Thursday, January 12, 2012

Signed for record purposes only.

Signed for record purposes only is a qualifying statement that is most commonly used in construction contract documents. For the owner, having a contractor sign a document “for record purposes only” is simply not something you want to accept. The reason for that is the statement isn’t making any representation that the information is complete and accurate. The contractor wants to have the document be part of the records under the agreement where they could potentially use that to bill or make a claim against. What this does is place the burden of proof on the owner as to its accuracy to ensure that what was included is accurate. It also could be viewed as an attempt to avoid claims for fraud as there was no statement that it was accurate. If a supplier is preparing a document that is the basis for them wanting to be paid or for them to potentially use in a claim, I would want a representation that the information is complete and accurate.

For the owner using “signed for record purposes only” on documents they acknowledge makes sense. If I was allowing a clerk of the works or site engineers to sign contractor documents, I would want those signed for record purposes only. For example a contractor may want a record of the materials that they brought on site as part of documenting that as an additional cost. When the clerk or site engineer signs that for record purposes only, all they are doing is agreeing that the activity occurred, they are not agreeing to it. This leaves it up to the owner to determine what should or shouldn’t be covered under the agreement.

In a claim the contractor would use that document as proof of what they had delivered to the site. In defending against the claim the owner would do a number of things. Normally if you have a clerk of the works or site engineer you require them to maintain a daily site log of all the activities that are occurring on site. You would review that site log to see all materials brought on or taken off the site. They would also review the architect or engineers instructions to the contractor about its operations and protection of the materials. The owner would use all of that information to determine whether they supplier did anything to cause the problem that required the additional soil. Based on that they would determine what, if anything, the supplier should be paid.

Having a record of an action and agreeing that the owner is responsible for costs associated with that action are two different things.