A "Paperless" Project is Not a "Recordless" Project

In my last article, I discussed the trend in the construction industry toward utilizing common databases to electronically store and transmit project documents. It is important to recognize the need for record-keeping on any project, regardless of whether such technology is in use or not. This article describes the essential records that should be kept before, during, and after completion of the work, regardless of the method of record-keeping.

The most important record on any project is the contract. This is the template that guides the performance of the work of the project. This is true for design professional contracts, prime contracts, subcontracts, materials invoices, and so on. Each of these documents governs the relationship of the parties. It is where each party will look to define its own duties on the project, and where its rights will be spelled out in the event of a dispute.

I sometimes hear from contractors that there won't be any problems on the project, so there is no need to examine or negotiate the boilerplate language of the other party's form. However, on more than one occasion I have revisited the "other guy's" boilerplate terms after a project has developed problems, only to find that that there is no remedy because my client signed the boilerplate contract without understanding what he or she was agreeing to.

In another scenario, two parties agree to "some" work, at "some" price, but simply don't write it down. Later, when a dispute arises, there is no documentation to define the relationship, payment terms, scope of work, etc. This often leads to the proverbial "swearing contest" between two parties with faulty memories.

The moral: Get it in writing, understand the importance of the contract documents to the success of the project, and know the terms and conditions you are agreeing to before signing.

Other important records are project memoranda, meeting minutes, and telephone records. Contractors say it is inconvenient to create these records at the time of an event. However, it is a lot more inconvenient to re-create events months, or sometimes years, later by relying on faulty memories. Keeping contemporaneous records can go a long way toward resolving disputes quickly and effectively.

Photographs are also very useful records on a construction project. Contractors should get permission from the owner to take regular photographs before, during and after the work. The pictures should show the actual work and immediately surrounding areas. As the old saying goes, "A picture is worth a thousand words," and a photograph is a more reliable record of project events than memories or notes. Pictures should be date stamped to document the progress and condition of the work on that particular day.

These records are helpful to prevent disputes from arising, and facilitate the efficient — and accurate — resolution of disputes that do arise. All records should be kept in the project file in the regular course of business. Documents and photographs should not be created to advocate a position, but simply to memorialize the conditions or events as they exist at that time. It is impossible to anticipate the record's potential use or importance. But, by keeping good records, contractors will decrease the number of disputes on projects, and will resolve those that do arise much more efficiently.

This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

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