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Project Contracts & Conflicts April 13, 2009

Posted by Jason in Insider's View Relapses.
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Those of us that have been in the workforce for at least a few years likely have become familiar with various methods of conflict identification and resolution. Most of us are fortunate enough to rarely, if ever, have encountered significant conflict during a project. Those who have, whether with a co-worker or client, can attest that it is a very unpleasant experience. I have not yet had to resolve a dispute with attorneys or legal proceedings, but with decades left in my career, I would bet that such a situation awaits. I will do everything I can up until that point to avoid such circumstances.

How can we reduce the chances that we will end up in a legal battle in the event something goes wrong with one of our projects? For that matter, how can we alleviate the “everyday” conflicts that seem to arise at the most inopportune time? My experiences have included several disagreements with clients and contractors about what was expected and who was supposed to have performed a particular task. In general, those disagreements have been textbook conflicts in that they stemmed directly from a classic source: substandard or loosely executed contracts.

In the professional engineer’s course of business, tens or even hundreds of contracts may be created and executed in a year. Some may be minor (even verbal), while others may represent years worth of work. Small as they may be, every contract carries the potential for ambiguity or dispute before, during, and after the work is done. Since it is the professional that has the background knowledge to answer the many “what-if” questions, it falls to that professional to create most, if not all, of the contract language. In this way, yet another discipline is added to the engineer’s repertoire: quasi-attorney. Unfortunately, most engineers are ill-equipped to craft a solid contract that can resist typical disputes fully, let alone examination in a court of law.

Many firms wisely defer such legal matters to their own attorneys, who can work with the managers to create a document that meets their needs while protecting their interests. Others might add to existing contracts in a piecemeal fashion to resolve ambiguities that become apparent over time. Whatever method is chosen, the fundamentals of contracts rarely change. Every contract must define clearly the parties involved, the work to be done, how that work is to be paid for, and what happens if either of those doesn’t occur. Most contracts build on these basics to provide additional background information, definitions, limitations, and exclusions to clarify the scope of work.

Engineering, like other professions, deals on a regular basis with technical subjects that may not easily be understood by those not involved with the project. Nevertheless, it is important to create contract documents that specify the scope and conditions not only to the project team, but also to any outsider that may be called upon to interpret the language. Depending on your particular state’s laws, there may be specific wording that means one thing in one place and something else in another. Firms that do business in multiple locations are wise to consult attorneys that are familiar with the local law. Even the best contracts are not immune from misinterpretation. With a well-written one, however, the professional is starting out on the right foot toward avoiding disputes.

— from Insider’s View, August 2006

You can find a letter to the editor in response at http://www.cenews.com/article.asp?id=1304 — JB



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