Design Service Agreements

Tennessee Board of Architectural and Engineering Examiners

Once you have decided on a design professional for your project, execute a written contract prior to the beginning of any work. Many design professionals prepare their own agreements, use a standard contract developed by their respective professional organizations, or have them prepared by an attorney.

The agreement for design services is a legal document that binds you and the design professional to certain obligations for the life of the project and, in some cases, beyond project completion. It should include the specific services you and the design professional have agreed upon and the conditions under which these services are to be rendered; otherwise, issues could arise that may be both expensive and time-consuming to resolve.

Review the agreement carefully; you have the right to question and change the terms of the agreement before signing it. Have your legal counsel review the agreement before you sign it. Retain an original copy of the signed agreement. It is both your responsibility and the design professional's to understand and follow the agreement. Do not make agreements with other design professionals regarding your project without first notifying the design professional with whom you have the primary agreement. Communications concerning design or contract changes or clarifications should always be in writing.

Recommended Items for the Written Contract
The following is a list of items commonly found in standard contracts for design services:

  • A description of services to be provided by the design professional to the client;
  • A description of any basis of compensation applicable to the contract and method of payment agreed upon by both parties;
  • The name, address and license number of the design professional and the name and address of the client;
  • A description of the procedure that the design professional and the client will use to accommodate additional services;
  • A description of the procedure to be used by either party to terminate the contract;
  • The title and address of the project;
  • At what phases of the design professional's work your approval must be given before he or she proceeds to the next phase;
  • The time frame in which the design work must be completed;
  • The construction or project budget and what items it includes;
  • An itemized listing of the design professional's basic services;
  • A clarification of who pays the consultant fees if other design professionals are required and, in the case of engineering services, which disciplines were represented by these consultants;
  • A clarification of the reimbursable costs that are not included in the basic fee;
  • A clarification of what services constitute additional costs;
  • A clarification of whose approval is required before these additional costs are incurred;
  • A schedule of when and in what amounts payments are due;
  • How construction observation/administration services will be provided;
  • The amount of the retainer fee and how/when/where it will be applied;
  • How final payment is computed if the agreement is terminated;
  • A procedure for handling disputes between the parties should the need arise (for example, arbitration or mediation);
  • A clarification of who owns the project documents; and
  • A clarification of who is responsible for keeping project account records and when they may be reviewed.

Keeping Records:
The written agreement should not be the only document you keep. You should also keep:

  • A written record of all verbal communication with the design professional that relates to the project. Do not assume the design professional will interpret everything you discuss with him or her the same way you do. When you have a meeting or discussion with the design professional about your project, write the design professional a memo confirming your understanding of that meeting or discussion. These memos can help to prevent misunderstandings from occurring and may prove invaluable should a problem or dispute occur. Include the date and time of your conversation in the memo, as well as the date you write it.
  • Written memos or notes to you about the progress of the project. Photographs taken at regular intervals (with notes as to the dates that the photos are taken) can be very useful in establishing a historical record of the project. Carefully evaluate each phase of the work. Make sure the design professional knows your written approval is necessary before proceeding to the next phase of work.
  • Detailed invoices showing the date and amount of each payment you make. Require the design professional to obtain your written approval before additional costs are incurred.

Make sure that you receive a copy of all documents you sign and keep a copy of all documents you give to the design professional.