Ch. 15 - Risk, Responsibility and Dispute Avoidance Flashcards
Disclaimers
exclusion, limitation, or waiver clauses designed to preclude or limit the liability of one of the parties. Clearly shift risk in advance. e.g. consequential damages clauses, no-damage-for-delay clauses, and pay-when-paid clauses. Done with clear writing in contract or accompanying doc.
Ways to allocate risk
contract, insurance, disclaimer. If not, courts will allocate responsibility - not desired.
Risk shifting
ensuring the right party carries the right risk. done by contractual language, communication, appropriate decision making process & decider.
Best practices for contract to allocate risk
define roles & responsibility, contemplates assignment of risk, addresses insurance, has dispute resolution mechanism
Questions to think about when identifying risks
what losses would be suffered by the parties if project delayed? who should bear risk if tech doesn’t work?
Insurance/performance bonds? what if tech challenges are harder than expected? who will complete the work if provider defaults?
Common Law presumptions
Disputes are inevitable, contracts are entered into freely, words in contract have normal meaning, agreements dont include guarantees or warranties of min standard of competency, quality & fitness for purpose, if a risk has been identified in contract then parties had addressed their minds to that issue.
Common law response shortcuts
applied as a ‘general rule’, create consistency, certainty, fairness, subject to ‘unless otherwise’ agreement
Disputes cause by client dissatisfaction best practices
understand clients expectations, advise the client of the choices available, explain adv/disadv of each option, allow client to make an informed decision, ensure appropriate party decides, make progress reports, be proactive in solving problems, extreme caution before launching lawsuit, record decision/reasons for issues
How to keep client happy
contractual language, communication, appropriate decision making process & decider.
importance of recording decisions/reasons for issues
when facts are recorded in detail/accurately, it reduces disputes. Increase chances of success. contemporary notes more convincing that post-dispute justification. Photos tell a story better than words.
