May 2014

LEGAL BEAT
Expiration Dates, Stop Work

Q

 I am a professional engineer and my firm provides signed and sealed engineering drawings for a client’s use in the manufacturing processes. My firm provides the client with a new set of drawings at the beginning of each year and the client then pays my firm for the use of the drawings on an annual basis. Would it be legally acceptable for my firm to put a note on our drawings stating that the signature and seal will expire a year from the date that the drawings are signed and sealed? (New York)

A

While there are ways to accomplish what you are seeking, the method you propose would not be effective. As a general rule, the inclusion of an “expiration” date on your sealed engineering drawings would not be legally recognized and could be confusing or misinterpreted.

A more effective approach would be to have a formal written agreement prepared between you and your client setting forth the terms and conditions of your engagement. In the written agreement, you should include language specifying that your firm retains sole and exclusive ownership over the engineering drawings along with the intellectual property contained therein, and that your firm agrees to grant the client a “limited license” to use the signed and sealed engineering drawings solely in its manufacturing processes for a one year period, with all rights reverting to your firm at the expiration of the one year period. This will protect you and your firm against the possibility of use of your work beyond the client’s manufacturing processes and also limit the client’s authorized use to the one year period.

Q

I am a professional engineer in private practice and one of our public clients recently advised my firm that on all of its publicly funded projects, they will now require my firm to “stop work” if a load of concrete is out of specifications for slump and temperature. The agency is claiming that this is a requirement from the EJCDC documents. I believe EJCDC requires the engineer to reject the load, which is much different than stopping work. I frequently reject work by putting the contractor on notice that the work, materials, installation, or equipment does not meet specifications; then it is up to the contractor to prove it is acceptable. We reject work by notifying the contractor and owner and not signing the pay request. Is this correct? (Missouri)

A

Yes. Stopping work is an extreme measure with serious potential liabilities. The EJCDC documents do not give the engineer any power to stop the work. The public agency should be very cautious about attempting to force engineering firms to stop the work on a project. Under the EJCDC documents, the engineer’s services include rejecting work that does not conform to the requirements of the contract documents. This is a much less dramatic action, usually involving only a discrete portion of the overall work. The contractor is free to continue with other portions of the work, and the owner (not the engineer) decides whether to insist that the contractor correct the defects or to accept the work despite the defects.

The EJCDC Standard Form of Agreement between Owner and Engineer for Professional Services (E-500—2014) states: “Exhibit A, A1.05. A. 10. Defective Work: Reject Work if, on the basis of Engineer’s observations, Engineer believes that such Work is defective under the terms and standards set forth in the Construction Contract Documents. Provide recommendations to Owner regarding whether Contractor should correct such Work or remove and replace such Work, or whether Owner should consider accepting such Work as provided in the Construction Contract Documents.”

Responses are based on questions posed to NSPE Legal Counsel Arthur Schwartz.

Are you an NSPE member with a legal question for this column? Send it to Arthur Schwartz, 1420 King St., Alexandria, VA 22314-2794; fax 703-836-4875; or e-mail [email protected].

These questions and answers do not, in any way, constitute legal advice. Always consult your own attorney before reaching any conclusions or acting upon any information presented in this forum. Also note that legal precedents change. An answer based on a case from several years ago may have a new perspective today.

For more than 25 years, Schwartz has written and spoken on a variety of professional practice issues and brings special insight into the field of engineering ethics.