Orange County Branch Newsletter
Law and CE News
A Trap for Design Professionals: The Heightened Standard of Care
Shifting risk is the fundamental concept behind contractual relationships, but it is possible to put so much risk on a design professional that they become uninsurable. Many owners and developers negotiating contracts with design professionals in today’s market recognize that they are bargaining from an advantaged position. In an effort to exploit this advantage, some owners and developers insert language that heightens the standard of care required to be exercised by a design professional on a project.
Certainly, design professionals strive to provide superlative services on any project. But agreeing to a higher standard in a contract can change the applicable rules if a dispute arises. Under extreme circumstances, the effects of heightened standard of care language could be even more detrimental by making the design professional uninsurable.
Generally, an engineer is legally responsible for performing at the standard of a reasonably careful professional under similar circumstances. Contrary to what the design professional’s client may expect, perfection or even above-average services are not legally required. However, when entering a contract the parties are free to define the terms of their relationship and the services that will be provided. This often includes defining the standard of care.
An example of some of the most common language used in contracts to define the standard of care for design professionals comes from the American Institute of Architects (AIA). AIA Document B101-2007 defines the standard of care as follows: “The [design professional] shall provide the professional services as set forth in this Agreement consistent with the professional skill and care ordinarily provided by architects practicing in the same or similar locality under the same or similar circumstances.” This language is regularly adapted in consultant agreements for engineers.
Despite the general requirement that a professional provide the same quality of services that an average peer would provide, sometimes, parties to a contract attempt to alter and heighten the standard of care. For example, contracts may require a professional to provide the “best” services; create a “state of the art” design; or adhere to the “highest” standard of care. Below are two examples of clauses that will heighten the standard:
Consultant agrees to use its best efforts in the performance of its services on the Project.
The professional services provided by Consultant will be first class and of the highest quality.
The language emphasized above almost certainly increases the professional standard of care, and should be avoided if possible. Design professionals should be extremely wary of such language because by agreeing to provide the “best” services, you have agreed that you will provide services of a higher quality than what the law generally requires.
By contractually agreeing to perform more perfectly than what the law generally requires, a design professional assumes additional risk that could be uninsurable. Most significantly, by agreeing to a heightened standard of care, a design professional could void professional liability insurance coverage or even create an unintended fiduciary duty of care to act solely in the interests of the owner.
When reviewing and negotiating contracts, it is important to look for words and phrases that increase the standard of care and strike them. Though we know design professionals strive for perfection on every job, altering the standard of care in a contract may increase your exposure to liability and have unintended legal consequences.
Contact us at our Oakland, South Pasadena, Orange, or San Diego offices to discuss further:
Stephen B. Litchfield, Esq.
Collins Collins Muir + Stewart LLP
1999 Harrison Street, Suite 1700 | Oakland, CA 94612
Phone: (510) 844-5100 | Fax: (510) 844-5101
Howard J. Franco, Esq.
Collins Collins Muir + Stewart LLP
2173 Salk Avenue, Suite 250 | Carlsbad, CA 92008
Phone: (760) 274-2110 | Fax: (760) 274-2111
Nothing contained in this article should be considered legal advice. Anyone who reads this article should consult with an attorney before acting on anything contained in this or any other article on legal matters, as facts and circumstances will vary from case to case.