April 2014

LEGAL BEAT
Short Form of Agreement, California Contracts

BY ARTHUR SCHWARTZ, DEPUTY EXECUTIVE DIRECTOR AND GENERAL COUNSEL

Q

I am a professional engineer in the process of being retained by a client for a very limited scope of services. I am familiar with the EJCDC Standard Form of Agreement Between Owner and Engineer for Professional Services (E-500), but as a practical matter, the document is much too lengthy and comprehensive for the nature of the engagement with this client. Further, the client is resistant to signing the document. Is there a shorter alternative that I can use for this smaller project? (Montana)

AYes. EJCDC Short Form of Agreement Between Owner and Engineer for Professional Services (E-520) is intended for use on projects of limited scope and complexity. It contains the core contractual elements—such as provisions concerning time for completion of services, compensation, termination, standard of care, safety responsibility, ownership of design documents—as well as a standard limitation of liability provision.

The short form is less comprehensive than most of EJCDC’s other professional services agreements. For example, there is merely a blank space for scope of services, rather than a detailed menu of standard services items, such as that found in Exhibit A, Engineer’s Services, in E-500. Additionally, the short form’s compensation options are more limited than under the comprehensive standard professional services agreements. However, please be advised that insurance and indemnification are among the topics not addressed in the short form.

QI recently became licensed in California and understand that the state has a specific law that requires a California professional engineer to use a written contract when contracting to provide professional services to a client. Can you provide me with some of the specific details? (Nevada)

A

Yes. Under the law, before a professional engineer begins work, he or she must sign a written contract with their client, or the client’s representative, with some exceptions.

The written contract must include, but not be limited to, all of the following:

• A description of services to be provided by the professional engineer;
• A description of any basis of compensation applicable to the contract, and the method of payment agreed upon by the parties;
• The name, address, and license or certificate number of the PE and the name and address of the client;
• A description of the procedure that the PE and the client will use to accommodate additional services; and
• A description of the procedure to be used by any party to terminate the contract.

A written contract is not required under the following circumstances:

• The client will not be compensating the PE for his or her services;
• The PE has a current or prior contractual relationship with the client to provide professional services, and the client has paid the PE all of the fees that are due under that contract;
• The client knowingly states in writing, after full disclosure of this requirement, that a written contract need not be used; or
• Professional services are rendered by a professional engineer to another professional engineer or professional land surveyor; an architect; a contractor; a geologist or geophysicist; a manufacturing, mining, public utility, research and development, or other industrial corporation, if the services are provided in connection with or incidental to the products, systems, or services of that corporation or its affiliates; or a public agency.

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.