Contents of a settlement agreement, by Hugh Anderson

An alert EJCDC member brought this news item to our attention. In a published settlement agreement, an engineering firm agreed to pay  millions  to settle a dispute about alleged lapses in detecting contractor workmanship errors on major water and sewer projects. What factors might lead to such a result? A few general comments:

  • Settlements are often driven by business considerations  and  avoidance of transaction Entering into a settlement is not proof of genuine liability.
  • We don’t know the terms and conditions in the specific contracts.
  • Although a contract for construction-phase engineering services may contain wording that limits or narrowly defines the engineer’s responsibility for the observation of contractor’s work, and places primary responsibility on the contractor, it is unlikely that the contract includes a free pass for the engineering firm—complete immunity from A serious lapse in observing errors could give rise to a valid owner claim.
  • The contractor may also be accountable in a situation in which an engineering firm settles a claim; or it may have technical or substantive defenses that it is Settling a claim does not mean that other parties are (or are not) culpable.

Some of the content of a typical settlement agreement is recitation of allegations (or defenses), to set the stage. Such statements are not facts that have been proven, or accepted by either party.