Vol. 2 No. 6		June 1983

In the heady atmosphere that accompanies the bringing in of a new job, nothing seems quite so important as signing the agreement and getting on with the work. Yet, your contract with the owner is almost certain to raise a number of issues, quite apart from your fee, which could prove to be critically important to you later on. One is the question of ownership of documents.

It is not uncommon for clients to request ownership of your plans and specifications. Corporate clients assume they will somehow be of future value, and agencies of government reason that the public, having paid for your services, has a right to "own" the result. What these clients may only vaguely understand is the burden of potential liability you have to take into account in responding to their requests.

The risk can be substantial. Fortunately, you can go a long way toward minimizing this risk, if you treat the question of ownership as the serious consideration it is, and if you take the trouble to convey to your clients an understanding of the underlying liability problems it entails.

There are three major concerns. The first is that someone, at some unknown point in the future, will reuse your documents without your knowledge, and a loss will ensue. The second is an extension of the first. It is the possibility that, by virtue of their "sale" and reuse (and in light of a pressing need to compensate an injured party for a loss), your plans and specifications will somehow be construed by a court to be products, subject to strict liability standards, rather than the instruments of professional service you intended them to be. In either case, and certainly in the latter, it would not be surprising for the court to find you liable for the loss--regardless of the fact that you were in no position to do anything to prevent it.

The third concern is more immediate. Consider the possibility, however remote, that your client might choose to terminate your services during the course of the job. If he or she were in a position to demand that you turn over your partially completed work, you could have no recourse but to comply. If so, you would be likely to find yourself with very little leverage left to protect your substantial interest in seeing the project through to a successful completion.

Retain ownership of your plans and specifications, if you can. They are, after all, an expression of your own, unique concepts and ideas. In this sense, they are not "for sale," but only available in a particular form for the solution of a specific problem. Otherwise, they properly belong to you, and you have a vital professional and financial interest in protecting against their misuse.

Most owners have no intention of reusing your plans and specifications, and in response to your concerns, they will tell you so. This is beside the point. In spite of the best of intentions, your client cannot guarantee that someone, unknowingly or unscrupulously, might not take it upon himself to use the documents on another site or to modify them for an addition to the project. This is a risk you are in no position to assume.

If your client remains unpersuaded and you find yourself with no alternative but to agree to the transfer of ownership, take great care in negotiating the protections you need in return. This will not only help to reduce your risk to a tolerable level, but it will give you an opportunity to make certain your client understands the dangers of using your documents without your participation. In the long run, your candor may turn out to be the most important benefit of the negotiation process: You will have an informed client, and rather than having left open an invitation to future problems, you may have paved the way for future work.

Even without the help of an unfair contract, enough unexpected problems arise in design and construction, that a good deal of caution seems advisable with problems that can be anticipated. With this objective in mind, here are a number of principles you may want to consider the next time the ownership of documents question arises in connection with one of your contracts:

1. If your contract is silent on the subject, most courts will construe the intent to have been a transfer of ownership to your client. If this is not your intent, it is important that you include in your contract a provision that makes clear that the documents belong to you.

2. Such a provision needs to be carefully drafted, and your own attorney is in the best position to suggest language that will most appropriately meet your needs. There are, however, three basic considerations you may want to address:

   • The provision should identify the documents as instruments of professional service.

   • It should make clear that the documents are intended for use only in connection with the project which is the subject of the agreement.

   • It should hold you harmless and indemnify you against all losses, damages, and costs arising out of any use or reuse of the documents, by the owner or by agents of the owner, not specifically authorized by you in writing.

3. You might want to further protect your interests by copyrighting your plans and specifications. It requires only that you affix, "Copyright 19xx," to your documents, followed by the name of your firm.

4. Should you be unsuccessful in convincing the owner that your plans and specifications properly belong to you, recognize that, in giving in, you are making a major concession. You have a reasonable right to expect something in return. At a minimum, this might include the three contractual considerations identified above.

5. Recognize, too, that it makes no sense at all for you to agree to transfer ownership in the documents at any point other than completion of construction. As long as you retain control, you will be in a position to help your client fully meet his or her obligations under your agreement. These include keeping you on the job through the end of the construction phase of the work and paying you for the services you render.

6. Finally, you may want to consider a "belt and suspenders" approach designed to discourage all of those unknown others who might be tempted to use your work product without your knowledge. Some architects and engineers seek to do this by including a statement, on each sheet of their drawings and on the cover sheet to their specifications, warning against unauthorized reuse. Considering the risks involved, both belt and suspenders may well be called for.

For inquiries or problems please contact us via e-mail at Earleen Thomas or call us directly at 800-705-7742.
© 2000 Hilb Rogal & Hobbs Professional Practice Insurance Brokers, Inc. All Rights Reserved. California License #0641361.