Standard of Care: Confronting the Errors-and-Omissions Taboo up Front

0By Dale Munhall, AIA,

0When should the owner pay to fix imperfections in the design process? When should the architect pay? What is the difference between “errors” and “omissions”, and how can inconsistencies be resolved?

0These age-old questions have a single, deceptively simple answer: it depends—on the circumstances, on the contract and, perhaps most of all, on whether or not the Owner and Architect started out with shared expectations on the seemingly arcane subject of Standard of Care.

The Standard of Care

0The Standard of Care for professional design services is defined by the American Institute of Architects as:

0“The Architect shall perform its services consistent with the professional skill and care ordinarily provided by architects practicing in the same or similar locality under the same or similar circumstances. The Architect shall perform its services as expeditiously as is consistent with such professional skill and care and the orderly progress of the Project.”

0This traditional definition doesn’t provide explicit details, and many clients (as well as many architects) fail to understand its implications. Thus, the whole subject of expectations and challenges facing the project—especially errors and omissions—have become unspoken taboos.

0There is a better way: the owner and their newly-selected architect should sit down at the beginning of contract negotiations and openly discuss each other’s expectations and concerns for the upcoming project. This may sound obvious and easy, but it is seldom done, even though a candid discussion of the following points could prevent the main causes of conflicting expectations.

Product vs. Service

0Many owners have a misconception that creating a new building is the same as buying a manufactured product like an automobile. However, design is NOT a commodity like cars or bricks or windows. Design is performed by architects as an intangible professional service, and is subject to the same human limitations as the practice of medicine, law or accounting. Moreover, design documents are NOT products, either—drawings and specifications are simply instruments of the architect’s service, defined in law as intangible intellectual property.

Manufactured products are the culmination of repeated modification and refinement, whereas each architectural design is a unique one-of-a-kind prototype, and thus can never be 100 percent perfected in advance of construction. Some amount of mid-course adjustment is always required (especially for renovations, additions or complex project types, and whenever fast-track delivery is involved).

Errors (and Inconsistencies)

0Just how ‘perfect’ is a design required to be? Some owners believe that any change order which is due to an error or inconsistency in the design documents should be paid for by the architect, 100 percent, from the first dollar. However, neither the professional Standard of Care nor the nature of professional service would suggest that design has to be, or even can be, perfect. Nor does the law require perfection. Logically, then, some degree of human imperfection is to be expected.

But, how much ‘imperfection’ is reasonable? Again, it depends—on factors like project complexity (the same glitch that amounts to 1% of a large project could be 10% of a small one), time and fee constraints, etc. Generally, greater perfection means more risk, so more design effort, more time—and more fee—will likely be required.

Does this mean architects never have any liability for their own mistakes? No, there definitely is a point—such as when the cost of errors exceed, perhaps, 3-5% of a substantial project—beyond which the architect could be held responsible to pay for the remedy.

Omissions

0The difference between an ‘error’ and an ‘omission’ is that the owner receives added benefit when something previously omitted is added into their project. By definition, the owner did not originally pay for anything not in the Construction Documents but is later recognized as necessary and thus must be added to the contract. The legal term for this is “betterment”, meaning the owner of the property receives something of benefit in return for additional cost—not something for nothing. Legal principles do not allow one party to unjustly benefit at the expense of another.

Although the law does not require design to be 100% perfect or documents to be wholly ‘complete’, design services do contractually have to be ‘sufficient’, meaning the architect should make corrections to drawings or provide details for the omitted item, and do it without additional compensation.

Conclusion

0Owner and Architect need to establish shared expectations before signing a design services contract that contains a realistic Standard of Care and mutual agreement on what constitutes a reasonable level of errors and omissions. The Owner should include an appropriate, funded, Owner’s Contingency to cover potential design imperfections and other unforeseen conditions, and then be prepared for a reasonable number of mid-course corrections that normally arise during construction.

About the Author: Dale Munhall, AIA, is Director of Construction Phase Services for Leo A Daly in their Omaha, Nebraska office. He can be reached at dlmunhall@leoadaly.com

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