Architects & Engineers - Contracts (Part 3): Standard of Care & Why You Should Care

What is the standard of care? It is the “yardstick” to measure the success or failure of a design professional’s services, or, as I often explain it: how you know if the architect/engineer properly performed his/her services.

Most states apply the following definition of standard of care in lieu of contract language to the contrary:

The architect [or engineer] shall perform its services with the professional skill and care ordinarily provided by competent engineers or architects practicing in the same or similar locality and under the same or similar circumstances and professional license and as expeditiously as is prudent considering the ordinary professional skill and care of a competent engineer or architect

In Texas, any government contract that imposes a different standard is void. See Texas Local Gov’t Code §271.904(d).

The standard of care also recognizes that architects and engineers are not expected, and should not be required, to be perfect (no disrespect intended). It’s not always that simple though, is it? You can unwittingly agree to a different or higher duty of care. Sometimes this sneaks in (taken from ConsensusDOCS):

The Architect/Engineer accepts the relationship of trust and confidence established by this agreement and covenants with the Owner to cooperate and exercise the Architect/Engineer’s skill and judgment in furthering the interests of the Owner

The Owner and Architect/Engineer agree to work together on a basis of mutual trust, good faith and fair dealing . . .

Harmless, right? I mean, who doesn’t want to be a team player. If you see this language, stop. This (trust, confidence, furthering owner's interests, good faith & fair dealing) may make you a fiduciary. A fiduciary relationship is based on the relationship of trust and confidence (those words again) that the law imposes (parent/child or doctor/patient) or is assumed by agreement.

A brief comment on what it means to be a fiduciary.

In the lawsuit styled City of Victorville v. Carter & Burgess, the jury found that Carter & Burgess breached its fiduciary duty to Victorville (not the ordinary standard of care case). The result? A $52 million verdict. Without detailing the case here (the subject of another article), the lesson is to do whatever possible to avoid language suggesting a fiduciary or duty other than the generally-accepted standard of care.

Other examples of unrealistic expectations/heightened duty show up in the following contract language:

• documents shall be complete and accurate, have no defects, and provide all details necessary for the contractor to build the project
• architect/engineer will correct all errors or omissions in its documents at no additional cost (or as Basic Services)
• architect/engineer will comply with “all Applicable Laws”

What to do?

A few suggestions. 

First, whenever possible, set client expectations by explaining what architects/engineers do and don’t do. I am continually surprised by the lack of understanding of the design & construction process when negotiating agreements with opposing counsel.

Second, add/revise as follows:

To counter a fiduciary obligation:

Client understands, acknowledges and agrees that the architect/engineer shall be acting as an independent consultant at all times during the performance of this Agreement and no provision or obligation expressed or implied in this Agreement shall create an employment, agency, or fiduciary relationship

To counter "complete and accurate documentation," either strike this entirely (preferable) or add (but still rid yourself of "accurate"):

. . . subject to the Owner’s acknowledgement that, in order to construct the Work, the Contractor will provide additional information, including shop drawings, product data, samples and other similar submittals

To counter "correction of all errors or omissions at no additional cost:"

Architect/engineer will correct its part of the documents that do not comply with the Standard of Care at no additional cost

To counter "architect/engineer will comply with all Applicable Laws:"

; however, architect/engineer shall not be responsible for the interpretation of all Applicable Laws by others

. . . and the final “belt and suspenders” language:

The Standard of Care shall be the standard governing the performance of the architect’s/engineer's services notwithstanding anything in this Agreement to the contrary

In sum, discuss expectations with your client and avoid any language promising a particular result or perfection. 

Questions? Let me know. Next time: "insurable?"