Is Your Client Willing to Pay You?
from the desk of Nahom Gebre
One of the most basic responsibilities of the client is to pay the design professional in a timely manner for services provided. Your firm’s ability to survive depends on this. Payment terms should be clear and specific. In a recent contract review we came across the following provision:
Redress for any claim against Owner under this Agreement shall be limited to and enforceable only against and to the extent of Owner’s interest in the Project with respect to which the Services called for herein are to be rendered by Professional. The obligations of Owner under this Agreement are not intended to and shall not be personally binding on, nor shall any resort be had to the private properties of the Owner.
A clause like this limits the practical ability of the design professional to collect any unpaid fees it might be owed by the client. The client’s real interest in the project may be very limited, especially if loans have been taken out against the project. As such, it is important that design professionals closely examine any attempt by their client to limit their potential liability. The business terms of the agreement deserve close scrutiny.