September 1, 2015
by Elsa Lam
At this summer’s RAIC Festival in Calgary, I convened a panel discussion about the rise of non-standard contracts, and how architects can fight for fairer conditions.
Architects in practices of all sizes are being pressured to sign agreements containing multiple pages of supplementary conditions, many of which depart from standard architectural practice. The unspoken threat: if they don’t sign, their client will find someone else to do the job.
Panellist Bill Birdsell FRAIC, former president of the Ontario Association of Architects, emphasizes that it’s important to get the contract right from the beginning. “A standard architect-client agreement aligns properly with the other consultant agreements and with the construction contract,” he says. In his small Guelph-based practice, he has seen many public-sector contracts that assign undue responsibility to the architect, including liability for the work of the client’s other consultants. “Many architects I speak to believe in their relationship with a project manager, whose working goal is to ensure that a project is managed fairly, regardless of the wording in the contract,” says Birdsell. “However, if the project goes significantly wrong, they’d be the first to get thrown under the bus. As the architect, you’d then need to defend yourself from undue responsibility over the project’s failures.
Some other conditions to avoid in new contracts include terms that hold architects to a higher standard of care than normal, terms that allow a client to withhold payment for a variety of arbitrary reasons, vague scopes of services, and terms that fail to define the limitations of liability.
For Vancouver-based architect Michael Green FRAIC, copyright terms comprise another issue that comes up frequently. Under the federal Copyright Act, architects maintain ownership of copyright in their work. Some contracts, however, ask architects to surrender this copyright to the client. “It’s a right that no architect should ever feel compelled to waive,” says Green. Copyright prevents clients from replicating building designs without properly compensating the architect. “That sounds rare but it does happen,” says Green. He adds that in some cases, an unscrupulous client could actually sell a design to others who replicate it. “If an architect chooses to waive his copyright then it is advisable to do so with strict conditions for reuse, including payment to the architect.”
Doug McConnell FRAIC, an Edmonton-based principal at DIALOG, is a co-chair of the Consulting Architects of Alberta (CAA). “Contracts are one of the core issues that the CAA was founded to address,” he says. The CAA works to advocate for the business interests of architects in parallel to the regulatory role of the Alberta Association of Architects. One of its key subcommittees analyzes contracts and negotiates with clients for fairer agreements. Often, clients are amenable to change when concerns are presented by the organization. If there are outstanding issues, the CAA warns its members against signing the contract.
While Alberta architects have the CAA to help, McConnell says that a number of other tools are available for architects to negotiate better contracts. “Use your insurer as a resource,” he advises, as provincial insurers can highlight clauses that aren’t covered. He also suggests being careful “not to overpromise” in contracts, for instance, by guaranteeing that a building will hit a designated LEED certification level.
McConnell says that before a DIALOG project team signs a contract, other principals are assigned to independently evaluate it. That provides much needed perspective, as the team that won a project can sometimes willfully overlook contract flaws.
Sometimes negotiations must happen earlier in the process. Many RFPs now ask bidders to assent to the contract in advance. Green says that it can be possible to defer consent. His firm will often use the phrase, “Upon acceptance, the contract will be reviewed in accordance with insurability and industry standards of practice.” To clarify the status of multiple documents, his firm adds a sentence to the final contract, stating: “This document supersedes and replaces all existing agreements.”
Throughout the panel, it became clear that unfair contracts are affecting practices across the country. Firms usually feel alone and are wary of sharing their concerns with potential competitors. But as the CAA’s success has demonstrated, there is power in getting together as an industry to stand up to nonstandard contracts, and defend our professional and legal rights.