Weston Hurd’s Architects & Engineers Newsletter (Spring 2016) includes articles written by David Patterson and Frederick Bills that focus on: Assignability of Designer’s Contracts; The Loaned-Servant Doctrine and Design Professionals; The Clause Corner; and Are Design Firms Subject to Public Records Request?
The newsletter can be found by clicking: 2016 – Architects and Engineers Newsletter – April
Excerpts from the articles include:
ASSIGNABILITY OF DESIGNER’S CONTRACTS
Assignment of the Owner/Architect Agreement
Section 10.3 of the AIA B101 – 2007 precludes the owner or the architect from assigning the contract to a third-party without the written consent of the other party to the owner/architect agreement. This provision protects the owner from having to deal with a design firm other than the one that was originally selected for the project. By the same token, it protects the architect from having to deal with a different entity than the entity with whom the architect agreed to provide design services. Without such a provision in the contract, either party could assign their contractual rights and obligations to a third-party who had no involvement in the original planning or designing. When an assignment occurs, the party taking on the assignment (assignee) assumes all the rights and obligations of the assigning party (assignor). The assignee steps into the shoes of the assignor and assumes all of the assignor’s contractual obligations and rights. The Restatement Second of Contracts defines an assignment of a right as “a manifestation of the assignors’ intention to transfer it by virtue of which the assignors’ right to performance by the obligor is extinguished in whole or in part and the assignee acquires the right to such performance.” Restatement Second of Contracts, Section 317 provides: (1) an assignor may assign any right unless doing so would materially change the obligation of the obligor, materially burden him, increase risks, or otherwise diminish the value to him of the original contract; (2) statute of public policy forbids assignments; or (3) the contract itself precludes assignment. READ MORE 2016 – Architects and Engineers Newsletter – April
THE LOANED-SERVANT DOCTRINE AND DESIGN PROFESSIONALS:
CONTRACTUAL CONSIDERATIONS IN LOANING EMPLOYEES TO ANOTHER DESIGN FIRM
Given the present state of the design industry field and the economy, it is not uncommon for architectural and engineering firms to at times loan or lease one or more of their employees to another firm to assist in completing the design of a project. The loaned employee may have expertise that a firm lacks specific to a particular type of design, or a firm may simply require additional staff to complete its scope of work on a project. Whatever the case, it is important for design firms to understand how loaned employees on a project may impact their liability exposure, and the manner in which firms loan employees to another can have a significant impact. In Ohio, the loaned-servant doctrine may affect the loaning firm’s liability.
The loaned-servant doctrine generally provides that an employee loaned by one employer (the “general employer”) to another employer for the purpose of completing a particular scope of work must be considered an employee of the borrowing employer for all acts completed within that particular scope of work, even though the employee remains employed by the general employer during that period. Halkias v.Wyckoff Co. (1943), 141 Ohio St. 139. The doctrine has various applications depending on the posture of a case. READ MORE 2016 – Architects and Engineers Newsletter – April
THE CLAUSE CORNER
When tasked with loaning an employee to another design firm for completion of a particular project, the loaning design firm should specify its agreement with the borrowing firm in the form of a contract. The contract should outline the scope of work to be completed by the borrowed employee and should include language similar to the following:
In return for good and valuable consideration, the sufficiency of which is acknowledged by the Parties to this Contract, Loaning Design Firm hereby agrees to provide the Employee to Borrowing Design Firm on a limited basis for the completion of Project X. The Loaning Design Firm and Borrowing Design Firm have knowingly entered into this agreement with the understanding that, for the purposes of completing Project X, the Employee will be under the exclusive control of the Borrowing Design Firm for completion of the Employee’s scope of work related to Project X. The Parties hereto state and acknowledge the following:
- The use of the Employee by the Borrowing Design Firm shall be limited to the completion of Project X;
- The Employee offers a unique set of skills particular to the completion of Project X;
- The tools and/or instrumentalities necessary for the Employee to complete his scope of work shall be provided by the Borrowing Design Firm. Any use of tools and/or instrumentalities provided by the Loaning Design Firm by the Employee for the completion of Project X will be compensated for by the Borrowing Design Firm;
- The Borrowing Design Firm agrees to provide professional liability insurance, workers’ compensation insurance, workers’ compensation coverage, and any other insurance that may be required by law and/or pursuant to the terms of the Project X contract to cover the Employee’s scope of work in relationship to Project X;
- The Borrowing Design Firm agrees to defend and indemnify the Loaning Design Firm for any and all claims and/or causes of action which may arise from the Employee’s scope of work on Project X;
- The Borrowing Design Firm shall compensate the Loaning Design Firm for use of the Employee for a fee in X amount and at an hourly rate of X.
ARE DESIGN FIRMS SUBJECT TO PUBLIC RECORDS REQUEST?
Your design firm has recently completed a project for a local school district and now receives a public records request from the local paper, taxpayer, or disgruntled contractor. Your immediate reaction is that your firm is not a public entity and therefore not subject to a public records request. Your response to the requesting entity is to advise them that you are not subject to the request and therefore do not intend to provide the requested documents. The requesting authority then files a mandamus action in common pleas court asking for the records to be produced, but also requesting court costs, attorneys’ fees, and statutory damages.
The Ohio Record Act, R.C. 149.43 provides the following:
“Public Record” means records kept by any public office, including, but not limited to, state, county, city, village, township, and school district units, and records pertaining to the delivery of educational services by an alternative school in this state kept by the non-profit or for-profit entity operating the alternative school pursuant to Section 3313.533 of the Revised Code.” READ MORE 2016 – Architects and Engineers Newsletter – April
