Risk Management for Architects and Engineers Part 2: An Elevated Standard of Care

Risk Management for Architects and Engineers Part 2: An Elevated Standard of Care

The last post discussed the common law standard of care for design professionals. That standard can be elevated by contract, statute, building codes, ordinances and other regulations. On July 28, 2015, I had the pleasure of speaking to the Alabama Section of the American Society of Civil Engineers in Orange Beach, AL about the standard of care as part of my risk management seminar.

The terms of a contract may elevate the standard of care as between the design professional and his/her client. Today, virtually all design professionals require the client to execute a professional services agreement prior to commencing work. Although it is good practice to reduce agreements to a writing, the parties must be prepared to be governed by its terms. See Kahn v. Terry, 628 So.2d 390, 392 (Ala. 1993)(quoting Getzschman v. Miller Chemical Co., 443 N.W.2d 260, 270 (1989)) (internal quotations omitted) (“[I]f there is an express contract for architectural services, an architect's duties are determined by the contract for the architect's employment.”).

Contracts can have broad implications as to the standard of care. For instance, the contract may elevate the standard of care by using very broad and ambiguous language. Beware of phrases such as “highest professional skill and care”, “highest standards of the profession,” or “best and most acceptable manner” as any of these may elevate the standard of care. And such language may even be construed to guarantee satisfactory results.

Contracts may also specifically specify conformance to certain codes and standards, thereby elevating the standard of care. For instance, in Hicks v. Com. Union Ins. Co., 652 So.2d 211 (Ala. 1994), an inspection company contractually agreed to perform inspection services pursuant to pertinent provisions of the American Society of Mechanical Engineers (“ASME”) Code. According to the Court, because the inspection company “contractually undertook to provide inspection services . . . in accordance with the ASME Code, the provisions of the ASME Code determine whether [the inspection company] had a duty to inspect the pipe stopper.” Id. at 221. In other words, by contractually agreeing to conform to the ASME standard, the inspection company set the ASME standards as its performance threshold (which may have been higher than its common law standard of care).

Simply put, professionals should think twice before voluntarily assuming duties in a contract. Doing so may elevate the standard of care beyond the standard that your conduct would otherwise be judged against. Not only that, as you will see in a later post, it can also impact your insurability as to your professional liability coverage.

Alabama attorney and professional engineer Jacob W. Hill practices construction law, representing general contractors, subcontractors, material suppliers, developers, architects, engineers, and other parties to construction and development projects. Contact Jacob Hill for more information or a consultation regarding your project.

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