Structuring Architect, Engineering, and Design Contracts: Limiting Risk, Liability and Defenses

Innovations in project delivery models, including design, build, building information modeling (BIM), integrated project delivery (IPD), and green construction, present significant new challenges for design professionals and various pitfalls and potential claims.

Recent trends in the expansion of liability claims include an increase in fiduciary claims against architects and engineers. Claimants carefully parse the design professional's engagement letter for language that may imply a fiduciary relationship.

Generally, the economic loss rule precludes third-party tort claims against design professionals for defective design. However, the application of the economic loss doctrine to the construction arena is evolving, and court interpretation of the rule and its exceptions varies significantly from state to state.

Through careful contract drafting and negotiations, counsel can identify and minimize specific risks by clearly defining the scope of professional services, limiting liability to third parties, disclaiming warranties, requiring additional insured endorsements, and attempting to mitigate contract damages.

Listen as our authoritative panel of construction practitioners looks at the scope of risks facing architects, engineers, and construction design professionals and discusses recent case law developments in theories of liability and defenses. The panel will impart practical approaches to minimize the risk of liability through effective contract provisions and project documentation.