Practice Management - Risk Management Flashcards
Agency
legal concept in which one person (the agent) acts on behalf of another (the principal) in dealings with another (the third-party)
In the concept of agency, who fulfill the roles of the agent, the principal, and the third-party?
Architect = the agent Client = the principal Contractor = the third-party
Legally speaking, when the agent consents to act on behalf of and represent the interest of the principal, the agent is empowered to ____?
create a legal relationship between the principal and third-parties.
Vendor
Someone who supplies a specific product for a fixed price.
- act primarily in their own interest
- contractors are considered to be vendors
Duties
The law defines what one person “owes” another in particular relationships, including contracts, by applying this to a set of terms or requirements.
What are 3 ways duty is established for the architect?
- By the terms of the contract, whether written or oral.
- By legislative enactment, such as building codes and architectural licensing laws.
- By the architect’s conduct, such as implied duties
Implied duties
In situations arise that are not covered by contracts or general conditions, architects may not act unilaterally without consulting the client and may be liable for their action or inaction.
What are 6 examples of implied duties?
- Cooperating with contractors
- not all actions related to this duty are clearly stated in contracts - Not interfering with the contractor’s work
- actions that delay
- actions that add cost
- actions that cause the contractor to modify standard methods of construction - Giving relevant information to contractors
- anything that may affect job progress
- any problems architect has observed - Assisting the owner in coordination
- helping owners coordinate the schedules and requirements of other contractors and vendors who are not under the general contractor’s control - Ensure that the plans and drawings comply with the requirements of the building code
- Comply with the standard of care
Liability
the legal responsibility for injury to another person or damage to a property
Negligence
the failure to use due care to avoid harming another person or damaging property
What is an important way in which architects can be held liable?
negligence
What are the 4 conditions that must be met for an architect to be found negligent?
- Must establish a legal duty between the parties
- Must show that the architect has breached that duty
- Must show that the breach of duty caused the damage or injury suffered by the other party
- Must show that there was actual damage or harm to the second party
What are 3 common defenses to claims against the architect?
- Betterment
- Statute of Limitation
- Statute of Repose
Betterment
A legal concept that says if the architect has omitted something, if the owner would have had to pay for that missing item despite the architect’s omission, they cannot make the architect pay for it.
- A way an architect can defend themselves against claims made against them.
- Often applies to claims of omission by the architect
Statute of Limitation
Sets a time limit (typically 2-3 years) within which a construction claim can be made against an architect, after which the claim is permanently barred, starting from the date of discovery of the construction defect.
Statute of Repose
Sets a time limit (typically 5-10 years) within which a construction claim can be made against an architect, after which the claim is permanently barred, starting from the date of substantial completion or another fixed date.
What are ways that architects can use good project management to limit their exposure to liability?
About the client:
- know the client
- use well-written contracts and follow them thoroughly (AIA contracts)
About the project team:
- make sure the appropriate employees are assigned to each project
- maintain an active quality control program
- maintain through documentation
- be careful of last minute changes or substitutions
About the office:
- carry liability insurance
What are 2 main ways that architects can limit their exposure to liability?
- good project management
2. preventing problems from starting in the first place through conflict resolution
Who is responsible for conflict that involves broad office issues?
the principal
Who is responsible for conflict that involves members of the project team?
the project manager
Who is responsible for conflict that involves construction or others involved with construction activities?
the project manager or construction administrator
What is the first thing you should do if a conflict occurs during design or construction?
Look to any applicable contracts and let contract language provide the path to resolution.
What are 7 important elements of conflict resolution?
- recognize the problem
- define the problem / root causes of conflict
- gather the required facts and information
- gather the affected participants
- Look at alternatives
- Select best alternative
- Implement the solution
Privity
legal concept in which architects are (in theory) protected from legal claims by parties with whom they have no direct contractual relationship
In which AIA document is privity clearly stated as an indemnification clause?
A201 General Conditions for the Contract for Construction
Indemnification clause
Holds harmless both owner and architects for any damages, claims, or losses resulting from the performance of any work on the project, whether by contractors or others with whom the architect has no contractual relationship.
Make sure this is included in contracts.
What are 3 ways to minimize third-party claims?
- Do not include language in contract that states or implies responsibility, management, supervision, coordination, planning of construction
- Do not give directions concerning methods of construction
- Do point out obvious construction safety problems to contractors and follow up in writing with both contractors and owners
