You’ve won that big project. Now, it’s time to sign that big contract. But, you’re a design professional; you’re not a lawyer. What can you do to avoid making a mistake?
In a perfect world, you would be able to avoid all futures claims and lawsuits. Of course, that’s probably not going to happen. But developing well-defined, internal risk management best practices is a good first step.
“Contract management” is the most basic risk management best practice. “Contract management” is the process of systematically and efficiently managing your contracts – from creation to execution – to maximize profits while minimizing risks.
In short, your roles and responsibilities in any project, and the risks and exposures you choose to assume will largely be determined by the contract language.
As result, “Contract Review Services” should be a high priority on every project for every design professional.
This collaborative effort involves both the design professional and an attorney. Outside consultants will work with a risk manager or contract review committee, if you have one, and if you don’t, we can you set one up.
The available Contract Review and Risk Management services are intended to provide best practice recommendations to the design professional.
A typical “Contract Review Report” will highlight as many as 10 different contract provisions, including:
- Scope of Services;
- Owner’s Obligations;
- Billing & Payment Terms;
- Termination of the contract should that be necessary;
- Consequential damages that can flow from a breach of the contract;
- Indemnification, Insurance & Limits of Liability Clauses;
- Dispute Resolution should that become necessary;
- Certifications, Guarantees & Warranties; and
- Copyright and Instruments of Service.
Once completed, the “Contract Review Report” is intended to help the design professional better understand the terms of the contract being negotiated. And more importantly, better understand the risks the design professional is agreeing to assume.
Design professionals always should check with their insurance agent or broker to discuss any questions regarding insurance coverage or compliance with the policy terms when negotiating a contract.
A “Contract Review Report” provides clients the benefit of advice from both a real world business and legal perspective. It provides that “second set of eyes” during the contract negotiating process to minimize, or avoid, future claims and potential lawsuits.
This video is just one in a 10-part series developed to better assist architects, engineers, and design professionals, and anyone involved in the construction industry, to help manage risks and liability on their projects.
Timothy B. Soefje is Managing Member and head of the professional liability section at the boutique firm of Seltzer │Chadwick │Soefje, PLLC. in Dallas, Texas. For regular information about professional liability matters, follow him on Twitter at @TimSoefje. For more information, visit us at www.realclearcounsel.com or contact Mr. Soefje at firstname.lastname@example.org