Design professionals play an important role in the construction industry; architects are responsible for designing the buildings that are constructed each day. Contracts between architects and their clients should be designed to limit the architect's liability in relation to any given project. There are three essential provisions that a construction attorney can incorporate into an architect's contract to minimize financial risk.
1. Limit Financial Recovery
Any time a breach of contract occurs, the injured party can seek financial compensation in a court of law. The amount of money requested by an injured party can be significant if provisions are not made in the contract to limit financial recovery.
An architect should work closely with his or her attorney to draft a contract that limits financial liability to the greater of the actual damage amount or the total amount of the architect's fees. This provision will provide financial protection for a design professional in the event a breach of contract occurs.
2. Limit Liability to the Firm
Another important provision that must be included in any construction contract is the limiting of liability to the firms instead of the individuals involved in a construction project. Even though individuals may sign the contract, it should be clear that they are signing as an agent of the firm or company they work for.
Construction contracts need to clearly state that individuals are exempt from prosecution and that any compensation sought must be against the firm or company. This provision will protect both the design professional and his or her clients from becoming personally involved in potential lawsuits in the future.
3. Shorten the Statute of Limitations
All construction contracts should clearly define a statute of limitations that applies to legal action pertaining to the construction project outlined in the contract itself.
Design professionals who specify the amount of time their clients have to pursue legal action if dissatisfied with the services the architect has provided can enjoy a significant reduction in their liability.
Once the statute of limitations has passed, the threat of a lawsuit becomes void. Courts are typically willing to uphold shortened statutes of limitations outlined in a construction contract as long as the timeframes are reasonable and were negotiated by both parties.
The contract between an architect and his or her employees can determine the amount of liability a design professional assumes during each project. Work with an experienced construction attorney to ensure your contracts contain provisions that limit your liability in the future. For more information, contact a law firm like Sauro & Bergstrom, PLLC.