Architect is subject to potential liability for failure of design to comply with fire code requirements regardless of whether the generally accepted standard of care was satisfied. This is because it agreed to contract language stating it would comply with the Standard of Care AND would comply with code requirements. This created two separate duties – making the duty to comply with codes absolute and not dependent on meeting the standard of care.
Consider this situation: You have been awarded a commission to design a building for a new client. You propose using the AIA’s Standard Form of Agreement B101 as your owner-architect contract, but the client insists you sign a version of the B101 “with just a few minor changes.” You notice that one of those changes requires you to “comply with all laws, rules, and regulations," rather than, as the B101 states, to “review laws, codes, and regulations applicable to the Architect’s services.” That changed language should be setting off alarm bells for you.
Continued from If You Build It, They Will Sue: Condominium Projects – Part I, an analysis of Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP, et al. and its impact on future court decisions.
In the world of claims-related contract clauses for design professional agreements, the indemnity and defense clauses get all the attention. However, lurking in the shadow of the indemnity clause is a menacing cousin with potentially even greater and more frequent impact and risk: the prevailing party attorneys’ fee clause. Both clauses share the common risk that they are often not covered by professional liability insurance because each represents a contractually-assumed liability which would not exist in the absence of the contract.
Engineering firms often take jobs that knowingly expose the firm to legal risk. But how much risk is too much? That’s a question that more and more engineering and design firms are asking when confronted with contracts that contain controversial “Duty to Defend” language.