LOL Clause / Hold Harmless when working for other engineers ..?
LOL Clause / Hold Harmless when working for other engineers ..?
(OP)
My situation is as follows:
I'm an engineering sub-consultant, specializing in water resources. Sometimes I work for a client who's a land owner, and in those cases I generally get him to sign a LOL clause in the contract, that looks something like this:
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Limitation of Liability: In recognition of the relative risks and benefits of this analysis to both the client and the consultant, the risks have been allocated such that the client agrees, to the fullest extent permitted by law, to limit the liability of the consultant to the client for any and all claims, losses, costs, damages of any nature whatsoever or claims expenses from any cause or causes, including attorneys' fees and costs and expert witness fees and costs, so that the total aggregate liability of the consultant to the client shall not exceed $_______. (initial: _____ ) It is intended that this limitation apply to any and all liability or cause of action however alleged or arising, unless otherwise prohibited by law.
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Reason being, my fees are low, so I can't exactly bear responsibility for a katrillion dollar lawsuit because I went to go take pictures of a drainage problem for $500. I sit down with the owner when he signs the contract and explain it to him, then he fills in the liability limit and initials.
..but sometimes I work for engineers, doing complicated hydrology studies or the like when they don't have the expertise to perform them in house. These are performed entirely by me, stamped by me, etc. For fixed fee proposals (It will cost you $X for me to supply you a hydrology study) I would like to include a similar clause.
QUESTION ONE: Is this typically done between engineers?
..and then other times, when I work for engineers, they want to hire my company to provide them hourly labor for their designs, which could include drafting, design, hydrology, running prints, whatever. These would be on projects they oversee, they review, they stamp, and neither my name nor the name of my company ever shows up on the deliverable except occasionally as some initials in the title block of a construction drawing.
QUESTION TWO: Do I need such a clause for that sort of contract at all? Do I need some sort of 'hold harmless agreement' instead? Should I not worry about it?
Thanks in advance.
I'm an engineering sub-consultant, specializing in water resources. Sometimes I work for a client who's a land owner, and in those cases I generally get him to sign a LOL clause in the contract, that looks something like this:
********************
Limitation of Liability: In recognition of the relative risks and benefits of this analysis to both the client and the consultant, the risks have been allocated such that the client agrees, to the fullest extent permitted by law, to limit the liability of the consultant to the client for any and all claims, losses, costs, damages of any nature whatsoever or claims expenses from any cause or causes, including attorneys' fees and costs and expert witness fees and costs, so that the total aggregate liability of the consultant to the client shall not exceed $_______. (initial: _____ ) It is intended that this limitation apply to any and all liability or cause of action however alleged or arising, unless otherwise prohibited by law.
********************
Reason being, my fees are low, so I can't exactly bear responsibility for a katrillion dollar lawsuit because I went to go take pictures of a drainage problem for $500. I sit down with the owner when he signs the contract and explain it to him, then he fills in the liability limit and initials.
..but sometimes I work for engineers, doing complicated hydrology studies or the like when they don't have the expertise to perform them in house. These are performed entirely by me, stamped by me, etc. For fixed fee proposals (It will cost you $X for me to supply you a hydrology study) I would like to include a similar clause.
QUESTION ONE: Is this typically done between engineers?
..and then other times, when I work for engineers, they want to hire my company to provide them hourly labor for their designs, which could include drafting, design, hydrology, running prints, whatever. These would be on projects they oversee, they review, they stamp, and neither my name nor the name of my company ever shows up on the deliverable except occasionally as some initials in the title block of a construction drawing.
QUESTION TWO: Do I need such a clause for that sort of contract at all? Do I need some sort of 'hold harmless agreement' instead? Should I not worry about it?
Thanks in advance.
Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East - http://www.campbellcivil.com
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RE: LOL Clause / Hold Harmless when working for other engineers ..?
If you do not carry liability insurance, you should. If you do not have it, you will find when shopping for a policy that written contracts with specific language will lower your premiums.
RE: LOL Clause / Hold Harmless when working for other engineers ..?
For the hired labor, think about a LOL that would limit strictly to the fees for the project. This would depend on what level of responsibility you have in it though. If you are running the design/analysis, and their PE reviews, then the ultimate responsibility is theirs, and so is most of the profit.
RE: LOL Clause / Hold Harmless when working for other engineers ..?
I always include the clause he wrote, regardless of the client, but have never had to use it...yet.
Mike McCann
MMC Engineering
Motto: KISS
Motivation: Don't ask
RE: LOL Clause / Hold Harmless when working for other engineers ..?
Good input TDAA - I was hoping to hear from some Geotechs because subconsulting for other engineers is your bread and butter. What I've read in several places, is that you need to explain the LOL clause to the client and have them fill in a number they want, instead of going with a standard, because that way it'll hold up better in court. I've been going with 10x(fee) as a suggestion, but I might cap it if that starts to approach my prof liability limit.
The main thing I'm wondering about is the hired labor thing though. If the other guy is taking the profit, he needs to take the risk. The LOL clause above was adopted from something a lawyer drew up. On my most recent hourly "labor" contract, I stuck something in that looked like this:
**
(the client company) acknowledges that as engineers of record, (the client company) maintains full responsibility for the design and oversight of the (my company) staff providing the engineering labor, and in doing so assumes full professional engineering liability for the project from (my company) and (my company)'s engineering staff.
**
I drafted that up, figured it was good enough for now, because that's how I understand it to work anyway whether it's explicitly stated or not. Am I right in assuming that's how it's supposed to work? Still fairly new to the independent consulting game.
Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East - http://www.campbellcivil.com
RE: LOL Clause / Hold Harmless when working for other engineers ..?
The main issue we had was that we could easily get into a claim for $50K to have foundation remediation performed when we only received $1500 to $2000 for the design.
As always, if the client did not like the limit, they could red-mark it. Some clients with a long history would write in one million. We would still work for them since the likely hood of being sued was low.
It is not bad to have them initial the value, but I know with many people I have dealt with that the blank would not be filled in when returned, and I would have to hound them for it. I am not sure of the legalities of the contract being signed and the initial spot not being filled out.
RE: LOL Clause / Hold Harmless when working for other engineers ..?
Use a LOL clause in all of your contracts. Use an indemnity clause as well.
As for the "hourly" hire-a-tech...
You are a licensed engineer. You are an authorized engineering business. Just because you only provide paraprofessional services on some projects does not mean that you can't get roped into a liability fray, even if you are ultimately absolved. Remember that contracts are only good if there's a problem. If there's no problem, the contract doesn't come into play. Plan for the problems and hope they don't occur.
I have attached a booklet on contract review that you might find helpful in a couple of these respects.
RE: LOL Clause / Hold Harmless when working for other engineers ..?
Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East - http://www.campbellcivil.com