When hiring a professional to complete an Environmental Site Assessment, most developers only look at the price being charged before signing a retainer agreement. However, before signing your name on the dotted line, there are two common practice clauses in most retainer agreements you should request be removed: (1) damages cap clauses, and (2) mandatory governmental reporting clauses.
Damages cap clauses are provisions in retainer agreements that limit the amount of money you can recover from the environmental professional if he/she screws up. There may be an obvious limitation on the dollar amount recoverable or there may just be a limitation on the types of damages recoverable. A typical damages cap clause limiting the types of recoverable damages will look similar to the following:
Notwithstanding anything to the contrary in this Agreement, neither party hereto shall be responsible or held liable for punitive damages, indirect, incidental or consequential damages, or liability for loss of use, loss of business opportunity, loss of profit or revenue, loss of product or output, or business interruption.
Courts often uphold damage limitation clauses in contracts. Therefore, to ensure your best chance of recovery if something goes wrong, don’t agree to limit your recoverable damages before a lawsuit even begins.
Mandatory governmental reporting clauses are environmental retainer agreement provisions that allow the environmental professional to report his/her findings to governmental entities. To limit potential costly government involvement in your development plans, you, the property owner, should be the only one allowed to report results to government entities.
If you have questions on retaining an environmental professional, we can help with that. Contact us via email or at 469-916-7700.