The scope and expense of the modern construction project virtually guarantee that a contract termination will lead to litigation. The amount of money at stake often dictates the sweep of the litigation and aggrieved parties are prone to include every person that had any project responsibility, including design professionals. With the importance of contractual privity and the application of the economic-loss doctrine waning, plaintiffs have made significant inroads in developing claims and theories of liability against design professionals. Though the theories that courts have adopted to permit these claims vary, the result is that claimants now have additional pockets to look to for compensation for losses sustained during construction projects. Design professionals continue to have defenses, but some courts have shown a willingness to disregard contractual attempts to limit the design professional’s scope of work and liability. Without bright lines setting the boundaries of the duties owed to the respective parties, design professionals are often left wondering whether their jurisdiction will honor the parties’ contract or find a way to reach a result that the court deems fair.
A design professional’s ability to manage and overcome the potential risks of contractor termination is largely determined by a clearly defined scope of services, effective communications and good documentation. The design professional is advised to seek legal assistance familiar with applicable state laws where the project is located for design services contract preparation, maintain effective and ongoing communications with project participants, and thoroughly document all actions and services consistent with good professional practice.