Fatal mistakes

Fatal mistakes

Features - Cover Story

Attorney Josh G. Ferguson outlines some common – and potentially costly ­– errors in snow and ice management contracts.

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October 23, 2014

I have had the pleasure of representing professional snow and ice managers in litigation and as general counsel for more than 10 years. During that time, the scope and breadth of the contracts I have seen have run the gamut.

For example, I’ve seen book-length contracts better suited to a billion-dollar commercial real estate deal than winter services. On the other end, I have seen contracts hand written on the back of scratch paper.

Over the course of reviewing numerous snow and ice management contracts, I have also seen many errors that, when left unchecked, can pose huge problems for the snow contractor. Here are my five areas of concern that need to be addressed when finalizing a snow and ice management contract.
 

1. Everyone’s John Hancock

For more help

The Accredited Snow Contractors Association (ASCA) has collaborated with attorney Josh Ferguson to offer standard contracts and sub-contracts at a discounted cost to members. These template-style contracts include language to protect snow and ice management contractors both before and during litigation. In addition to the template contracts, alternative scope of work and indemnification language will be provided

Ferguson works primarily in the areas of commercial premises, motor vehicle, contract and construction defect litigation, and has litigated cases throughout Pennsylvania and New Jersey. He has also been retained as general counsel for a wide variety of businesses, including but not limited to those in the snow removal and landscaping industries. As a result of his experience, he has created thorough contracts that will help protect your business and also potentially reduce your insurance premium.

The new standard contract or sub-contract is available for $500, or both contracts are available for $750. As these contracts are templates it is recommended that contractors have all contracts reviewed by their attorneys to ensure compliance with state and local laws and ordinances. Ferguson’s general counsel services will be offered to ASCA members at $150/hour, a significant rate reduction. If you have further questions, please contact Ferguson at jferguson@kentmcbride.com.

The arrangement is just another asset available to ASCA members that not only strengthens their business operations, but also helps curb frivolous slip-and-fall claims, says ASCA Executive Director Kevin Gilbride.

“Frivolous slip-and-fall claims have led to not only skyrocketing insurance costs, but has forced insurance providers from the market, all of which negatively impacts the ability of snow and ice management contractors to provide a vital winter service,” Gilbride says. “Strengthening winter service contracts with accurate and appropriate language is just another weapon our industry has to fight these often bogus claims.” – Mike Zawacki

First off, I often see contracts that are not signed by all parties. If a contract is not either fully executed, or executed in counterparts, it is simply not enforceable. The simple solution is to make sure your file contains a fully executed contract. Additionally, the contract should have a section that permits signing in counterparts, meaning that not everyone has to sign on the same document. If the property owner/manager signs on one contract and the snow plow contractor signs on another contract, then it would be considered fully executed.
 

2. Just say when

Often the duration of the service to be completed is left out of the contract. The length of the contract is incredibly important. The exact dates the contract should be enforced need to be detailed clearly in the terms. For example, if it’s for only one winter, the contract should state: “This agreement shall remain in effect for the season starting November 15, 2014 and ending April 15, 2015 unless earlier terminated pursuant to this agreement or by applicable law.”

If the contract term is not clear, the opposing parties can make an argument based on whatever benefits them the most. Identify the exact terms of the deal. Do not leave anything to chance.
 

3. Unfinished business

Another major problem I see is the scope-of-work section does not properly detail the how, when and where the contractor will perform operations. Even when there is sufficient detail, there is language that puts unfair, unattainable and unrealistic requirements on the contractor. For example, avoid “continuous” (i.e., “continuous service” or “continuous monitoring”); “bare pavement,” “zero tolerance,” or “slip-free conditions.” Instead, use words that permit servicing within a reasonable period of time and service that is consistent with Industry Standards.
 

4. The Almighty's role

Fourth, the contract must contain language to limit responsibility for acts of God or other events out of the contractor’s control. For example, delays in performance caused by strikes, weather conditions and inability to obtain material. This language is often missing and could play a role in defending claims from the property owner/manager for failure to perform duties, as well as claims from a slip-and-fall plaintiff.
 

5. Bad language

Lastly, the indemnification and hold-harmless language is one of the most misunderstood sections of a contract. As a result, I see contractors sign and ask questions later.

Depending on whether the language is beneficial to the contractor or not, it can impact the liability of the parties, including the obligation to defend and indemnify. This language increases exposure, as the snow contractor’s carrier will have to represent not only the insured, but also the indemnified parties.

It is incredibly important to avoid language that requires the contractor and their carrier to provide defense and indemnification in the following scenarios: (1) based solely on allegations in the Complaint (look for the words “threatened or alleged”), or (2) without regard to whose act or omission could have caused the alleged condition.

 


Josh Ferguson is an attorney with the Philadelphia-based Kent/McBride P.C. and a frequent Snow Magazine contributor.