  CAUTION TO A/E'S:
LIMITATION OF LIABILITY CLAUSES There are occasions where an architect or engineer will agree to use a material, or incorporate a feature, or a detail in a design that their better judgment leads them to suspect is somewhat risky, less conservative, perhaps experimental or not the best solution to a given problem. Oftentimes a designer will do so at the behest, or direction of an owner, frequently because the better choice is more costly and the owner wants the lesser choice to save money. At such times, the designer may incorporate a limitation of liability clause in the contract for design services in the belief that the language shifts the risk for failure or non-performance from the designer to the owner who is directing the lesser course of action, against the explicit recommendation of the design professional. A recent decision in the state of California invalidated such clauses on public policy grounds.1 The stated reason for holding the clause invalid was that attorneys for the property owner who negotiated the contracts for design services directly with the design engineers were not themselves engineers. According to the court of appeal, that meant that the engineers enjoyed unfair advantage in negotiations even though the design engineers themselves did not use lawyers to negotiate the contract and the owners did. The concept that technical disparity voids a limitation of liability clause is unsettling. If this opinion stands, limitation of liability clauses in professional services contracts may not be valid except in the most rare of circumstances. This opinion also erodes the protection that design professionals formerly enjoyed under Markborough California, Inc. v. Superior Court (1991) 227 Cal. App. 3d 705. Designers incorporating such protection clauses in their contracts should take precautions against enjoying for themselves a technical advantage over attorneys with whom they may negotiate. If attorneys representing the owner in such negotiations fail to consult with an architect or engineer on their own, designers may consider providing the owner's attorney or the owner itself with the consulting services of an independent third party design professional in the negotiations.2 1Viner v. Brockway, 2DCA No. B067736, 94 Daily Journal D.A.R. 17549. 2Construction Defect Claims and Litigation (Aspen Publishers, Inc., 1995). CCL's Tech Briefs are published periodically by CCL Construction Consultants, Inc. Copyright © 2003, CCL Construction Consultants, Inc. All rights reserved. Inquiries and comments are invited and may be forwarded by mail to the address listed below or via e-mail to cclcc@ix.netcom.com |