Limitation of Liability

A recent form of risk shifting comes in the form of "limitation of liability" clauses. These clauses seek to require owners, prime contractors and subcontractors to "agree to limit the liability of the design professional for professional negligence, errors or omissions of the design professional to a total aggregate sum of $50,000 or the design professional’s total fee for the services rendered on this project, whichever is greater." Often, the flow-down piece states that the contractor cannot sue the owner for more than $50,000 or the amount of the designer’s fee.

Contractors have no means to control that risk. We find it offensive that designers seek to abdicate their responsibilities as licensed professionals for the protection of life, health and property. With license and privilege comes responsibility. Designers are more than willing to accept the fees commanded by their professional status; they should accept the responsibility that goes with it!

Please note, such clauses would likely be found as violative of Sections 5-322.1 and 5-324 of General Obligations Law.