Business Law Articles
Written By: Mitchell S. Milby
The first AIA contract was published in 1888 and was a scant three pages long. More than 100 years later, construction professionals have more than 100 documents from which to choose. The most recent set, issued in 2007, is the result of the AIA’s ten year cycle of document review and revision.
Much has already been written about the 2007 AIA documents, so this article will focus on four issues common to all architect agreements, whether in the AIA documents or agreements prepared without reference to the AIA documents.
1. Scope of Services
As always, clearly define your scope of services. The B101-2007 (article 3.1) provides:
The Architect’s Basic Services consist of those described in Article 3 and include usual and customary structural, mechanical, and electrical engineering services.
Be sure to review the services “described in Article 3” and strike-out any services that you do not intend to provide.
Why is this important? The scope of an architect’s duty of care is defined by its agreement. For example, the Ft. Worth Court of Appeals recently considered the scope of an architect’s duty of care where a negligence suit was brought against the architect in connection with the tragic drowning deaths in the Ft. Worth Water Gardens in 2004. In its analysis, the Court reviewed the architect’s scope of services in its contract, which required review of the Water Garden's existing conditions and a an opinion as to whether the park's features were in compliance with the Americans With Disabilities Act. The plaintiffs contended that the contract was a "comprehensive review," thus making a safety review necessarily a part of the scope of services. The Court disagreed and ruled in favor of the architect. In doing so, it stated that where there was no “contractual obligation” to conduct a safety review, there was no duty (implied or otherwise) to report or make safe any hazards that the architect may have detected in the Water Gardens.
The moral of the story? Clearly define your scope of services and include a statement that, to the extent of a conflict between your contract and any other documents, your contract controls.
2. Standard of Care
One of the bigger changes in the B101 is the definition of the architect’s “Standard of Care.” Specifically, the B101-2007 (article. 2.2) provides:
The architect shall perform its services consistent with the professional skill and care ordinarily provided by architects practicing in the same or similar locality under the same or similar circumstances. The architect shall perform its services as expeditiously as is consistent with such professional skill and care and the orderly progress of the project.
This is helpful in addressing those situations when owners and others insert their definition of a standard of care for architects that goes above and beyond what most states, including Texas, require, i.e., “highest and best efforts” or “good and workmanlike manner.” With regard to Texas law, the AIA standard is consistent with an architect’s duty of care, whether under Texas common law or by statute (Texas Civil Practice and Remedies Code sec. 150.002). Consequently, an owner must now modify this section in order to require a heightened standard, so be wary of the owner who proposes a modified standard of care.
There are no implied warranties for professional services in Texas (generally); therefore, if you do not make any express warranties regarding your work, none are created.
The A141 (Exhibit A section A.3.2.9), however, provides a new certification for the “design-builder professional” (architects who act as design-builder should pay attention to this) to wit: an attestation that, to the best of their knowledge, the documents are consistent with the owner’s project criteria and comply with applicable standards, laws, and regulations and that the owner’s own consultants can rely upon the accuracy of such certifications.
While this certification provides the owner a heightened level of assurance in the conformity of the design documents, it may create a new problem for the design-builder professional – an express warranty and, consequently, a new basis for professional liability. Worse yet, this is liability that insurance may not cover - express warranties and guarantees are generally not covered.
4. Dispute Resolution
Arbitration is no longer automatically included in the AIA documents. Instead, it is one of three options: litigation, arbitration, or “other,” are the listed choices. Years ago it was presumed that the benefit of arbitration was a savings of time and money; however, this has not proven to be true, especially in cases where an architect is simply seeking recovery of unpaid fees (the costs for arbitration of a fee dispute can easily exceed the fees themselves). Consequently, carefully consider (and, if possible, review with your attorney) whether you should opt for arbitration in lieu of litigation (if the other side pushes for arbitration, a compromise may be to expressly exclude disputes related to unpaid fees from arbitration).
The author, Mitchell S. Milby, Esq., is a managing partner/attorney of Milby, PLLC and a professional affiliate of the AIA. He can be reached with questions at 214-220-1210 ext 110 or email@example.com.