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    Plato
    Contracts, Reliance, Liability and Limitations
    Topic posted September 4, 2009 by PlatoSuper Contributor, last edited January 19, 2012
    1077 Views, 4 Comments
    Title:
    Contracts, Reliance, Liability and Limitations
    Content:

    My typical contract for a Phase I ESA includes standard Terms and Conditions, and this contract is signed by the "User". 

    If I am asked to provide a reliance letter after the report is completed, I require the new User to sign a similar contract with the same standard Terms and Conditions.

    However, the initial report may have included other entities that may rely on it including the purchaser and the lender.

    Does anyone know of requiring each entity that may rely on the initial Phase I ESA to sign a contract and accept all terms and conditions?

    Comment

     

    • McCarthy
      posted September 4, 2009 by McCarthyElite Contributor

      The buck has to stop somewhere.  For us its w/ the user, not additional parties noted as reliant.  We do the Phase I for the contracted paying user and extend the reliance.  The limitations regarding use of the document and related disclaimers from the contract should also be repeated in the Phase I itself.

      It seems unreasonable to me to expect all parties to sign the contract.  Are there times when one doen't know who the specific end users may be and use vague but limiting terms (e.g. lender or assign)?

      Does each reliant party have to be legally designated by the Corporate name or will it lose reliance defensibility (e.g. the SBA SOP letter)?

      Lastly, if the Phase I references the contract as an integral part of the Phase I (e.g. XYZ was contracted on September 4, 2009 to ...) is the contract by definition an addendum?

      You always ask the stickiest questions.

    • bsavage
      posted October 30, 2009 by bsavageContributor

      Check out ASFE's guidances at www.asfe.org.  Specifically: http://www.asfe.org/index.cfm?cd=NAA&cdid=11037&pid=10344.  This is a great resource.

       

    • FStephenMasek
      posted September 28, 2011 by FStephenMasekContributor

      Our contract includes a clause requiring our client to inform all others that they may not rely on our report without having a contract with us, and our reports all include a reliance contract which other parties may execute and send with payment to us.  Just a disclaimer that others may not rely on it does not seem adequate, and others here have reported being sued by third parties which tried to reply on their reports.   All of our contracts also include a mandatory binding arbitration clause and other features to protect us from frivolous lawsuits, legal fishing expeditions, and other such stuff. 

    • Plato
      posted September 28, 2011 by PlatoSuper Contributor

      Thanks FStephenMasek that makes sense.  I will look into adding that to my own contract.