By Janeia Brounson

On the surface, contracts all look alike. Once you’ve seen one, you’ve seen them all, or so it seems.

You have your introductory paragraph, your terms and conditions. They always include some form of payment terms, liabilities, warranties, term and termination, and dispute resolution – followed by a signature page.  

Pretty standard, right? Maybe so but hidden within the “standard language” can be language that shifts the other party’s risk to you. 

Let’s review some so-called “standard language” in the following scenarios: 

• Scenario 1: The contract states that you have examined pre-existing drawings, design documents and site conditions and you assume the risk of them. Did you know that you are arguably vouching for the designs of others and the pre-existing site conditions, and you are taking on all of the risks associated with them? 
• Scenario 2: The contract requires you to double check the technical requirements or regulatory compliance of the design that the other party has sent to you. Your company has arguably guaranteed that the technical solution that your company has requested for its business is the right one and/or that its design parameters comply with all regulatory requirements. 
• Scenario 3: Here’s my favorite one: A statement by the other party that it will not be responsible for the accuracy of its own information. What? But it’s their information! 

All of these scenarios unreasonably transfer risk from the customer to you.  

But You Really Need This Project

I know what you’re thinking. You really need this project. Maybe you really want to enter into an agreement with the customer or you don’t have the bargaining power to completely revise or rewrite the contract. That’s okay.  

But consider this: By adding a few qualifying words to the “standard language,” you will help your company immensely. 

Clarifying that you have only examined pre-existing designs and site conditions for “open and obvious,” “fundamental” or “known” problems with the designs provided or site conditions, greatly limits your risk. 

You have taken on so many risks with the pandemic. Don’t let pre-existing designs, site conditions or inaccuracies in the other party’s information be one of them. 

Janeia Brounson is an attorney with Faegre Drinker, counsel to the CSIA and many of its members. She can be reached at Janeia.Brounson@faegredrinker.com. For more information about the CSIA Legal Plan for CSIA members, visit the website. 

This article was originally published in the April 2021 issue of the CSIA Newsletter. 

Photo credit: People Creations/PIKWIZARD