Clients often have information on hand that relates to a proposed project, such as facility assessment reports, prior surveys, and reports that pertain to the existing conditions of the site. The client may believe that the existing information is sufficient and that there is no need to spend additional money to update existing surveys or studies. However, experience has shown that when design solutions are based on outdated or incomplete information, the client must come up with additional funds in the middle of construction when it becomes apparent that the proposed design solution is based on information that is inaccurate or outdated. In that scenario, the contractor will seek a change order from the client to solve for the differing site condition. The client, in turn, may allege that the design team should bear responsibility for the additional costs because the initial design solution was inadequate and did not meet the applicable standard of care. It is essential that design firms proactively address this potential scenario by including a valid “right to rely” provision in their agreements. The provision should explicitly specify that the design firm’s services are rendered in reliance on information that has been provided to the firm by the client and the client’s other consultants.
Standard form documents establish right of design teams to rely on client-provided information
Both the AIA and EJCDC standard forms give the design team the right to rely on client-provided information. It is always prudent to specifically establish that you are entitled to rely on client-provided information in your standard agreements with your clients.
Section 3.1.2 of AIA B101-2017, Standard Form of Agreement Between Owner and Architect, states:
The Architect shall be entitled to rely on, and shall not be responsible for, the accuracy, completeness, and timeliness of, services and information furnished by the Owner and the Owner’s consultants. The Architect shall provide prompt written notice to the Owner if the Architect becomes aware of any error, omission, or inconsistency in such services or information.
Section 2.04 B of EJCDC E-500 (2020), Standard Form of Agreement Between Owner & Engineer for Professional Services, states the following:
Owner shall be responsible for all requirements and instructions that it furnishes to Engineer pursuant to this Agreement, and for the accuracy and completeness of all programs, reports, data, and other information furnished by Owner to Engineer pursuant to this Agreement. Engineer may use and rely upon such requirements, programs, instructions, reports, data, and information in performing or furnishing services under this Agreement, subject to any express limitations or reservations applicable to the furnished items.
Issues for you in using information that has not been updated
In situations where the client insists on using available information without updating the surveys and reports or using information provided by other consultants over which you have no control, you want to go beyond just establishing the right to rely on client-provided information. You want to specifically state that:
- Your firm shall be entitled to rely upon information provided by the client, including the technical sufficiency and timely delivery of documents and services furnished by the client’s other consultants.
- Your firm shall not be required to review or verify any information provided by the client or the designs or computations provided by the client’s other consultants for compliance with applicable laws, statutes, ordinances, building codes, rules, and regulations.
- Your firm shall have no responsibility for any services provided by the client’s other consultants.
- The client shall indemnify and hold you harmless from and against claims, damages, losses, and expenses arising out of the services performed by the client’s other consultants.
If you are to be put into the role of coordinating the independent services of other professionals (those hired by the client and not by you), your role and the limitations of it should be carefully explained in your scope of services.
With the advice of legal counsel, the firm should consider adding language such as the following that provides both for an indemnity and waiver of claims that arise from incorrect information provided to your firm.
Design Firm shall review plans and other information representing the existing condition of the facility that are provided by the Client and shall make a visual observation of the designated site. As the Design Firm is relying on “as-built” or record documents and its limited review of the site, the Design Firm shall assume no responsibility for concealed conditions or incorrect information in the plans and other information provided by the Client. Design Firm’s review of the information and visual observation of the site shall not be construed to verify that information provided is correct. The Client agrees that Design Firm’s professional services shall be based on the information provided and visually observable conditions. Because of this limited scope of services, Client agrees to waive any claim against Design Firm and to protect and indemnify Design Firm from any cost, loss, or damage to Design Firm, including additional services of the Design Firm, resulting from incorrect information provided to the Design Firm or conditions of the site that are not readily apparent from the visual observation of the site by the Design Firm.
Firms who proactively seek these additional protections will put the client on notice that the decision not to spend money on updating available information could impose extra future costs that will be the sole responsibility of the client.
For more information on how you can avoid contracting pitfalls with the inclusion of strong contract defenses, you can stream our previously recorded professional practice webinars.