Arizona Court Enforces Limitation of Damages Provision in Engineering Agreement

1800 Ocotillo, LLC v. WLB Group, Inc.
2008 Ariz. App. LEXIS 9 (Jan. 29, 2008)

The Court of Appeals of Arizona held that a state statute prohibiting design professionals for contracting for indemnity for their sole negligence does not as matter of law prohibit the use of limitation of damages provisions in professional service contracts.

In 1998, a real estate developer, 1800 Ocotillo, undertook the development of a townhouse project in Phoenix that bordered the Arizona Canal. Developer hired an engineering-architectural firm, The WLB Group, to perform surveying, engineering and landscape architecture services on the project. Developer had its design-build contractor sign the contract with the engineering-architectural firm, which included a limitation of damages provision limiting its exposure to the amount of its fees. While the parties never specifically discussed this provision, the entire contract was incorporated into a supplemental contract between the Developer and the engineering architectural firm approximately two years later. Continue reading “Arizona Court Enforces Limitation of Damages Provision in Engineering Agreement”