We are witnessing a litigation explosion. Most design professionals enter practice ill equipped to cope with the myriad of business practices, including writing contracts. Lack of knowledge in business procedures has had a marked effect on exposure to claims.

Lawsuits are increasing in all areas, especially injury lawsuits, according to Martin B. Greenbaum, a Newport Beach lawyer specializing in landscape concerns for over the past 15 years.

“It is important for the design professional to decrease litigation by specifying the rights and obligations of the parties,” Greenbaum said.

“Also,” he added, “realize that anybody who’s good is used to working with a sizeable contract. They expect a professional. If you expect to impress people with a handshake deal you’re living in an era now long gone. You need to have an ironclad contract.”

Communication Failuresd

Granted, errors can never be completely eliminated nor can claims against design professionals be barred. However, you can limit your liability by taking extra caution to avoid certain pitfalls when putting together a contract.

It shouldn’t be surprising to find out that communication failures are often at the crux of lawsuits. There are certain words that you should avoid using when writing up a contract including extreme words, words that have multiple meaning and words that have promise.

Extreme words, such as “final,” “all,” “each,” “any,” and “complete,” can box you into a dangerous legal corner. It’s best to eliminate those words from your contract language.

Another problem with word usage in a contract is that some words have multiple meanings. Simple words, especially, prove to be culprits since they sometimes have literally dozens of meanings. “Inspect” and “supervise” are two words used often by design professionals that should be used cautiously due to their numerous multiple meanings.

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Further, avoid optimistic pitfalls in the wording of your contract. Optimistic words of promise, such as “guarantee,” “warrant,” “certify,” “ensure” and “insure,” need to be used with the utmost caution.

Limit Your Obligations

The purpose of limiting liability for the design professional is quite important?EUR??,,????'??+you want to limit your obligations that are enforceable by law and thus limit your possibilities of being sued. As a result, design professionals must utilize devices to protect themselves legally. Lirnitation of liability is one such device.

This concept implies a belief that a person acting in good faith on behalf of another will be responsible in reasonable measure to that second person, but should not be jeopardized by enormous penalties when unexpected contingencies occur.

Design professionals should use a letter proposal and agreement for spelling out the most important factors connected with the work and also a limitation of liability clause. Your letter of transmittal should include a reasonable dollar amount, and explanation to the client that by limiting liability, the client maintains a lower level of fee structures, and passes the same limitation on to the contractor.

Words such as ?EUR??,,????'??final,?EUR??,,????'?? ?EUR??,,????'??each,?EUR??,,????'?? ?EUR??,,????'??any,?EUR??,,????'?? can box you into a dangerous corner.

When working with a continuing client it is a good idea to refresh the details of your relationship in writing at least yearly. When working with governmental agencies remember that contracts are awarded to the lowest bidder. Low bidders on governmental work frequently seek to recoup losses they may suffer on a job by alleging that the plans and specifications were not fit for the purpose intended. When working with another design professional as a client, the client must include the limitation of liability provision with the owner.

Beware of indemnification clauses in contracts, warns Cliff Webster, a lobbyist representing the Architects and Engineers Legislature Counsel Land Surveyors of Washington. “You should be sure when signing a contract that an indemnification clause does not require the landscape architect or design professional to indemnify the owner or contractor or other consulting parties for that party’s sole negligence.”

“Particularly with public officials you tend to find these clauses being added in. Then when a third party sues the owner and the landscape architect, the owner tries to get the landscape architect to pay for the negligence.

“You can’t get insurance to cover the owner’s share so you need to watch out for that. Since the landscape architect can’t get insured for that [the negligence] they’re going to have to pick it up personally.”

Webster noted yet another pitfall hazardous wastes. “It’s becoming a problem?EUR??,,????'??+who has the responsibility for the abatement of hazardous wastes or substances after the contract work begins. Once again, this is a situation that a landscape architect can’t get insurance for. You may have a job and move the earth only to find that it’s contaminated ?EUR??,,????'??+ you can’t get insurance for that. You clearly need a clause that says that in the case of such a problem the owner is responsible for the problem.”

Define Time & Service

When writing a contract, a landscape architect must define the time the various stages of the job are going to take, according to Greenbaum. “Clearly define what you are going to do and when. One of the biggest complaints against landscape architects is that they’re slow. A lot of that is due to the landscape architect not clearly specifying in the contract the amount of time the job will take. Make sure that you allow yourself enough time to do the work.’

Another area that can prove to be a problem for a design professional is a claim brought by the owner that you have not fulfilled your commitment. Avoid this contractual pitfall, Greenbaum says, by adding a scope of services clause that lists all the services you are going to do.

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“Not only do you want to say what you are going to do, but also what you’re not going to do. Add a phrase saying ‘This excludes...#8217;”

Although theoretically there is no difference in writing a contract for a smaller client versus a larger client, there are some factors to take into consideration. “The bigger the client the more at risk you are,” Greenbaum warned. “You need to have it all spelled out in the contract. Don’t forget that personnel in a larger company can often change.”

Another clause that Greenbaum feels the design professional should be sure to enter on the contract is what he terms the “no dinero, no trabajo” clause. “This is a clause that says that if they don’t pay the bill you get to stop working,” Greenbaum explained. “If you don’t stipulate that in the contract you can’t just stop working because the client isn’t paying when you think he should. Add a clause saying something like ‘Failure to honor any of the billing justifies cessation of further service.’ ”

Still another consideration, according to Greenbaum, for the design professional writing up a contract is to make sure that the client you’re dealing with is someone who is financially solvent. “You can’t deal with the flakes of life you have to deal with the solvent people,” he cautioned.

Take into account the extras that may come up, Greenbaum also advised. “You have to make a provision for how you’re going to get paid for extra work and extra materials. If it’s going to be negotiable you have to put that in the contract.

“Don’t give any representation or warranties,” Greenbaum continued. “You’re a designer, you give the client a design. They’re buying the design not the finished product from you. It’s not your fault if it doesn’t come out right. For example, you don’t guarantee that the plants are going to grow.”

Keep Plans in Hand

Make sure the plans stay in your hands. “You should have a clause in the contract that states that the plans remain the property of the designer, so that the designer has recourse if the designs are changed,” cautioned Ron Wolfarth, a licensed Iandscape architect serving as specifications manager for Rainbird in Los Angeles, California.

Wolfarth also added that field observation services should be written in every contract whether the contractor uses it or not.

There are several major things that a good contract should include, according to Greenbaum, the contract, blueprints, specifications book, a set of general specifications and plans. “You should also specify if k there are any changes and the changes should be in writing and signed by both parties.”

It’s not easy to communicate an agreement on paper. But if you’re going to arm yourself against the litigation explosion, you’d best start with that “ironclad” contract. “Design professionals in the past didn’t include certain clauses because they wanted to get the work,” Wolfarth summarized. “But now you can’t .afford not to have the correct language.”