CE 401 Civil Engineering Seminar The Law and Contract Law

CE 401 Civil Engineering Seminar The Law and Contract Law

OUR LEGAL THE LAW •Other Anecdotal Examples – Judicial Branch:

•Man Fired For Obesity Awarded $1 Mil. •Family Seeks $25.5 Mil in “Attack of Cabbage Patch Doll” •Woman Sues IHOP for $1 Bil over frustrated breakfast Special •NYC Transit Authority Must Pay for Man’s Failed Suicide Attempt •Dead man’s family sues restaurant owner for unsafe conditions after man killed by patron during armed robbery escape •New York Woman Sues KFC for $20 Million Over Amount of Chicken in her $20 Fill-Up


•Quiz 7- 6 Questions-10 minutes max. •Quiz 6: 4-10, 7.3; 4-10, 7.3 •Review “Stella Awards” Information after Quiz •Added 2 Pages To Handout Pack #2, 182e.1 & .2 •Review of Testing Water •Anecdotes About Our Legal System •The US Legal System •Contract Law, Start by 9:10 or 12:10


REVIEW OF TESTING WATER

Porter-Rodman’s Report Omitted Information Does It Create Legal Liability For Porter-Rodman?



Porter-Rodman’s Report Omitted Information Does It Create Legal Liability For Porter-Rodman? See Restatement of Law-Fraud by Misrepresentation and decide for yourself, pg 208 c-e


REVIEW OF TESTING WATER • See Restatement of Law-Fraud by

Misrepresentation and decide for yourself, pg 208 c-e

• 526-Fraudulent when • Knows or believes not as represented • Is not confident in the accuracy, or • Knows there is NO basis for the representation

• 527-Ambiguous=Misrepresentation • 529-Incompleteness=Misrepresentation


REVIEW OF TESTING WATER • See Restatement of Law-Fraud by

Misrepresentation and decide for yourself, pg 208 c-e

• 539-Opinion Can Be Misrepresentation If • Opinion as to facts not disclosed or known to recipient • Recipient’s belief about impact is important

• 540 & 541- Recipients duty to investigate varies • No duty even if investigation would reveal falsity • Duty to investigate when falsity is known or obvious to him



Restatement (Second) of Torts-Fraudulent Misrepresentation: •Recipient of Fraudulent Information May Collect from the Sender when:

•Recipient relies on the information provided in either acting or refraining from acting, and •The Recipient’s reliance was justifiable.



Ended with Porter-Rodman sending Ed Anderson a C-Y-A Letter Does the CYA Letter Protect Porter-Rodman?


REVIEW OF TESTING WATER Ended with Porter-Rodman sending Ed Anderson a C-Y-A Letter Does It Protect Porter-Rodman? It Depends On What Protection Porter Rodman seeks.


REVIEW OF TESTING WATER Ended with Porter-Rodman sending Ed Anderson a C-Y-A Letter-Does It Protect? •Ethical Analysis:

•No Impact, thus no protection •Engineer knows what ethical duty he has •The Letter does not eliminate or offset that duty


REVIEW OF TESTING WATER Ended with Porter-Rodman sending Ed Anderson a C-Y-A Letter-Does It Protect? •Legal Analysis:

•May Have Impact, may provide protection •Letter can create legal duties for the recipient

•May not exist absent the letter, and •Could Shift liability from the sender to recipient


OUR LEGAL SYSTEM-WRONG WAY STORY

•Today forward, focus of class shifts: •The Law

•The Legal System •How it Functions (Malfunctions) •Its Major Components •The Cost of Using It

•Loss Prevention/Dispute Avoidance •Dispute Resolution


OUR LEGAL THE LAW

•The Law Is Defined By: •Constitution

•Equal Protection •Universal Access To Courts

•Statutes/Regulations-Federal, State, Local •Precedence Established By Prior Court Decisions-Trial, Appellate, Supremes


OUR LEGAL THE LAW

•The Legal System: •Two Major Bodies of Law:

•Criminal Law •Civil Law

•Civil Law Has Two Major Components: •Contracts •Torts


OUR LEGAL THE LAW •The Legal System – Criminal Law

•Not a major factor in practice of engineering •Does appear on occasion

•Gilbane Gold touched upon it •Inspector goes to Prison for 18 months for taking bribe •Engineer jailed for 10 years for wrong death in collapse •Road Builders indicted for bid collusion, fraud •ALI-ABA Seminar-Criminal Enforcement-Envr. Laws

•For Engineers, Major focus is on Civil Law •Rest of Presentation on Civil Law


OUR LEGAL THE LAW

•The Role Of Interest Groups: Engineering! •Engineers Need Leadership Edge- Weingardt

•Participate In Legislative Process •Provide Specialized Knowledge/Expertise to Congress •Help Shape Public Opinion

•Serve in Legislative Bodies •Indirect Influence on Composition of Courts •Direct participation in public policy debate

•Engineering Must Be More Pro-active in process

CE 401 Civil Engineering Seminar The Law and Contract Law OUR LEGAL THE LAW

•Consider Aftermath of 9-11: •Here Come The Trial Lawyers-Business Week 11/12/01

•Did designer/builder of US Fleet get sued after Pearl Harbor? •Why did designer/builder of World Trade Center face such potential lawsuits after 9-11?

•Engineers Need The Leadership Edge-ET Sept. 1996 •Play a role in shaping public debate, because •A Better Tomorrow cannot be created without our participation.


OUR LEGAL THE LAW •Stella Awards: Be Aware Of Sponsors’ and Critics’ Agendas

•http://www.stellaawards.com –Sponsor •Want to see changes in Civil Justice System •Uses Absurd Legal Cases To Illustrate current folly

•http://www.justice.org/cps/rde/xchg/justice/hs.xsl/2011.htm - Critic in Chief-ATLA

•Want to protect the current system •Find flaws/errors in the Examples cited by their opponents

http://www.stellaawards.com/

http://www.justice.org/cps/rde/xchg/justice/hs.xsl/2011.htm

http://www.justice.org/cps/rde/xchg/justice/hs.xsl/2011.htm


OUR LEGAL THE LAW •Other Anecdotal Examples – Judicial Branch:

•Man Fired For Obesity Awarded $1 Mil. •Family Seeks $25.5 Mil in “Attack of Cabbage Patch Doll” •Woman Sues IHOP for $1 Bil over frustrated breakfast Special •NYC Transit Authority Must Pay for Man’s Failed Suicide Attempt •Dead man’s family sues restaurant owner for unsafe conditions after man killed by patron during armed robbery escape •New York Woman Sues KFC for $20 Million Over Amount of Chicken in her $20 Fill-Up


OUR LEGAL THE LAW

•Other Anecdotal Examples – Executive Branch: •Regulatory Rule Making-Food and Drug Adm.

•230 Days of Hearing •Over 34,000 Pages of testimony •Issue: Have Consumers been defrauded because peanut butter has 86% Peanuts Instead of 90%


OUR LEGAL SYSTEM - THE LAW •Other Anecdotal Examples – Executive Branch:

•Regulatory Enforcement – OSHA •Construction collapse of scaffolding kills and injures block masons-observed by local police from road •What do you want your police to do in this situation?

•Call for assistance •Give aid and assistance to save lives

•OSHA Fined City $963 because the police officers did not put on hard hats before rushing to the scene of the collapse


OUR LEGAL SYSTEM - THE LAW

•Recent Kentucky Examples •Woman sues gas station owner for gas in eyes

•While added fuel to her tank, woman wanted to buy only $X worth •When Pump registered $X, she pulled nozzle from filler tube and raised toward her face, allowing gas to spray on her face and eyes •Awarded Damages by jury at trial court, reversed on appeal.

•Dog Bite yields $500K settlement •Granddaughter bitten by grandparents’ dog on grandparents’ driveway •Dog not on leash in violation of community requirement and City Ordinance •Homeowners’ Association sued for failure to enforce leash requirement •HOA’s Insurer settled with granddaughter for $500,000, and then cancelled HOA’s policy


OUR LEGAL SYSTEM

•What’s Wrong With This Picture?


OUR LEGAL SYSTEM

•What’s Wrong With This Picture? •Shows how ridiculous legal system can be •Shows how litigious Americans can be •Shows how legal system can be the Lottery for some •But, Anecdotes are not proof, only anecdotes


OUR LEGAL SYSTEM

•What’s Wrong With This Picture? •How does any of that apply to engineers? •CH2M Hill Case – Hit highlights •How does this affect the practice of engineering?


OUR LEGAL SYSTEM •What’s Wrong With This Picture?

•How does any of that apply to engineers? •CH2M Hill Case – Hit highlights •How does this affect the practice of engineering?

•Limits Innovation •Increases cost due to defensive practice strategies


TORT LAW •Tort –

•Injury to someone’s person, personal property, reputation, or feelings, or damage to real property: Black’s Law Dictionary •A Civil Wrong For Which a Court Will Grant a Remedy: Bachner •Law recognizes a variety of Torts such as Negligence, Defamation, and others •Negligence is most significant to engineering practice


REFORM OF OUR TORT LAW SYSTEM

•Tort Reform Has Been In News For Decades •Legislation that changes process for lawsuits

•Screening of lawsuits prior to filing •Loser Pays •Limits on Punitive Damages •More Efficient Discovery prior to trial


REFORM OF OUR TORT LAW SYSTEM •Tort Reform Has Been Supported by

•Engineers/Architects •Doctors/Nurses/Dentists •Accountants •General Public (when asked)

•Tort Reform Has Not Happened Yet: •Opposed by the Plaintiff’s Bar – ATLA •Lawyers write the statutes, and •Lawyers are engaged in Public Policy Debate full time


TORT LAW •Law recognizes a variety of Torts such as Negligence, Defamation, and many others •Injury to someone’s person, personal property, reputation, or feelings, or damage to real property: Black’s Law Dictionary •Courts will not hear allegations in tort for offense not recognized in the law


MOST PROMINENT TORT FOR ENGINEERS-NEGLIGENCE •Failure to use REASONABLE CARE -Breach •In the fulfillment of a duty to a person to whom is owed a legal duty to protect-Duty •That causes - Causation •Real damage, injury, or harm – Real Damage •More on Negligence next week-Contracts Today


CONTRACT LAW: SHOW VIDEO AND SEE PPT FILE FOR DETAILS THAT FOLLOW IN THE NOTES

•CONTRACT IS: •Binding Agreement by two or more parties •To perform or pay for performance •Breach of which is enforced by Courts

•Contracts: •Can be oral except in a few very specific exceptions that require a writing

•Enforcing an Oral Agreement is problematic due to proof issue •Should strive to put all agreements into a writing


CONTRACT LAW •Contracts:

•Court will interpret contract as written •Giving words their usual, ordinary meaning •Apply the plain language of the contract unless:

•Agreement violates a rule of law, or •Agreement violates public policy, or •Agreed performance is a violation of a law

•If Agreement differs from common law convention, contract will prevail – Parties have freedom to contract as they wish •Agreements made before the contract is signed are not enforceable unless contained in the writing •Agreement enforced even when one party made a clear mistake

CE 401 Civil Engineering Seminar The Law and Contract Law CONTRACT LAW

•Contracts: Six Elements for an Enforceable Contract:

•Agreement – Offer and Acceptance •Consideration – Something bargained for and given •Competent Parties •Mutual Assent – Absence of fraud, etc. •Proper Form – Some types of agreements must be a writing •For Legal Purpose


•Contracts: •Important Contract Clauses:

•Indemnity Agreements-Transfers liability from one party to the other •Can vary widely from narrow forms to broad forms •Narrow forms indemnify another party for the losses caused by your own negligence •Broad forms can indemnify another party for the other party’s negligence •Even Narrow Indemnities are risky because Professional Liability Insurance does not cover contractually obligated duties, could render your insurance ineffective


•Contracts: •Important Indemnity Decisions:

•Can Engineer be indemnified by contractor for his own negligence?

•Minnesota Court-No , State Supreme Court Ruling •Missouri-Yes, State Appellate Court Decision

•Can General Contractor be indemnified by subcontractor? •Massachusetts-Yes, both General and Sub found negligent in case •Texas-Yes, even from General Contractor’s Gross Negligence if Negligence cited in contract Clause.


•Indemnity – Hold Harmless Clauses: •Form: Engineer agrees to indemnify and hold the owner harmless if the owner sustains losses, and pick one:

•Due to Engineer’s negligence on the project, (Narrow Form) •Due to any action taken by the engineer on the project, or •Due to any cause including the owner’s negligence (Broad Form)

•Be Aware of increased liability exposure you have if you agree to indemnify your client

•Broad Form makes you liable even for the owner’s negligence •Narrow Form may void your liability insurance coverage


•Contracts: •Important Contract Clauses:

•Form: Owner Agrees To Limit Engineer’s liability to $x or the engineer’s fee, whichever is greater (or lesser). •Limitation of Liability Clauses- Limits liability obligation by contract

•Common practice in many contracts •Moving companies •Airline Companies

•Been in use in Engineering Contracts for over 40 years •Been enforced by the Courts when tested


•Contracts: •Important Contract Law Principles:

•Bidding Mistake does not void the contract duty to perform •New York: Costly Typo binding on Contractor

•Bid in numbers, $380,499 •Bid in writing, “Three Hundred Eight Thousand, Four Hundred Ninety Nine dollars” •Writing controls when not the same

•Wisconsin-Court held bidding error excusable despinte carelessness, negligence or neglect of bidder

•Bid Yanked By Sub remains enforceable contract for General Contractor •General relied on bid from Sub and won contract •Oral contract formed when sub submitted bid and general relied upon it


•Important Contract Law Principles: •Must Contractor Comply with State Law on Overtime Pay When Contract defines Overtime differently

•Louisianna- •Contract defines OT as in excess of 8 hours in a day, or in excess of 40 hours in a week, whichever is greater •La Law defines OT as in excess of 40 hours per week •Contractor worked four 10 hour days per week •Had to Pay 8 hours OT and 32 hours RT

•Can Contract be Oral-YES-Enforcement of terms problematic

Documents

CE 401 Civil Engineering Seminar The Law and Contract Law