Vol. 9 No. 1		January 1990

If there is no contract, attorneys reason, no duty is owed. This is one way of denying responsibility. Your principal interest, however, is not in avoiding responsibility or walking away from an agreement, but in understanding how to formulate agreements which are fair and equitable and which withstand the tests of time.

A contract does not have to be in writing to be enforceable. It does have to be in writing to be clear. In the event of a dispute over the obligations of the parties to an unwritten understanding, the courts will step in, if necessary, to determine the scope and intent of the agreement. They will do so based on the evidence at hand--existing documentation, firsthand testimony, and the actions of the parties.

You may have close, personal relationships with clients with whom you operate on the basis of an understanding none would ever consider breaching. Perhaps you have never had written agreements with these clients? Perhaps you have never encountered problems on their projects? Why would you want to disrupt long-standing relationships by suggesting a change now?

The real problem is, you may be betting your professional reputation and your personal assets against the doubtful probability that, years after the fact, both you and your client will have the same recollection as to exactly what it was you once agreed upon. Even with the best of intentions going in, there is always the risk that your memories will be clouded by intervening events. There is also the risk that one of you may not be available at some future point in time to confirm what your original intent really was.

You might explain to your client that, even though you may be the very best of friends now, your spouses or associates may not be later. Their attorneys certainly will not be if called upon to represent their diverging interests. You might also explain that others may step forward to claim that one of you has somehow breached a duty to them. The first place they will look to establish that duty is your agreement, and neither of you will want to have to rely on faded memories to assist the court in its efforts to discover just what that agreement encompassed.

The traditional legal explanation of a contract is this: A contract is a promise or a set of promises, for breach of which the law gives a remedy and for the performance of which the law recognizes a duty. From an attorney's point of view, a contract is a legally enforceable agreement. From your point of view, it is something much more tangible. A clear, written understanding between you and your client serves a four-fold purpose:

1. It is a reflection of your understanding of the scope of your work--what your obligations really are, what you expect of your client, and how much and when you will be paid.

2. It is also a reflection of your client's understanding of your responsibilities and of his or her obligations to you.

3. It is one form of communication between you, your consultants, and your project staff as to what has been promised--so that each, in turn, can contribute to the fulfilling of those promises.

4. Finally, it is a record of a meeting of the minds, one which, in the event of a later dispute, two hired guns will use in their efforts to explain to a jury of well-meaning citizens, most of whom know little or nothing about what goes on in a building project, just what it was that each of you should have done.

It is this final use of an agreement with which lawyers most concern themselves. But, once you and your client have reached this stage, you have both lost. The only winners are the attorneys, who join your dispute with a certain amount of relish and walk away from it with most of the spoils.

There is an additional, but equally compelling reason for reducing your agreements to writing. It lies in the increasing tendency of the courts to find that architects and engineers have responsibilities to others not a party to their contracts. For some time, those others have included the estate of a deceased client, a new owner of the client's interests, and the general public.

More recently, the courts have found little difficulty in expanding your duties to include virtually anyone who may have a reasonable right to rely on what you do. Such duties have been extended to the general contractor, subcontractors, injured workers, sureties, and subsequent purchasers of the completed project.

Whether or not an expanded duty is actually found often depends upon the expectations you create, the responsibilities you assume, and the responsibilities you define in your agreement as belonging to someone else--responsibility for the means and methods of construction, for example, or for safety on the jobsite. If a dispute should erupt on the job, you can expect to find your contract called into service as a reference document by those seeking to determine whether or not you might be responsible for someone else's performance. All reference documents best serve their purpose in written form.

The American Institute of Architects (AIA) and the Engineers' Joint Contracts Document Committee (EJCDC) have invested enormous resources in the development of standard contract documents which attempt to address, fairly and equitably, issues of great importance to all parties to a construction project. Start with these documents. With the help of your attorney, use them as a foundation for tailoring your agreement to the specific project at hand. Your goal is a written understanding which truly reflects a meeting of the minds.

The negotiation of that agreement is the very best opportunity you will have to explain the limitations on your ability to control the risk of construction. You should be prepared to discuss each provision in the standard forms you use. If you are not comfortable in doing so, you might want to brush up on your skills. There are guides available to help.

Both the AIA and the EJCDC have published detailed commentaries on their standard agreements, and both have prepared abbreviated standard forms for use on projects of limited scope and complexity. If you understand these tools and use them well, both you and your clients will be well served. The very best agreements are those which never have to be called upon for resolution of a dispute.