JANUARY 25, 2016 Presen ented ed by: Andrew Keetch Cantey - - PowerPoint PPT Presentation

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

• pe 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

• f 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

• verlook the need for carefully crafted, explicit

descriptions of the design professional’s scope

• f 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

• f the Project that will result in savings to Owner.”

 These types of provisions create A/E risks not

• nly to Owner but also to third parties.

EMAILS

 Diam

amonds

• nds Ar

Are e Fore rever, , Em Emai ail l Comes

• mes 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:

• : 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:

• : 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

• n 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

• n brief.

ef.

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.

GOOD USES – DOCUMENT IMPORTANT CONVERSATIONS

 Con

• ntract

tract Amendme endments nts

 Exchange of emails can form an agreement  Emails can also modify an agreement

DOUBLE EDGED SWORD

 Pre

reven ent Con

• ntract

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

• cumen

ument Con

• ntract

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

DOUBLE EDGED SWORD

 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

• ns 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

• to your

r empl employer er or clie ient

EMAIL DON’TS

 Do th

think nk ab about t wh what at an an em emai ail l would uld lo look

• k 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

• rmal

mal excha change nges

 Do co

consi nside der whether ther a a phone

• ne ca

call ll or in-per person son visit t would uld be be more e ap appropri

• priat

ate

EMAIL DOS

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