When you arrange for your clients to hire an environmental consultant, whether to conduct a Phase I audit or undertake a complex cleanup, you need to do more than just agree to the scope of work and cost. In approving a consultant’s proposal you must also approve their professional services agreement. This agreement is a contract, and like all contracts, you need to review it carefully to make sure it fully protects your client. One important element in the agreement is the liability provision addressing the consultant’s potential negligence. Specifically, does the liability provision properly protect your client?

Appellate Division Upholds aConsultant’s Liability Limit

In a recent Appellate Division case, 66 VMD Associates, LLC v. Melick-Tulley & Associates, PC , No. A-4008-09T3, 2011 WL 3503160 (App. Div. 2011), the plaintiffs learned the hard way that the liability clause in its services agreement with Melick-Tulley was woefully inadequate. The facts in this case are straightforward. In 1998, VMD’s predecessor in interest entered into a contract to purchase property in Somerville. The purchase price was $155,000. The property was known to have environmental contamination, so as part of its pre-acquisition due diligence VMD retained Melick-Tulley to develop a clean-up plan and to estimate the cost of undertaking the cleanup.

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