Professional Services Contract.

[Mark Nahrgang]

I've got a question for those of you who use NACHI's professional Services contract for sub's. In the contract we have the following wording...

"The parties shall make a good faith effort to settle any dispute or claim arising under this Contract prior to engaging in litigation. If the parties fail to resolve such disputes or claims, each party hereby consents to enter non-binding mediation to be held in the jurisdiction in which the Inspector keeps its primary place of business, the cost of which is to be shared equally by the parties. If a satisfactory result is not obtained in mediation, litigation may then be pursued. In the event of a claim against either party, the claimant agrees to supply the other party with the following:

A. Written Notification. Written notification of adverse conditions within 14 days of discovery, and

B. Access to the Property. Access to the Property. "

My question is this...If there is a Dispute between myself and a contractor, how do we assure that the other individual can be given access to the property? It seems that the contractor is agreeing that I am giving them access, and that that he is giving me access. If neither of us own it, how does that work?

I'm sure I'm missing something very basic here, can someone point out the obvious to me?

Thanks
Mark

[Nick Gromicko]

Mark, I think you are correct on this one. I've emailed attorney Mark Cohen, the author of this contract and asked him if those should be removed.

[Nick Gromicko]

Mark, our attorneys agreed with you this morning and have modified that paragraph.

I'm renewing your membership next year for free.

Thank you.

Your point also made them realize that we as inspectors may need access to the property if our own consultant sues us and so have added language to the agreement between inspector and client to assure this access:

"Additionally, if there is a dispute between INSPECTOR and any consultant or third party arising out of INSPECTOR'S inspection, CLIENT agrees to provide INSPECTOR with reasonable access to the premises upon request by the INSPECTOR."

Thank you again!

[Mark Nahrgang]

Originally Posted by gromicko

Mark, our attorneys agreed with you this morning and have modified that paragraph.

I'm renewing your membership next year for free.

Thank you.

Your point also made them realize that we as inspectors may need access to the property if our own consultant sues us and so have added language to the agreement between inspector and client to assure this access:

"Additionally, if there is a dispute between INSPECTOR and any consultant or third party arising out of INSPECTOR'S inspection, CLIENT agrees to provide INSPECTOR with reasonable access to the premises upon request by the INSPECTOR."

Thank you again!

Cool, thanks Nick. I guess not being afraid of asking what might be a stupid question can be profitable some times.

[Nick Gromicko]

Good job. It lead to that other upgrade as well.

[Nick Gromicko]

P.S. I renewed you into 2010.

[Larry D. Kage]

Originally Posted by mnahrgang

I've got a question for those of you who use NACHI's professional Services contract for sub's.

Where can this be found?...link?

Thanks.

[Nick Gromicko]

www.nachi.org/comsop.htm

[Michael R. Boyett]

Very good Mark and thanks to Nick for accepting and acting on your observation.

[Larry D. Kage]

Originally Posted by gromicko

www.nachi.org/comsop.htm

http://www.nachi.org/comsop.htm#12

Thanks.

Nice find and follow through.

[Joe Farsetta]

Nick,

As long as MArk is looking this thing over, the following are my thoughts and opinions on specific clauses within the body of the doc. They are based on more than 20 years of contract negotiations.

Some thoughts:

2A. … Accordingly, the Consultant is not subject to the direct control of the Inspector. In the performance of the Services, the Consultant retains the right to control the methods and means of performance.

I personally find this clause to be troublesome, as for the purposes of the engagement, the consultant MUST be subject to the direct control of the Inspector. In effect, the Consultant is a sub-contractor. Additionally, the consultant only retains the right to control methods and means of performance if mutually agreed-to by the Inspector. Otherwise, the Consultant can use any means he/she wants, which may be contrary to the way in which the Inspector wants and expects the engagement to be executed and completed.

2B. …The Inspector acknowledges and authorizes the Consultant to engage the assistance of persons either under the Consultant’s employ or acting as independent contractors to complete certain components of the Services contemplated by this Contract.

The Inspector should always retain the right to approve any person who the sub-contractor/consultant uses or hires. Such approval should not be unreasonably withheld, but every single sub-contractor agreement I ever signed, approved, or administrated gave me the right to approve anyone involved in the project. This should extend to the sub-contractor clause which immediately follows.

4A. …The Inspector hereby agrees that it will make available to the Consultant in the performance of Services herein, whether public or private, all reports, references, documentation, or other information held by the Inspector on behalf of the Client that is necessary for the Consultant to complete the Services contemplated herein.

This clause should have the following verbiage added at the end: “where said documentation or information’s release is mutually agreed-to by the Parties, and where requested documentation or information is within the Inspector’s direct possession and control, and where release of said documentation is approved by the owner of said information or documentation.”

8. WORK PRODUCT. All documents, reports, records, notes, data, samples, information, processes, and materials of any kind resulting from the performance of Services under this Contract shall jointly become the property of both the Consultant and the Inspector.

I also have a problem with this basic premise. The key to most consultant agreements goes directly to the work product. For instance, if one was to hire a software developer to develop a product, the product would become the property of the person who purchased the service. Therefore, I believe that this clause should be modified to reflect that the work product of the Consultant’s engagement becomes the property of the Inspector.

17. INSURANCE. The Consultant shall carry those insurance policies for errors and omissions as customarily held in the Consultant’s profession or field of expertise.

If one were to bring an electrical contractor on board, for the electrical portion of the inspection, then it is doubtful that the electrician will actually carry E&O. General liability will be the norm. As such, I believe that #10. INDEMNIFICATION does a superior job of protecting the Inspector. I submit that many of the SME’s retained by an Inspector will probably NOT carry E&O, making this clause pretty moot.

[Russell J. Hensel]

Damn joe must be wanting a membership until 3047!

[James H. Bushart]

If the consultant is autonomous in his relationship with the inspector, he would require his own separate agreement. How can the inspector be liable (or expect to be paid) for something totally out of his control?

[Joe Farsetta]

Damn joe must be wanting a membership until 3047

Nah... I'm already a lifer

I just have years of contract experience, especially as it comes to professional services contracts (since I ran a Pro-Serve division) ad subcontractors in general.