Legal Question in Construction Law in California

I'm remodeling a home in CA and need to sign contracts with a licensed structural engineer and a licensed architect. There are clauses in the contracts (see example below) limiting their liability to either fees paid or $25,000. Are there laws in CA that supersede these clauses so that the consultants are liable for errors and omissions even if the client signs such a waiver? Thank you!

Limitation of Liability: In recognition of the relative risks, rewards and benefits

of the project to both the Client and the Consultant, the risks have been allocated

such that the Client agrees that to the fullest extent permitted by law, the

Consultant�s total liability to the Client for any and all injuries, damages, claims,

losses, expenses or claim expenses arising out of this agreement from any

cause or causes, shall not exceed $25,000. Such causes include but are not

limited to, the Consultant�s negligence, errors, omissions, strict liability, breach of

contract or breach of warranty.


Asked on 12/22/12, 10:02 am

1 Answer from Attorneys

Gary Redenbacher Redenbacher & Brown, LLP

This is a complicated question requiring a complicated answer. I tell my clients that they should tell the architect or engineer to either strike the clause or you'll find someone else. If the engineer or architect carries professional liability insurance, they are covered for mistakes so don't need the limitation clause. The clause tells me that they have no confidence in their work. Unfortunately, these clauses are usually upheld. That being said, there are certain times when these clauses will not be upheld. The best known exception is if the engineer or architect violates a statute. For example, if the law says that an engineer must design to certain standards and it is found that he failed to design to those standards, then, at least in theory he has violated a statute and the limitation will be thrown out. (You never know, however, what a judge will say. Remember that judges are usually appointed and not necessarily for their legal acumen.) There are also cases where public policy may invalidate the clause. The legal analysis is fairly involved and the cases are not always clear on exactly which situations qualify. Bottom line is that in most cases, these clauses will be upheld so it is best to negotiate the elimination of these clauses or go to an engineer or architect who has enough confidence in their work that they don't feel the need to hide behind these clauses. One technique that has worked for me in the past is to limit liability to the limits of their liability insurance.

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Answered on 12/22/12, 11:38 am


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