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O P I N I O N
W hen you take your car in for repairs, the mechanic gives you an “estimate.” Jurors understand this concept, that a customer relies on an “estimate” before authorizing work, and should not have to pay more. How about estimates of construction costs? Contract disclaimers reflect the reality that estimating is an art, not a science – and that design professionals cannot guarantee or warrant the actual costs of construction. Liability for cost estimates/cost overruns
William Quatman
Architects are often criticized for being unable to accurately estimate construction costs. In one case it was said that, “There seems to be no reported case in which an architect is alleged to have over- estimated the cost of a building project. Indeed, no case reveals that an architect has [ever] correctly estimated the cost of a project although tradition assures that this does occur.” Williams Engineering, Inc. v. Goodyear , 496 So.2d 1012 (La. 1986). Since design professionals cannot predict the exact amount that contractors will bid, their estimates of construction costs are normally not guarantees, but professional opinions which, for years, the AIA called “Opinions of Probable Construction Costs” – a phrase still used by many firms, and recommended by some lawyers and insurers. However, when the designer’s contract contains a fixed budget, courts generally hold that
design professionals have to use reasonable care to prepare a design that will meet that budget. A harsh rule of law was developed over the years that if costs far exceeded the owner’s budget, the design professional could not recover its fee. This rule has its roots in cases from the early 1900s and is so strict, that some of the older cases held that even where there was no agreement on construction cost, an owner may reject the plans if the cost proves to be too great. Some of those older cases also held that an architect only gets one shot at the design, and the owner was not obligated to allow the architect to revise the design to meet budget. Generally, absent a disclaimer, courts today look to the “standard of care” to see if the design professional was negligent in their estimates
See WILLIAM QUATMAN, page 4
THE ZWEIG LETTER DECEMBER 14, 2020, ISSUE 1371
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