July 31, 2012

Defining responsibility

Creating a clear snow contract will avoid disrupted work


Disagreements and claims relating to changes in the work can lead to significant disputes under all contracts, and winter maintenance contracts are no exception. Since such disagreements and claims can arise in many different ways, managing the risk of change is something contractors should think about from the time they start negotiations through long after they have completed their work and services.

As a starting point, many disputes over “changes” arise because the original scope of work is not clear: the client says the disputed work is “included,” while the contractor says it is an “extra.” Where the original scope of work is not properly detailed, a resolution of the dispute can require a “he-said-she-said” analysis, which can generally go either way. Also, any ambiguity in a contract will generally be interpreted against the person who drafted it. Pursuant to the legal doctrine of contra proferentum, if the contractor has drafted the contract and presented it to his client, any vagueness or ambiguity will generally be interpreted in favour of the client, so long as the client’s proposed interpretation is reasonable.

It is accordingly important for contractors to make sure their contracts are sufficiently clear and detailed to leave no question about what the contractor is, and isn’t, required to do. With respect to winter maintenance, this is particularly true in relation to who decides when, where, and how much ice-melting product is to be applied in any particular circumstance. As a starting point, winter maintenance contracts should clearly specify who is to make these decisions.

Contract must specify who assumes risk
If the contractor is to assume risk, he or she should be given the discretion to make decisions, without limitation, unless the contract says otherwise. In the case of winter maintenance, the contractor should be paid for all ice-melting product used. Contractors should not let owners pass on the risk of the slip and fall to them, nor limit their ability to manage that risk by applying ice-melting products as they see fit. If the owner wants to limit, in any way, the contractor’s ability to apply ice-melting products, the contract should require the owner to assume the risk of that decision.

Where the contractor is to be “on-call” with respect to the application of ice-melting products, or where the application of these products is to be an “extra,” the client generally “makes the call” as to when and how they are to be applied. This should be made clear in the contract. The contract should include terms and conditions that confirm the client retains the sole responsibility to monitor the weather conditions in the vicinity of the premises and determine if and when a request for the application of ice-melting products should be made.

The client can choose to specify, in advance, that the contractor will apply ice-melting products only in certain circumstances: for example, when the contractor attends to clear snow. Also, the contract can treat other requests for the application of ice-melting products as an extra under the contract, on a request-by-request basis. (Once a request is made, the contractor should have discretion to put down as much of the ice-melting product as he or she believes is appropriate).

The on-call/extra request process should be outlined in the contract and should require that the request be submitted in writing, prior to the work being performed. While in previous times this might not always have been practical, in this day and age email and text technology should be available to meet this requirement. Requests should also be clear and unambiguous. Utilizing a pre-arranged format for the form of the request is advisable.

Set out reasonable response time
The contract should generally only require the contractor to respond to such a request within a reasonable period of time. The contract should not guarantee or imply that the contractor respond within a specified time frame unless the contractor is being paid to be on-call, 24/7, in that regard. This is because the contractor’s response time will generally depend on the timing of the request, the weather and driving conditions, and the volume of work the contractor is committed to elsewhere. Contractors who are concerned that they may not be able to meet the client’s needs upon such a request should immediately advise the client (preferably in writing) that they cannot respond reasonably until a certain time.

Often, owners who are concerned about the cost of winter maintenance services under an all-inclusive contract will approach the contractor with a request to limit the application of ice-melting products to particular quantities or circumstances. When this occurs, the contractor should only agree to such a change if the client agrees to then assume full responsibility to decide when and if the ice-melting products should be applied. The contract should then be formally amended to impose this risk on the client. Also, the contractor should be aware that, generally speaking, he or she will be entitled to the lost profits that would have been earned had the services not been removed from the contract.

Last, in relation to extra work and as is the case with all winter maintenance services, the contractor must prepare and engage a reasonable system to meet his contractual obligations in this regard and keep good records to be able to prove, if necessary, that his or her contractual obligations were met.

Reduce your risk with standard form contract
To help snow and ice contractors reduce exposure to risk, Rob Kennaley has prepared sample standard form snow and ice contracts. The contracts contain terms and conditions that can generally apply to all projects, and can be customized if needed. Several forms are available, including different options for ice melter applications.

Download the forms free at www.horttrades.com/standard-form-snow-and-ice-maintenance-contract.
Robert Kennaley has a background in construction and now practices construction law in Toronto and Simcoe, Ontario. He speaks and writes regularly on construction law issues and can be reached for comment at 416-368-2522 or at kennaley@mclauchlin.ca. This material is for information purposes and is not intended to provide legal advice in relation to any particular fact situation. Readers who have concerns about any particular circumstance are encouraged to seek independent legal advice in that regard.