These provisions typically limit a party’s liability to the amount of the contract or some predetermined amount. Historically, such provisions have been generally enforceable in Virginia for everyone except design professionals — that is, engineers, architects, and/or surveyors.
Until recently, provisions limiting the liability of design professionals were often held unenforceable, because Virginia law prohibited firms engaged in the business of professional engineering, architecture, and land surveying from “limit[ing] the liability of any licensee or certificate holder for damages” arising from its actions. However, a recent amendment to the Virginia Code not only eliminated the above-referenced language but added language providing that design professionals shall NOT be prohibited from “limiting liability through contract.” We note that this amendment is not retroactive, however.
While the amendment allows limits on the liability of design professionals, another Virginia Code section prohibits certain indemnification and hold harmless provisions that are designed to completely insulate a party from liability, rather than limit their liability. This rarely used code section invalidates certain contract provisions commonly used by owners or general contractors when they attempt to impose “indemnity or hold harmless” obligations on their architect or engineer. The bottom line is that consulting professionals may be agreeing to contract indemnity provisions that are actually unenforceable.
These laws will provide ammunition for consultants to better protect themselves through their contracts. Design professionals are encouraged to take advantage of these changes and have their standard contracts reviewed and revised. Please feel free to contact Garth Wainman or Matt Westover to discuss any questions you may have regarding these statutes.