Professional Services Contract.

Specific Inspection Topics Commercial Inspections / CCPIA
1

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

2

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.

%between%

3

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!

4

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

5

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

6

P.S. I renewed you into 2010.

7

Where can this be found?..link?

Thanks.

8

www.nachi.org/comsop.htm

9

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

10

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

Thanks.

Nice find and follow through.

11

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.”

  1. 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.

  1. 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.

12

Damn joe must be wanting a membership until 3047!:slight_smile:

13

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?

14

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.

15

The idea was for the InterNACHI member to act more like a general contractor who coordinates the inspection process and pushes more of the duty and liability onto the expert, licensed, subcontractor consultants. Unlike software, the consultant’s report has no value to the InterNACHI member outside of the inspection.

16

But, the work product of that consultant, which the Inspector is paying for and coordinating, should become his property, IMO.

17

I completely agree with Joe on all of his suggestions mentioned earlier. If I hire a consultant and he gives me a report, estimate, or whatever it is he is being hired to provide, the work produced is my property. If I decide it is the quality that I want, then I can decide to release that information in my report if I decide. If the consultant does not do a quality job for some reason, I am going to protect myself from his bad work and withhold that information and get another opinion.

I don’t like the fact that the ComSOP is trying to dictate the language of my contracts should be. It is fine if it is a resource to provide a starting point, but I think my lawyer and I should be defining what my contracts say.

18

Scott writes:

Scott, where in the contract do you find language that prevents you from getting another opinion?

19

I am reply to Joe Farsetta’s post #11 in this threat. Let me address each issue in order.

With respect to 2A, the language stating that the Consultant is not subject to the direct control of the Inspector is intended to strengthen the argument that Consultant is an independent contractor and not an employee of the Inspector. Control is a critical factor in making that determination.

I agree with Joe and his suggestions regarding 2B and 4A. Thanks, Joe.

With regard to para. 8, the main point is to make clear that the Inspector has the right to use the work product. People can leave the clause as is, or substitute something like this: “All documents, reports, records, notes, data, samples, information, processes, and materials of any kind resulting from the performance of Services under this Contract shall be considered ‘works for hire’ and shall belong solely to the Inspector.”

With regard to para. 17, I disagree here. A promise by the Consultant to indemnify the Inspector is meaningless if the Consultant does not have the money to indemnify the inspector with. So I think E&O insurance is a good idea. Actually, para. 17 is somewhat vague. Those who want to modify it could consider something like this: “Consultant will at all times maintain general liability insurance, errors and omissions insurance, workers compensation coverage (if applicable), and automobile insurance as required by law.” You could even specify dollar amounts of coverage if you want to.

As is always the case with these agreements, we are trying to balance the Inspector’s need for legal protection with the desire to keep the document as short and simple as possible.

20

Generally, under copyright law, the person who pays for the work to be done owns it.