North Carolina Court of Appeals to Decide Whether a Surveyor Can Limit its Liability to a Grading Subcontractor
A grading subcontractor with a $1.6m residential subdivision project hired a surveyor to provide construction staking for the project grading and installation of infrastructure. Because the surveyor’s fee would be less than $20,000.00 for its work, the surveyor proposed to limit its liability for damages from its work to its fee, or $50,000.00, whichever was more. The grading subcontractor agreed to the limitation and it was included in their written contract. The Claim: The grading subcontractor claimed that mistakes made by the surveyor resulted in damages exceeding $500,000.00—more than ten times the limitation of liability. The Trial: The judge refused to enforce the limitation of liability provision (holding that it violated public policy) and never even let the jury know it existed. What’s At Stake: The right of design professionals to contractually control their exposure to claims and balance the risk between their fee and the amount of risk they are willing to take on a project. What’s Next: Attorneys for the surveyor and the grading subcontractor will be filing briefs this summer. Updates will be posted on this website as the case progresses.
A grading subcontractor with a $1.6m residential subdivision project hired a surveyor to provide construction staking for the project grading and installation of infrastructure. Because the surveyor’s fee would be less than $20,000.00 for its work, the surveyor proposed to limit its liability for damages from its work to its fee, or $50,000.00, whichever was more. The grading subcontractor agreed to the limitation and it was included in their written contract. The Claim: The grading subcontractor claimed that mistakes made by the surveyor resulted in damages exceeding $500,000.00—more than ten times the limitation of liability. The Trial: The judge refused to enforce the limitation of liability provision (holding that it violated public policy) and never even let the jury know it existed. What’s At Stake: The right of design professionals to contractually control their exposure to claims and balance the risk between their fee and the amount of risk they are willing to take on a project. What’s Next: Attorneys for the surveyor and the grading subcontractor will be filing briefs this summer. Updates will be posted on this website as the case progresses.
