel Summary jury trial 20

21 Contract Issues Mediation Confidential Inexpensive Effective Virtually mandatory 21

22 Contract Issues Arbitration Private Knowledgeable fact finders Limited appeal rights Faster 22

23 Contract Issues Standing Arbitration Panel 23

24 Contract Issues Summary Jury Trial 24

25 Contract Clauses Implied Contract Obligations Owner not to delay or obstruct designer or contractor Contractor to perform in good and workmanlike manner 25

26 Contract Clauses Implied Contract Obligations Owner s failure to provide adequate plans and specifications The Longeran case vs. the Shintech case 26

27 Contract Clauses Implied Contract Obligations No implied duty of good faith Disclaimers 27

28 Contract Clauses Differing Site Conditions Equitable allocation of unknown risk Pros and cons of inclusion 28

29 Contract Clauses Differing Site Conditions Type I Conditions materially different from contract indications Type II Unusual conditions not ordinarily encountered 29

30 Contract Clauses Differing Site Conditions Site inspection obligations Disclaimers 30

31 Contract Clauses Exculpatory Clauses Indemnity No Damages for Delay Disclaimers of Liability Limitations of Liability 31

32 Contract Clauses Exculpatory Clauses Indemnity Express negligence doctrine Fair notice Conspicuousness Texas Civil Practice & Remedies Code

33 Contract Clauses Exculpatory Clauses No Damages for Delay General rule No damages for delay clause at work 33

34 Contract Clauses Exculpatory Clauses No Damages for Delay Exceptions Delays not contemplated Owner s active interference Bad faith Intentional misconduct 34

35 Contract Clauses Exculpatory Clauses Disclaimers of Liability No damages for delay Defects in plans and specifications Extra costs Soil conditions Regulatory changes Shifting of risk 35

36 Contract Clauses Exculpatory Clauses Limitations of Liability Liability limited to fee Liability limited to insurance proceeds Liability limited to set amount Liability on comparative negligence basis 36

37 Extras and Changes Scope of Work The Devil is in the Details 37

38 Extras and Changes Constructive Changes Change that only one side recognizes 38

39 Extras and Changes Pricing Examine Contract Terms Unit Prices from Bid Negotiated Amount Time and Materials 39

40 Extras and Changes Change Orders, Exceptions and Reservations Exceptions Quantum meruit Waiver Breach of contract Oral Contract Promissory Estoppel 40

41 Project Delivery Methods Design / Build Design / Build Team Sole Design Builder Design Build Developer 41

42 Project Delivery Methods Design / Build Advantages Accountability Lower costs Faster completion 42

43 Project Delivery Methods Design / Build Pitfalls Design / Builder s mind reading ability Design / Builder s conflict of interest Fewer checks and balances Fewer deep pockets 43

44 Project Delivery Methods Design / Build Pricing Guaranteed max 44

45 Designer Liability Brian W. Erikson Quilling, Selander, Cummiskey & Lownds, P.C Bryan Street, Suite 1800 Dallas, Texas