Melissa Dewey Brumback | Construction Law in North Carolina
Architects and Engineers are sometimes pleasantly surprised to find out that they, also, can terminate those crazy, hard to deal with Owners—at least, if the Owners fail to make payments as required.
“It’s not you, it’s me!” (It’s you)
You can also terminate for Owner delays to the work, or where you think the contractor should be fired but the Owner disagrees. Again, the standard 7 days written notice is required. (See B101 §9.4).
Do you have to walk off the job if they are not paying you? No—you could exercise the smaller remedy of suspending services (with 7 days written notice) until payments are caught up or the contract performance is corrected by the Owner. (See B101 §9.1). Suspension rather than outright termination is a softer approach when working with an owner you do not want to burn (too many) bridges with.
Can the Owner use your plans and specs?
The default AIA design professional contract provides that the drawings and specifications are the copyrighted work of the DP (B101 §7.2) and that the Owner is given the limited, nonexclusive license to use them only for the Project. (B101 §7.3). However, all bets are off if you quit because they are not paying you. [Under ConsensusDocs, copyright issues are essentially the same].
In a “rightful termination”, the owner’s license to use your work terminates.
So, you should remind the Owner– in writing, of course– that they are forbidden from using your plans. Now, you can negotiate a release of the documents in exchange for a release of liability or indemnity agreement. The AIA provides for a “licensing fee” under B101 §11.9.
The right to your designs is a critical one—protect it, and use it to protect yourself. Consider both the licensing fee and an indemnity agreement to protect you in the case where you are leaving a project that is still being constructed.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.