General Terms and Conditions, frequently referred to as “Boilerplate,” defines how the Client and Consultant will relate to each other in a business relationship without regard to a specific project. The following is a critical “Boilerplate” item that if not clearly and equitably stated will likely result in misunderstandings and confrontational situations:
Limit of Liability – In many cases, fees charged for professional design services are significantly lower than the potential exposure to risk associated with construction of the project. For a more equitable situation, limiting the Consultant’s liability to a fixed amount or one related to the Consultant’s fee is desirable. Liability may be limited by adding a contract clause stating the amount as described above. Additionally, some professional liability carriers offer a premium discount to Consultants whose contracts contain the Limit of Liability provision.