Beware the Temptation to Offer Extra Services

Although most professionals aim to offer their best possible effort to clients, performing out-of-scope or post-completion services on construction projects opens the door to greater liability.

By Matthew S. Quinn

Most professionals feel driven to do the best job possible for clients and do not rest until the client is satisfied. This common character trait, shared by many in the construction industry, often manifests itself in the performance of services beyond the scope for which the professional is retained or the continuation of services after contract completion.

Construction industry professionals are often more concerned with the proper and timely completion of a project than with possible exposure to liability. But this strong work ethic may present unforeseen risks.

First, a professional who performs services beyond the scope for which he or she is retained invites exposure to liability for any negligence on such work. In other words, by agreeing or deciding on their own to offer services that are not within the contract's scope, professionals are assuming a duty to perform within the applicable standard of care. They may be held liable for negligent performance in the same manner as if the extra work had been in the contract - even when there is no additional payment.

A typical case on construction projects occurs when a general or trade contractor is having difficulty performing its work and a design professional steps in to assist. An inexperienced contractor may have trouble coordinating its forces. In order to keep the project on track, the architect opts to attend and even lead contractor coordination meetings.

But if the project still faces delays despite the added effort, the owner and even the contractor may point the finger at the architect. Though owner-consultant contracts generally provide that an architect is not responsible for a contractor's deficient work or its failure to abide by project schedules, the voluntary assumption of services beyond the contractual obligations may be enough for a court to impose liability on an architect.

A second area where good intentions may get industry professionals into trouble is in the performance of services on projects even after substantial or final completion of construction. Again, motivated by a desire to satisfy the client, construction professionals may undertake services that they are not contractually obligated to provide - usually for no extra pay.

An example might be where an electrical engineer that has completed its tasks on a project decides to assist in resolving an electrical problem that occurs after the owner takes possession of the building.

Again, professionals performing such out-of-contract post-completion services are taking on extra liability. But the professionals may also be stretching the applicable statute of limitations. In the case of the electrical work, the engineer's voluntary "remedial" efforts could push out the starting point of the statute of limitations for future claims until after those tasks are completed.

In New York, a typical action to recover damages for malpractice on construction projects must start within three years, regardless of whether the underlying claim is for breach of contract or negligence. Unless a contractual provision defines the time that a statute of limitations begins, the clock generally starts upon substantial completion of construction.

New York and other states, however, have an exception to that "substantial completion" standard - the so-called "continuous treatment doctrine." The doctrine suspends the accrual of a malpractice cause of action until "treatment" ends - when the professional relationship finishes. New York courts have applied it to claims against design professionals.

The doctrine's aim is to encourage an owner to refrain from filing a claim until the professional has had an opportunity to remediate any deficient services, in hopes of reducing the pressure to file a lawsuit within a statute of limitations. But the effect delays the start of the statute of limitations term until after the professional's continuous services - within and beyond the contract scope - have ended.

To borrow from an old phrase, the road to the courthouse is often paved with good intentions. There are, however, means to reduce added liability for extra efforts. Construction industry professionals can negotiate and execute a separate contract for out-of-scope services that sets caps on liability or shortens the statute of limitations. At the very least, the professional should weigh the advantages of providing such extra services against the possible additional risks.

Matthew Quinn is a partner at Zetlin & De Chiara, a New York-based law firm that specializes in construction law.