Perfection Not Required: Beware Standard-of-Care Contract Clause Traps
The law does not require perfection!
Our company provides Contract Review services for its design professional clients. Our review is from a risk management and insurance perspective. Our role is to advise our clients so they can make the right decisions for their company.
One of the key issues in a contract is the “Standard of Care.” Unfortunately, it is not uncommon to see a provision like this one:
Design Professional represents that its services will be performed in a manner consistent with the highest standards of care, diligence, and skill exercised by nationally recognized consulting firms for similar services.
The law does not require you to be perfect, but this one-sided client-drafted provision does! The “Highest” standards have yet to be achieved; how can your client expect you to perform to them?
Agreeing to perform to the “highest standards” is not only unfair, it is uninsurable. It opens you up to liability for breach of contract even though you were not negligent. Your Professional Liability policy is triggered by your negligence.
The most commonly applied definition of the standard of care for engineers can be found in the owner/engineer contract EJCDC E-500:
Standard of Care: the standard of care for all professional engineering and related services performed or furnished by Engineer under this Agreement will be the care and skill ordinarily used by members of the subject profession practicing under similar circumstances at the same time and in the same locality. Engineer makes no warranties, express or implied, under this Agreement or otherwise, in connection with Engineer’s services.
It is critical to avoid setting the performance bar higher than that which the law requires. Make sure any standard of care provisions are reasonable and that your contracts don’t contain any express or implied warranties that require you to performance beyond that same standard.
Thanks Jeff, this is good information to be shared with all involved in DB. Too often people dont even read their contract let alone look for traps like this.
A pretty narrow intepretation. EJCDC asks for "average" performance while deisgners sell "we're the best". If your going to sell it, deliver it!! Highest does not mean perfect, just ...
I was critical of an installation because it did not meet my implied standards and felt I was protected against an inferior installation because the language of the contract required th...
Abuses of language in engineering are to be found everywhere. For example "site specific" might be labelled "contractor geometry" since it too often appears that every piece of earth on this earth is unique in this universe nothing else like it is to be found anywhere else.
Another abuse of words is calling something "cosmetic" for example reducing the insulation over an electrical cable so the outline of the stranding is visible on the surface. It is not a good thing to reduce the thickness of insulation over a cable,altho it may be "good enough" but calling the reduction "cosmetic" is cover up for a movement against the direction of goodness.
Thus in my case reading the contract did not protect against an installation that was not as good as I wanted (or harder to judge what was really necessary).
