KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Can you be liable for contract drawings and specs prepared by others?
October 7, 2017
October 7, 2017
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Can you be liable for contract drawings and specs prepared by others?
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The short answer is yes. The long answer is also yes. You can be, but you don't have to be. It's up to you. What did you agree to?
If you sign some subscriber agreements, maybe an AIA form or some rip-off variation, you may have very well have agreed to be responsible for any drawings, plans, specifications and cite conditions, even if you had nothing to do with any of those things. If you agree to be responsible then why would you be surprised that a court would hold you to your bargain?
Of course your form agreement, especially if you use the Standard Form Agreements [the All in One or other agreements], you will not have this kind of exposure. And why should you?
What happens if you submit the plans and specs, say for a fire alarm system, and the fire department or fire marshal or fire AHJ approves them? Maybe you finish the installation and the AHJ signs off and issues final approval. But what if the the AHJ catches the mistake, the one you made and the one the AHJ missed, and insists on changes, what you will want to call "extras". Who is going to pay to correct your mistake, or for the change in position of the AHJ. Well I can tell you for sure that it won't be the AHJ.
So that leaves you, the subscriber or maybe a third party who prepared the plans and specification and signed off on them. In most jurisdictions it's the alarm company who prepares and files the plans. In other jurisdictions, like New York, only an engineer or architect can sign off on the plans. But most of the time it's going to come down to you and the subscriber. And keep in mind at the moment I am discussing mistakes or change in position by the AHJ for your plans and your work. I started the article discussing your liability for plans and specs prepared by others for their work, maybe having nothing to do with your work, other than the fact that your were on the same job at the same time [so why didn't you let the owner or architect know that you saw the other tradesman do something you knew was wrong].
By agreement you can undertake many responsibilities and if you're not careful reading the fine print that's exactly what you will do. The good news is that most of the responsibilities may be insured and covered by your insurance carrier. The bad news is that some of the things you agreed to that exposes you to liability may not be covered by insurance, leaving you wide open to financial ruin, and not just on that job.
I know that not all your customers or subscribers will agree to sign your contract, at all or not without significant changes. That's no reason not to have a form contract of your own. If you don't have one then none of your customers will be signing your contract, because you don't have one. If you have a contract that is so unprofessional on its face then you will have difficulty getting it signed. If you "merge" your customers information in your form, rather than having it appear as a Standard Form, you will have difficulty getting it signed because the customer will think you prepared that contract just for that customer, and the customer will be more inclined to read it or have its counsel read it. It's not that I am encouraging you to not permit your subscribers to read the contract. I am suggesting that when presented with what appears on its face to be a Standardize Form Agreement used by the industry, it's more likely the customer will focus on the provisions added for that customer's specific transaction. No reason to read the "fine print" because it's accepted and commonly used industry provisions. And, if you use the Standard Form Agreements that happens to be true.
Trust me, [I'm a lawyer] no one has ever regretted getting and using the Standard Form Agreements. Plenty have regretted not getting the forms, usually right after they have
- been sued by a subscriber for a loss
- been sued by a subscriber's insurance company for a loss
- sued by a former employee for employment issues
- been screwed by a former employee who steals confidential information and then competes unfairly
- been turned down by a central station who won't accept the way you do business without proper contracts
- been turned down by an industry E&O insurance carrier who won't insure you because of your contracts or no contracts
- can't seem to find a broker interested in taking you on to look for a buyer because of the way you do business without proper contracts
- can't seem to find a buyer interested in offering you anything or more than pocket change for your accounts
It's time to do something for yourself, something smart. Update your contracts today, before you make your next sale. Call our Contract Administrator Eileen Wagda at 516 747 6700 x 312 and she will assist with the selection of the contracts you need. No better time that today. Order contracts here: www.alarmcontracts.com
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com