The Facts

Landscaping Architect Inc. was hired to design an irrigation system for a crop farm. Due to the farm owner’s minimal budget, Landscaping Architect Inc.’s options for the design were limited.¹

After six months on the project, the farm owner unexpectedly fired Landscaping Architect Inc. The farm owner then made several alterations to the original design which included limiting the number of sprinkler heads per square foot. After the irrigation system was installed, the farm owner noticed some of the crops were not thriving due to lack of water.

The owner filed a claim against Landscaping Architect Inc. alleging more than $700,000 loss in profit. Landscaping Architect Inc. provided a letter denying any responsibility and outlining that the owner changed the original design causing damage to his own crops.

An expert hired by the plaintiff submitted a report stating that the sprinkler heads were installed too far apart. Defense counsel explained that given the limited budget, Landscaping Architect Inc. submitted the best design possible. The plaintiff’s attorney responded stating that Landscaping Architect Inc. should not have submitted a design if they felt they could not design a proper system within the budget constraints.² An additional expert reported that the farm owner’s alterations to Landscaping Inc.’s original design did eliminate a number of sprinkler heads.

The Result

Defense counsel offered $10,000 to settle on behalf of Landscaping Architect Inc. The plaintiff rejected the offer and demanded $50,000. The insurance company and defense counsel insisted on settling for minimal nuisance value and refused to pay $50,000. The claim eventually settled for $10,000.

Risk Factors

Risk Factor #1

An evaluation of the project from a risk management perspective can assist the design professional in submitting a thoughtful proposal well-tailored to the needs of the client. 

Risk Factor #2

A contract should include the owner’s requirements for the project such as design objectives, constraints, performance requirements, and any budgetary limitations.