Remodel - Architect Contract / Liability?

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NorCal13
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Joined: Sat Jan 26, 2019 2:02 pm

Remodel - Architect Contract / Liability?

Post by NorCal13 »

We are considering a remodel (here in CA). Since many of you have probably done a remodel recently, I thought the wisdom of the crowd could help with this Q:

The architect has sent over a draft agreement. It states that his liability to us and to all the contractors/sub will not exceed the total of his fees paid. (Excerpt below) Does this look ok or should this be a fixed amount? What should the policy limits be? Are architects required to carry any other types of insurance? Grateful for any input from those in the know!

……..

His excerpt from contract: "Limitation of liability. Client agrees to limit the liability of Architect to Client and to all contractors and subcontractors on the project, due to Architect’s negligent acts, errors, or omissions, such that the total aggregate liability of Architect to all those named shall not exceed the amount of Architect’s fees paid. It is intended that this limitation apply to any and all liability or cause of action however alleged or arising, unless otherwise prohibited by law. Client further agrees to notify all contractors and sub-contractors of this limitation of Architect’s liability and require them to abide by this limitation of damages arising from Architect’s negligence.”
Random Poster
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Joined: Wed Feb 03, 2010 9:17 am

Re: Remodel - Architect Contract / Liability?

Post by Random Poster »

No idea if that is normal or not.

But in my prior line of work, I’d always argue that such a clause didn’t properly incentivize the vendor to not screw up, as the most they’d be out is just their time, and so I’d push that the liability cap should at least be some multiple of the amount paid—that way they are out of pocket something extra if their work was defective.

Of course, I’d push to eliminate any sort of liability cap, saying that no one caps our liability and, besides, including one suggests that you don’t stand by your work. Sometimes I was successful and sometimes not.
Ladeedaw
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Re: Remodel - Architect Contract / Liability?

Post by Ladeedaw »

That design company I work for has a similar clause in the standard contract. I've seen it on other design contracts as well. So I think it's not uncommon. I've seen it changed or removed if a client pushes back and the company really wants the project. I recently saw an instance where a client pushed back on that clause and the company told them to find someone else to do their work. So I think you can ask if they'll increase their contractual liability limit. If they won't you have to decide if it's worth it for you to continue with them or look for another architect.

To your question, it's common for the firm to have professional liability insurance beyond that amount. But my understanding is that the clause makes it more difficult to win a claim/lawsuit if problems arise.
carolinaman
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Location: North Carolina

Re: Remodel - Architect Contract / Liability?

Post by carolinaman »

NorCal13 wrote: Wed Jun 16, 2021 9:38 pm We are considering a remodel (here in CA). Since many of you have probably done a remodel recently, I thought the wisdom of the crowd could help with this Q:

The architect has sent over a draft agreement. It states that his liability to us and to all the contractors/sub will not exceed the total of his fees paid. (Excerpt below) Does this look ok or should this be a fixed amount? What should the policy limits be? Are architects required to carry any other types of insurance? Grateful for any input from those in the know!

……..

His excerpt from contract: "Limitation of liability. Client agrees to limit the liability of Architect to Client and to all contractors and subcontractors on the project, due to Architect’s negligent acts, errors, or omissions, such that the total aggregate liability of Architect to all those named shall not exceed the amount of Architect’s fees paid. It is intended that this limitation apply to any and all liability or cause of action however alleged or arising, unless otherwise prohibited by law. Client further agrees to notify all contractors and sub-contractors of this limitation of Architect’s liability and require them to abide by this limitation of damages arising from Architect’s negligence.”
I do not know if this is standard for these types of contracts but it would not be acceptable to me. The architect and subs could do things that result in personal injury to you and your family, and such injuries can far exceed his limitation of liability. I would push back on this and see how they respond. There may be some middle ground of limited liability that is acceptable to you. If you have an attorney, you should ask him about this.
SubPar
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Re: Remodel - Architect Contract / Liability?

Post by SubPar »

I just took a look at one of our Architect's contracts (drafted on an AIA B109, which is multi-family/mixed-used development and not single-family residential, FWIW) and it does have a section for limitation of liability at an agreed-upon amount, but the standard language in the contract is not limited to the Architect's fee from what I'm seeing.

I would probably have an issue with that clause, personally. Architects should be carrying Professional Liability separate from their G/L, Umbrella, etc. policies. A design mistake on their part that results in significant rework could very easily surpass their fee.
crefwatch
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Re: Remodel - Architect Contract / Liability?

Post by crefwatch »

If you are not engaging someone to supervise mechanical subcontractors, but only to design a job, they should not be responsible for the quality of the work execution. What does your General Contractor's contract say? He's the one supervising workers.

It's a poor comparison, but a sculptor is not responsible if a statue installed by another party falls over and injures someone because the pedestal collapsed.
carolinaman
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Re: Remodel - Architect Contract / Liability?

Post by carolinaman »

crefwatch wrote: Thu Jun 17, 2021 11:26 am If you are not engaging someone to supervise mechanical subcontractors, but only to design a job, they should not be responsible for the quality of the work execution. What does your General Contractor's contract say? He's the one supervising workers.

It's a poor comparison, but a sculptor is not responsible if a statue installed by another party falls over and injures someone because the pedestal collapsed.
I agree you cannot hold architect responsible for poor execution by GC and subs. However, if he has a faulty design that is executed by GC and subs in accordance to the design, who is responsible for any damages occurring from the faulty design. IMO (not a lawyer), that would be the architect.
eagleeyes
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Re: Remodel - Architect Contract / Liability?

Post by eagleeyes »

We recently signed with an architect. He had the standard AIA contract which I believes capped his liability at 50k. Seeing as to how we’ve already paid them about 25k, looks like it will work out to be their fees essentially
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