from the desk of Judy Mendoza
A recently reviewed agreement between an architect and a subconsultant illustrates the importance of having a signed agreement in place prior to performing services for a client or receiving services from a subconsultant. The architect’s subconsultant agreement had been revised by the subconsultant to include the following language:
- Continue to negotiate with the subconsultant.
- Attempt to negotiate a corresponding limitation of liability in the prime agreement (noting that it’s probably too late to do so).
- Conduct a risk management analysis based on the project type, location, client, and extent of the subconsultant’s services to evaluate the probability and cost of a potential claim to determine whether or not the architect is willing to assume the risk of a claim that exceeds $500,000.
- Discuss with local legal counsel the legal status of limitation of liability provisions in the local jurisdiction.
- Analyze, with advice from legal counsel, the risks of walking away from the agreement with the subconsultant and starting over with another firm. Might this action result in delay claims from the owner? Could this result in a fee claim by the subconsultant?
- Consider, with input from local legal counsel, the option of not signing the agreement but continuing to pay the subconsultant. This might force the subconsultant to turn over its deliverables without the protection of a contractual limitation of liability.