Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Professional Standard of Care

 Questions of professional standards come into
play when a client claims the designer did
something wrong or should have acted differently.
 Recall that in tort law, people are held to an
objective standard of care for those around them
 the reasonable person standard.
 Professionals, such as design professionals, are
held to a higher standard consistent with their
training and professional norms  a standard
based on a reasonable, prudent architect under
similar circumstances.
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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Defining the Professional Standard

 Methods of Proof:
 Expert testimony (primary method);
 Violation of statutes and regulations;
 Building codes;
 ADA.
 Industry standards;
 Professional ethics rules.

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Proof: Expert Testimony

 To inform the judge and jury on matters that
are beyond typical lay-person knowledge.
 Who qualifies as an expert?
 What if there is a lack of consensus on the
professional standard of care?

 Services as an expert witness and witness

immunity.

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Alternative Standards
as a Measure of Conduct
 Professional standards may be included in
provisions in the contract.
 Objective satisfaction of the client  Would a
reasonable client be satisfied with this work?
 Subjective satisfaction of the client  Is this
client personally satisfied with the work?
 Informed consent and deviation from standards
through contract provisions.
 Courts will not enforce an agreement to perform
an illegal act.
 Consumer protection statutes.

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Client Claims Against Design

Professionals

 Factors to consider for claims based on tort

law versus contract law:
 Available remedies;
 Statute of limitations on claims;
 When the clock starts to run;
 Available defenses.

 An either-or decision.

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Client Claims Against Design

Professionals: Green Design
 Objectives: energy efficiency and minimizing
negative environmental impacts of designs.
 AIA contract: services for extensive
environmentally responsible design and LEED
certification.
 Problems with definitions of terms and party
expectations.
 The role of third-party certification (LEED).
 New area, future claims and liabilities
possible.
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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Third-Party Claims
Against Design Professionals

A number of
parties or entities
could conceivably
bring claims
against the design
professional.

Figure 11.1

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Possible Third-Party Claims

 Contract claims under a third-party

beneficiary theory.
 Tort claim (negligence or negligent
misrepresentation) for economic losses.
 Intentional tort claim (interference with
contract or prospective advantage).
 Safety violations.
 Failure of duty to warn of defects or risks.

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Third-Party Claims:
Contract Third-Party Beneficiaries

 Intended beneficiaries, even if not a party to

the original contract, may sue the failing
promisor for breach of contract.

 Not a very common theory.

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Third-Party Claims:
Threshold Issues for Tort Law Claims

 Rule: Third-party claimants must prove that

the design professional had a contractual
obligation to perform the act which the
claimant asserts has caused the loss.

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Third-Party Claims:
Negligent Misrepresentation
 Contractors have to rely on work by design
professionals but may not be in contract
privity with the design professional (hired by
the owner).
 No contract  look to tort law.
 Possible tort law negligent misrepresentation
claims:
 Design misrepresent site subsurface conditions;
 The error was negligently made; and
 The contractor was forced by actual site
conditions to incur higher performance costs.
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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Third-Party Claims: Negligence

 Contractors may assert a negligence claim
against a design professional, possibly
claiming that the design professional caused a
loss by:
 Being slow in approving submittals;
 Being negligent in rejecting submittals;
 Imposing on the contractor higher performance
standards than were required by the contract;
 Wrongly refusing to approve progress
payments.
 Variation in case law/rules between states.

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Third-Party Claims:
Defenses to Tort Claims

 Possible defenses:

 No duty of care absent privity of contract.

 Economic Loss Rule.

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Third-Party Claims:
Interference with Contract

 Intentional tort, economic loss rule does not

apply as a defense.
 Possibility of punitive damages.
 Possible claims by contractor:
 Interference with contract;
 Interference with prospective business
advantage.
 BUT, claims are rarely successful.

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Third-Party Claims:
Safety Violations
 Safety is the primary responsibility of the prime
contractor and subcontractors.
 Arises in negligence claims and OSHA violations.
 Potential liability from site and design services.
 No duty for design professional if contract:
 Allocates responsibility to designer only to observe
work;
 Imposes responsibility for safety and work on
contractor; and
 Grants the owner the authority to stop work.
 OSHA substantial supervision test.

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

Summary
 Design professional liability to clients stems
from breaches of obligations in contract
provisions, as well as breaches of the
professional standard of care.
 It is important for design professionals to also
be aware of possible liabilities to a range of
third parties for claims arising out of tort law
and contract law.

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Construction Law for Design Professionals, Construction Managers, and Contractors Sweet and Schneier

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