CONTRACT ESSENTIALS
Diane M. Tokarsky
Chair, Construction Law
100 Pine Street, PO Box 1166
Harrisburg, PA 17108-1166
717.237.5354
dtokarsky@mwn.com
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COMMUNICATE
COMMUNICATE
COMMUNICATE
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PROPOSAL
VS.
PURCHASE ORDER
WHAT DOES THAT MEAN?
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THEIR CONTRACT
YOUR PROPOSAL
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KILLER CONTRACT
CONTRACT OF ADHESION
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UNDERSTANDING
KEY CONTRACT TERMS
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UNDERSTANDING
KEY CONTRACT TERMS
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Term and Termination
Warranty of Services
Events of Default / Remedies for Breach /
Limitation of Liability
Insurance and Indemnification
Statute of Limitations
Alternative Dispute Resolution / Choice of
Law / Forum Selection
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TERM
TERMINATION PROVISION
•
For Cause
•
For Convenience
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WARRANTY OF SERVICES
Engineer represents and
warrants that all work
shall be performed with
the highest degree of skill
and care
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EVENTS OF DEFAULT
REMEDIES FOR BREACH
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INSURANCE
SEND IT TO YOUR BROKER!
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INDEMNIFICATION
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Joint and Several Liability
Senate Bill 1131 – Effective 6/28/11
Several liability if less than 60% at
fault
Exception for contractual
arrangements
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KEY PROVISIONS OF
INDEMNITY AGREEMENT
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To the extent caused by
Indemnification for Indemnitee's
negligence
Indemnification for employee claim
Cost of enforcing indemnification
obligation
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SAMPLE INDEMNIFICATION AGREEMENT
To the fullest extent permitted by law, you shall defend, indemnify and hold
harmless [Company] its officers, directors, shareholders, affiliates, insurers, agents,
and employees (hereinafter "Indemnitees") from and against any and all liabilities,
damages, losses, causes of action, claims or suits, including expenses and
attorneys' fees, for or on account of any kind of injury to person, bodily or
otherwise, sickness, disease or death, or damage to or destruction of property, or
any other circumstances, in any way arising out of the performance of your work or
supply of materials, but only to the extent caused in whole or in part by your
negligent acts or omissions or breach of contract, or by the negligent acts or
omissions or breach of contract by anyone directly or indirectly employed by you or
anyone for whose acts you may be liable, regardless of whether or not such claim,
damage, loss or expense is caused in part by a party indemnified hereunder. In any
claims against any Indemnitee by your employee, the indemnification obligations
under this paragraph shall not be limited by a limitation on amount or type of
damages, compensation or benefits payable by or for you under workers'
compensation acts, disability benefit acts or other employee benefit acts. It is
expressly agreed that this indemnification agreement is intended to comply with the
requirements of 77 P.S. §481(b). In the event that you are requested but refuse to
honor the indemnity obligations hereunder, then in addition to all other obligations,
and upon adjudication of your liability for indemnification, you shall pay the cost of
bringing such action, including, but not limited to attorneys' fees, costs, expenses
and expert fees, to the party requesting indemnity.
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INDEMNIFICATION. To the fullest extent permitted by law, and only to the extent
such Losses as defined herein are covered by the Contractor's insurance,
Contractor expressly and unconditionally agrees to indemnify, defend, save and
hold Client harmless from any and all actions, proceedings, losses, liabilities,
expenses, reasonable attorneys fees, court costs, litigation defense costs, and
damage (collectively, "Losses") from injury or death to the person or to the
property of any person arising or alleged to have arisen in any way, directly or
indirectly, out of the acts or omissions and any operations of Contractor with
regard to (i) the Work under this Agreement and any predecessor agreement(s)
and (ii) any additional services performed by Contractor for residents, tenants or
Owners of properties where Contractor performs services hereunder. This
indemnity applies without restriction to all existing or pending liabilities and claims
and any that may arise in the future in connection with Contractor's performance
of Work for Client. Whether relating to prior contracts between Client and
Company or arising after the termination of this Contract; provided, however, that
Contractor's indemnity shall not be deemed to cover Losses resulting from
subsequent alterations to the Work by Client or Client's agents, employees or
other contractors. Client reserves the right to require a defense by Contractor
using attorneys of Contractor's choice who are reasonably acceptable to Client,
or in the event Contractor fails to provide such defense, to retain attorneys of the
Company's choice at Contractor's expense, but only to the extent Contractor's
insurance company consents to such right of approval or retention.
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STATUTE OF LIMITATIONS
2 years – Negligence
4 years – Breach of Contract
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ALTERNATIVE DISPUTE
RESOLUTION
Mediation
Arbitration
Litigation
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CHOICE OF LAW
FORUM SELECTION
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NEGOTIATION TIPS
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Evaluate the opposition
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Know what terms are essential
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Offer up an alternative
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