We have long counseled Owners about the risks associated with the standard AIA contract language stating that the Architect’s Drawings are “Instruments of Service” and the license to use them can be withheld by the Architect in the event there is a dispute between the Owner and Architect – involving payment or otherwise. It is always much better for the Owner to retain the rights over the Drawings, particularly when that work by the Architect has been paid for by the Owner.
Now we have a decision from an Ohio court extending this risk of legal fallout from this AIA clause to a Contractor and Subcontractors. In the case of Eberhard Architects v. Bogart Architecture, 314 F.R.D. 567 (N.D. Ohio 2016), the Owner allegedly failed to pay the Architect, who terminated the license to use the Drawings and declared breach of contract against the Owner. The Architect also notified the Contractor and Subcontractors that the license to use the Drawings had been terminated, but the Contractor and Subcontractors continued to work, utilizing the contested Drawings.
The Architect sued not just the Owner for breach of contract due to non-payment, but also the Contractor and Subcontractor for copyright infringement. The Court stated that the Contractor and Subcontractors could be liable for copyright infringement by continuing to work on the Project.
Yet the Contractor (and presumably the Subcontractors) did not have a similar way out of the contract obligation it assumed with the Owner, as the standard AIA general conditions do not excuse Contractor performance or justify termination of the prime contract simply because the Architect’s license is terminated due to a dispute between Owner and Architect.
This case illustrates the serious problems associated with agreeing to AIA’s standard language governing the Architect’s license to use the “Instruments of Service.” Owners, and even Contractors and Subcontractors, need to appreciate these risks and modify the AIA contract language appropriately.
