Notes

The PEO now uses the NPPE exam, which is a national exam. It still does have 10 PEO-
specific Ethics/Act questions tho.
PEO allows candidates three attempts to pass the NPPE.
This package does NOT include any sample questions. There’s lots out there. Do it yourself.
The nppe exam site has 2 sample tests for sale. The textbooks have questions and
explanations, at the end of chapters and/or at the end.
Syllabus: [Link]

Use the textbooks:

For law: Brian M. Samuels, Doug R. Sanders - Practical Law of Architecture, Engineering, and
Geoscience. It's most aligned with the NPPE. Do the study questions at the end of the chapters.
Gordon Clifford Andrews, John McPhee, Patricia Shaw - Canadian Professional Engineering
and Geoscience Practice and Ethics
For ethics: the above, and also Donald L. Marston - Law for Professional Engineers. It's got
Ontario-specific stuff too.

The NPPE exam is a closed book exam with 110 multiple choice questions to be completed in
2-1/2 hours. You must get 65% or above to pass, but results are curved.
Each question has four options and only one correct answer per question. 100 questions are
operationally scored questions that the pass/fail results are based and 10 questions are
experimental questions that are not scored. Applicants will not be able to differentiate
operational and experimental questions.

Each multiple-choice question on the exam contains four options and only one correct answer
per question. All questions are scored 0 (incorrect) or 1 (correct) with no penalty for guessing.

Each of the exam questions you'll face in the exam will consist of four choices. It is important to
note that advanced multiple choice exams are rarely as straightforward as having one correct
choice and three incorrect choices. Generally, there are three different methods employed to
test the understanding of the examinees.

 Four correct choices: Select the most appropriate and comprehensive answer. Often,
the most correct answer includes multiple courses of action that the other three choices
lack.
  Four incomplete choices: The second method is to provide four incomplete answers.
Choose the answer that is most correct. A recurring theme in the NPPE study material is
public safety.
 Four negative choices: The third method involves choices that all involve four negative
action choices. One of these negative actions is not applicable to the question at hand.

(In some jurisdictions (NOT Ontario), (e.g., EGBC) the examination also contains an essay and
the exam is 3.5 hr.)
Contents
Notes...........................................................................................................................................................1
Module 1.....................................................................................................................................................6
Chapter 1 The Canadian Legal System.....................................................................................................6
Jurisdiction...........................................................................................................................................6
Supreme court of Canada....................................................................................................................7
Statute Law..........................................................................................................................................8
Common Law.......................................................................................................................................8
Basic Terminology................................................................................................................................9
Chapter 2 Business Organizations..........................................................................................................10
Types of business orgs.......................................................................................................................10
Shareholders, Directors, and Officers................................................................................................13
Chapter 4 Tort Liability...........................................................................................................................15
Tort Liability.......................................................................................................................................15
Module B: Contracts..................................................................................................................................21
Chapter 7: Contracts..............................................................................................................................21
Chapter 8: Offer and Acceptance...........................................................................................................22
Offer:.................................................................................................................................................22
Option Contract.................................................................................................................................23
Manner of Communications..............................................................................................................24
Chapter 9 - Intent..................................................................................................................................25
Letters of Intent.................................................................................................................................25
Chapter 10: Consideration.....................................................................................................................25
Consideration....................................................................................................................................25
Equitable Estoppel.............................................................................................................................26
Chapter 11: Capacity.............................................................................................................................26
Not everyone has capacity to enter into a contract...........................................................................26
Chapter 12 - Legality..............................................................................................................................27
Chapters 13 – 15 Statute of Frauds, Misrepresentation & Mistake........................................................27
Chapter 13 - Statute of Frauds...........................................................................................................27
Chapter 14 - Misrepresentation. Duress, Undue Influence....................................................................28
Misrepresentation.............................................................................................................................28
Duress................................................................................................................................................28
 Undue influence................................................................................................................................28
Chapter 15 – Mistake.............................................................................................................................29
Chapter 16 - Tendering (Contract A)......................................................................................................29
Ron Engineering - Concept of Contracts A and B...............................................................................29
Tendering...........................................................................................................................................32
Chapter 17 & 18 Contract Interpretation and Discharge.......................................................................34
Chapter 17 - Contract Interpretation.................................................................................................34
Chapter 18 - Discharge of Contracts..................................................................................................35
Module C: More Contracts........................................................................................................................38
Chapters 19 & 20...................................................................................................................................38
Chapter 19: Breach of Contract.........................................................................................................38
Chapter 20 - Limiting Liability by Contract.........................................................................................40
Chapter 21 - Agreement between Client and Engineer.........................................................................40
Chapter 22 - Concurrent Liability in Tort and Contract..........................................................................41
Chapter 23 Concurrent Liability in Tort and Contract | Duty of Honesty...............................................41
Chapter 24 Construction Contracts........................................................................................................42
Engineer in contracts.........................................................................................................................42
Types of Project Delivery Systems......................................................................................................43
Module D - Other Considerations in Law...................................................................................................44
Chapter 33 – Intellectual Property.........................................................................................................44
IP Rights.............................................................................................................................................44
Chapter 36 Employment Law.................................................................................................................47
Health and Safety..............................................................................................................................47
Ontario-Specific, not sure if worth studying for NPPE.......................................................................48
Chapter 32 - Regulatory Aspects and Ethics..........................................................................................50
Module E: Ethics........................................................................................................................................52
Ethics and Problem Solving....................................................................................................................52
Chapter 3 - Ethical Considerations.........................................................................................................54
Dual Role of the Consultant as Owner’s Agent and Impartial Arbiter....................................................56
Module F: Professionalism - Generic.........................................................................................................57
Engineering Associations.......................................................................................................................57
Self-regulation...................................................................................................................................57
Def'n of Engineering:.........................................................................................................................57
 Enforcement and Discipline...............................................................................................................58
Engineering Associations Rules..........................................................................................................59
Admission to Engineering..................................................................................................................59
Licensing Requirement......................................................................................................................60
Seal....................................................................................................................................................60
Reviewing the Work of Another Professional....................................................................................61
Software............................................................................................................................................62
Standards and Codes.............................................................................................................................63
Module G: Professionalism - PEO..............................................................................................................65
Act and Reg............................................................................................................................................65
Membership (§18.5, §5, see definition of "professional engineer" in §1).............................................66
Types and restrictions on membership (see definitions in §1) Licence..............................................66
Enforcement (§40).............................................................................................................................68
7. "practice of professional engineering" (defined in §1)...................................................................68
Consulting Engineer...........................................................................................................................68
Advertising.........................................................................................................................................69
Practicing outside ur discipline..........................................................................................................69
Professional Seals and Letters of Assurance......................................................................................70
Professional Engineers Act.....................................................................................................................70
Chapter 32 - Regulatory Aspects and Ethics.......................................................................................70
§7 and §8...........................................................................................................................................71
Section 12 When licences or certificates required - summary of subsections...................................72
Section 13 Corporation......................................................................................................................72
Section 15 – Certificates of authorization:.........................................................................................72
Section 16 – Issuance on direction of Council:...................................................................................72
Section 17 – Supervision under certificates of authorization:............................................................73
Codes of Ethics (CoE).............................................................................................................................73
Stuff from the Act..............................................................................................................................74
Roles in the Association.....................................................................................................................75
Module H - Other Stuff..............................................................................................................................78
Chapter 17 - Bonds................................................................................................................................78
Bonds.................................................................................................................................................78
Types of Bonds...................................................................................................................................79
Chapter 19 Delay and Impact Claims.....................................................................................................82
Chapter 23 Environmental Law & Ethics ( Ethics part is included from Ethics section)..........................83
ESAs...................................................................................................................................................84
Enviro audits......................................................................................................................................84
Remedies for Private Landowners.....................................................................................................84
Government Regulation.....................................................................................................................85
Environmental Offences.....................................................................................................................85
Environmental Cleanup......................................................................................................................86
The Environmental Assessment (EA) Process.....................................................................................86
The Duty to Society............................................................................................................................86
Canadian Environmental Law............................................................................................................87
Environmental Guidelines for Corporations: Ceres............................................................................87
Environmental Guidelines for Corporations: Registration under ISO 14001......................................87
Chapter 27 Internet Law........................................................................................................................88
Jurisdiction.........................................................................................................................................88
Chapter 12 Ethics in Professional Employment.....................................................................................88
Employment Law...............................................................................................................................91
Safety Stuff........................................................................................................................................94
Professionalism..................................................................................................................................96
Module 1
Chapter 1 The Canadian Legal System
Source: Mostly the Martson txtbk

Jurisdiction
For the most part, laws affecting eng. practice fall under provincial jurisdiction. Wherever there
are direct operational conflicts between a federal and a provincial statute, the Constitution holds
that federal law prevails. However, no court in any province has jurisdiction over courts in other
provinces. Federal has no jurisdiction over provincial.
 Private law falls under provincial jurisdiction.
 Exceptions: Federal Courts deal with Federal Matters such as patents and
shipping disputes.
 Labour law is generally provincial but some industries fall under federal
jurisdiction
 Ex: Airlines, railroads, the post office are federal
 The court systems function independently of each other. Provincial litigants have
the right to appeal a trial decision to the Court of Appeal of the province in which
the decision was made. Litigants under Federal Court may appeal to the Federal
Court of Appeal.

Supreme court of Canada

 Ultimate level of appeal
 Not easy: Litigants in civil cases do not have an automatic right to bring an
appeal to the SCC.
 Instead, they must first obtain permission (leave) from the SCC to bring the
appeal.
 In order to obtain leave, they must demonstrate that there is at least one
issue in the case that is of national importance.
The Charter applies to acts of the government and its branches, but not to interactions between
private parties:
freedom of association, and the right not to be discriminated against, etc. Human rights statutes
in each province prohibit discrimination by private individuals.

Statute Law
 In Canada, laws can be created in several ways. Federal and provincial
governments can enact statutes.
 Statute laws must be compatible with the Constitution to be enforceable
 Judges only interpret laws, in theory
 Legislation gives certain agencies the power to create regulations that may be
considered law. PEO may enact bylaws. Breaching can => liability for damages,
other consequences.
 Regulations created by such agencies is often referred to as subordinate
legislation.

Common Law
 Common Law: legal system that judges develop through past case precedents and
similar tribunals. It is used in many countries with ties to the British Legal System.
 Large bodies of Canadian law are not based on statutes & were not created by
legislatures, nor were they the result of interpretation of statutes. Rather, they are
laws created by judges based upon principles of law and equity established and
modified over hundreds of years, tracing their roots to England.
 Use judicial precedents – see below
The Theory of Precedent
 In deciding cases, the courts apply legal principles established in previous court
decisions that involved similar or analogous fact situations.
 Courts also dispense equitable relief and thus there is flexibility in the court's
decision can exercise its equitable discretion to reach a policy decision that may
represent a departure from case precedents.
 Factual distinctions between cases may also provide the basis for
flexibility.

A court may see fit to dismiss the application of a precedent on the basis of relatively minor
factual distinctions between the precedent and the facts of the case before the court, provided
the end result is justified.
However, departures from established precedents are often very slow to evolve. This slow
evolution is a characteristic of our legal system that may, at times, be criticized; nevertheless,
the theory of precedent is of major importance and is the basis of predictability in the legal
system.

Basic Terminology
Litigation—A lawsuit.
Plaintiff—in civil litigation, the party bringing the action or making the claim in the lawsuit. In
criminal matters, the “plaintiff” is usually the Crown.
Defendant—The party defending the action, or the party against whom the claim has been
made. In criminal matters, the “defendant ’ is called the “accused.”
Appellant—The party appealing the decision of a lower Court, in either civil litigation or criminal
matters.
Respondent—The party seeking to uphold a decision of the lower Court that is being appealed.
The term applies in both civil litigation and criminal matters.
Privity of contract—Describes the legal relationship between parties to a contract.
Creditor—A party to whom an amount is owing.
Debtor—A party that owes an amount to a creditor.
Indemnification—A promise to directly compensate or reimburse another party for a loss or cost
incurred. Similar to a guarantee; the essential difference is that indemnity rights can be
exercised directly.
Guarantee vs Indemnification
For example, a guarantee works as follows: suppose that Jason Smith promises John Doe that
Smith will guarantee the debts of ABC Corporation. Enforcement of the guarantee requires that:
o ABC Corporation defaults in making its payment to John Doe, and

o John Doe first looks to ABC Corporation for such payment.

Only then may Doe require payment from the guarantor, Jason Smith.
An indemnification, however, works as follows: suppose that Jason Smith had indemnified
John Doe on account of ABC Corporation's indebtedness directly from Jason Smith without first
pursuing ABC Corporation for payment.
(As a practical matter, it is very difficult to distinguish a guarantee from an indemnity, as the
guarantee may, for example, expressly provide that the creditor need not exhaust his or her
remedies against a debtor before pursuing the guarantor for payment.)

Chapter 2 Business Organizations

Types of business orgs
Sole Proprietorship
Sole Proprietorship: An individual carrying on business either in his or her own name or under a
business name (which is just their trade name under which they carry on business).
 The sole proprietor obtains all of the profits and takes all of the losses of the
business.
 Legally no difference between the individual and the sole proprietorship. All of
the individual’s assets are at risk for the liabilities of the business.
 Provincial legislation generally requires a business name to be registered.
Cons:
 Full liability
 At certain income levels, individuals are taxed at a higher rate than corporations.
Pros:
 setup costs are lower than corporation
 no corporate reporting and filing requirements
 At low income levels there may be tax advantages.
 Compared with partnerships, sole proprietorships have the advantage of not
exposing an individual to liability for mistakes made by partners.
Partnerships
Partnerships: provincial Partnership Act in each province.
 Partnership agreement generally sets rules including who has what authority, the
division of profits, procedures for business decisions, and procedures for
dissolving the partnership.
 Otherwise, each partner has authority to enter into contracts and carry on
business in the name of the partnership.
 Others doing business with the partnership may still assume that every partner
has unlimited authority and liability.
 Each partner is jointly liable for all of the debts and obligations of the
partnership, and such liability is not limited to that partner’s proportionate share.
Eg. If one partner does sth to another party in business setting, the other party
can sue both
 even without a partnership agreement, they may still be considered partners
under the terms of a Partnership A
 Ex. if three musicians put on a concert, they are unlikely to be considered
a partnership, but if they put on a series of concerts, the law may consider
them partners.
Pros:
 lack of incorporation costs and ongoing filing fees compared to corporation
 sharing of expenses, risk, and expertise.
Cons:
 Potentially greater liability than shareholders
 Sharing risk can be both an advantage and a disadvantage
 Complicated taxes

Note: 2 or more companies can become partners

Joint Venture
Joint venture is often essentially a partnership limited to one particular project.
Joint venturers should ensure that the scope of the joint venture is limited to the single project,
in order to protect the assets of the joint venturers as partners in the project.
It is advisable for each of the joint venturers to indemnify each of the other joint venturers for
liabilities that may arise as a result of respective services and contract obligations negligently
performed.
Limited partnerships
Limited partnerships have at least one general partner and one limited partner.
 General partner runs the business & has unlimited liability
 Limited partners are liable only for their financial contribution to the business and,
in some provinces, for the profits that they derive from the business.
 Limited partners cannot actively participate in the business or they lose their
limited liability status
o active participation includes being involved in controlling the business or
providing services to the business.
Limited Liability Partnerships (In some provinces): the liability of a partner is limited only to the
liability of that partner.
 If one partner is negligent, only their assets and the assets of the partnership as
a whole are at risk; other partners' assets not at risk.
 Limited liability partnerships must carry a prescribed level of liability insurance.

Corporations
Corporation: legal entity that permits large numbers of individuals to invest in a common
business venture while limiting the liability of the business to the new legal person, the
corporation.
 must use one of the words Corporation, Corp., Incorporated, Inc., Limited, or Ltd. as part
of its name
o This tells parties doing business with it that liability for corporate debts and
obligations is limited to corporate assets and does not extend to the
shareholders, officers, directors, or employees.
 Must be registered in every province in which it carries on business.
A corp is considered a Separate Legal Entity: a separate legal person. must keep separate
records and separate bank accounts and must act as separate persons.
 Otherwise, risk
 losing its limited liability status
 Becoming personally liable for the company’s debts and obligations.
Some liabilities are still shared tho
 Eg: If the company is small, its bank and many of its larger suppliers will probably
require Bill to sign a personal guarantee for the debts owed by Smith’s Painting Ltd.
before they advance funds or Supplies because they suspect that Bill’s Painting Ltd.
does not have significant assets.
 In addition, some statutes ignore the limited liability status of a corporation and
place personal financial responsibility on the directors and officers.
  "piercing the corporate veil": ignoring the fact that they are separate legal entities,
usu for fraud.
Unlike the sole proprietorship and the partnership, the corporation is an entity unto itself, distinct
from its shareholder owners.
The corporation as an entity has been described as a “fictitious person.”
The corporation itself owns its assets and incurs its own liabilities; it can sue or be sued in its
own name. A shareholder of a corporation can contract with or sue that corporation.

Summation of Exceptions to Salomon Principle

“Associating” corporations controlled by the same person or group of persons for tax purposes
is an example of the dilution of the concept of separate and distinct corporate entities dictated
by the economic realities of the business world.
There are several other examples of such departures from the general concept of the
distinctiveness of the corporate entity: the willingness of the courts to “pierce the corporate veil”
in exceptional circumstances; the courts’ disregard for the distinction between the individual and
the corporate entity where fraud has been involved; the courts’ “association” of corporations for
certain tax purposes. Nevertheless, it is important to bear in mind that such departures are the
exceptions.

Private company
A “private” company is generally defined as a company in which:
 the right to transfer shares is restricted (for example, such transfer may be
subject to the approval of its board of directors);
 the number of its shareholders, exclusive of present and former employees, is
not more than 50; and
 any invitation to the public to subscribe for its securities is prohibited.
Most engineering corporations begin as private or closely held companies. A corporation might
decide to “go public’ and to thereby distribute its securities to the public. Such a decision will
necessitate continuing compliance with extensive disclosure and reporting requirements of
provincial securities legislation.

Sole Proprietorship Partnership Joint Venture Limited Partnership Corporation

Descripti An individual partnership limited to At least one general Separate legal entity
on carrying on business one particular project, partner and one that permits large
either in his or her limited partner. numbers of individuals
own name or under General partner runs to invest in a business
a business name. the business & has while limiting the
The SP gets all of unlimited liability. liability of the business
 the profits and takes Limited partners are to the new legal person
all of the losses of liable only for their (the corporation)
the business. financial
contribution/their
profits

Liabilitie Legally no difference Each partner This is in order to

s between the jointly liable for protect the assets of
individual and the all debts and the joint venturers as
sole proprietorship. obligations of the partners in the project.
All of the individual’s partnership.
assets are at risk for Liability is not
the liabilities of the limited to that
business. partner’s
proportionate
share. Eg. If one
partner does sth
to another party
in business
setting, the other
party can sue all
partners

Pros setup costs are lack of The corporation itself

lower than incorporation owns its assets and
corporation costs and incurs its own liabilities;
ongoing filing it can sue or be sued in
no corporate fees compared to its own name. A
reporting and filing corporation shareholder of a
requirements corporation can
sharing of contract with or sue
At low income levels expenses, risk, that corporation.
there may be tax and expertise.
advantages.

Compared with
partnerships, sole
proprietorships have
the advantage of not
exposing an
individual to liability
for mistakes made
by partners.

Cons Full liability Potentially Limited partners cant Some liabilities still
greater liability actively participate in shared. Ssome
At certain income than the business or they statutes ignore the
levels, individuals shareholders lose their limited limited liability status of
are taxed at a higher liability status a corporation and
rate than Sharing risk can place personal financial
corporations. be both an responsibility on the
advantage and a directors and officers.
disadvantage

Complicated
taxes
Notes 2 or more Limited Liability must use one of the
companies can Partnerships (In some words Corporation,
become partners provinces): the Corp., Incorporated,
liability of a partner is Inc., Limited, or Ltd. as
limited only to the part of its name
liability of that partner.
This tells parties doing
If one partner is business with it that
negligent, only their liability for corporate
assets and the assets debts and obligations is
of the partnership as limited to corporate
a whole are at risk; assets and does not
other partners' assets extend to the
not at risk. shareholders, officers,
directors, or
Limited liability employees.
partnerships must
carry a prescribed
level of liability
insurance.

Shareholders, Directors, and Officers

 Officers and directors owe a fiduciary duty to the corporation, NOT to
shareholders. Eg: officers and directors cannot operate separate competing
businesses or take profits of the business for themselves
 must act in the best interest of the corporation, be loyal to the corporation, act
honestly and in good faith, and declare all conflicts of interest

Shareholders 'own' the business and do not necessarily have a role in the business.
 They receive share certificates as evidence of such ownership, usually in return
for invested capital.
 As its owners, the shareholders elect the directors of the corporation. The board
of directors of the corporation supervises the management of the corporation's
affairs and business.

Officers usually provide for the day-to-day business management.

 Eg: president, vice-president, and corporate secretary. provide a close
operational direction
 Their duties are normally set out in the by-laws of the corporation.
 Elected or appointed by its directors.
Offenses
 Directors and officers of a corporation that has committed an offence can be found
individually guilty of the same offence as the corporation. Directors and officers also
have specific duties under various Acts.

 As outlined in Chapter 23, the principal defence for officers and directors against liability
is due diligence. Due diligence means that officers and directors took all active,
reasonable steps to ensure that the corporation was not in breach of the statute in
question

 Unlawful insider trading: when investors make use of information that is unavailable to
the public.
 Lawful insider trading: using only data available
 Engineers and geoscientists are often insiders in the sense that they own shares in
corporations for which they possess confidential information.

The Director's Standard of Care

Directors and officers are expected to comply with a certain standard of care in carrying out their
respective responsibilities. For example, Section 134(1) of the Business Corporations Act of
Ontario provides:
Every director and officer of a corporation in exercising his or her powers and discharging his or
her duties shall,
(a) act honestly and in good faith with a view to the best interests of the corporation; and
(b) exercise the care, diligence, and skill that a reasonably prudent person would
exercise incomparable circumstances.

An engineer who agrees to act as a director of a corporation engaged in the business of

engineering must realize that the position of director has potential liabilities. The engineer must
be willing to act in good faith and in the best interests of the corporation.

The obligation of a director to act honestly, in good faith, and in the best interests of the
corporation, and not in a manner that is in the interest of the director personally, is often referred
to as the director's “fiduciary duty" to the corporation.

“Fiduciary” refers to a person acting as a “trustee,” one who is required to act with scrupulous
good faith for the benefit of another (in this case, for the benefit of the corporation) on whose
behalf the fiduciary, as a director, has agreed to act.
There are a number of statutory provisions imposing responsibilities on directors of
corporations.
Disclosure of Conflicts
Directors are required, by statute governing the corporation, to disclose any personal interest in
any material contract or transaction to which the corporation is a party.
The director must not vote in approval of any such contract or transaction.
If the director does not disclose interest in the contract, he or she is potentially accountable to
the corporation or to its shareholders for any profit or gain realized from the contract or
transaction.

Chapter 4 Tort Liability

Tort Liability
Tort generally refers to a private or civil wrong or injury, one that involves negligence and that
may arise independently of contract.
Liability for breach of contract can both occur, depending on the circumstances and the terms of
the contract. This is referred to as “concurrent liability" in tort and contract.
For the purpose of this chapter, however, the focus is on the fundamentals of tort liabilities,
particularly the important emphasis placed on the engineer's “duty of care” and the
measurement of what constitutes “reasonable care” in the provision of engineering services. In
subsequent chapters, contract law issues relating to contracts involving a duty of care, similarly
measured, will also be addressed.

Fundamental Purpose
 To compensate victims of torts

o NOT punishment of negligent wrongdoers

 If the circumstances of the tort also constitute criminal activity,

punishment of the criminal would be governed by the Criminal
Code of Canada.
 Criminal proceedings are independent of civil proceedings.

Professional Liability Insurance

To ensure that funds are available to provide compensation to tort victims, engineers involved in
providing design services to the public should:
 obtain appropriate professional liability insurance coverage,
OR
 Disclose to the client their lack of insurance,
AND
 o Client must acknowledge such disclosure.

Professional liability insurance provides protection if an engineer's negligence results in damage

arising in tort.

Liability
2 main sources of liability: breach of contract and negligence.
A breach of contract is a failure to complete the obligations in a contract.
 By incorporating a practice, the individual gets some protection against personal
financial loss due to lawsuits resulting from breach of contract. After incorporation, the
company becomes the contracting party and the assets of the company are separate
from the individual’s.
Negligence is a failure to exercise due care in the performance of professional duties.
 Liability insurance protects the individual against massive personal financial loss due to
lawsuits resulting from negligence.
However, incorporation and liability insurance will not protect the individual from disciplinary
action for negligence, incompetence, or professional misconduct. In the event of a charge under
the Act, the individual must respond to the Discipline Committee.

In Manufacturing
Product liability insurance may provide appropriate protection, Advice should be taken on the
appropriate form of insurance coverage from experienced risk managers and insurance brokers.
Some companies, government departments, and Crown agencies choose to “self-insure,”
another approach that can suffice provided adequate funds are available to respond to
compensate tort victims.

Exclusions in insurance policies and lack of insurance availability, for example, for pollution and
nuclear hazards, should be carefully factored into the engineer's risk assessment and practice
planning: it is prettymuch impossible to get insurance if ur working in nuclear hazards.

Principles of Tort Law

In order to satisfy the court that compensation should be made, plaintiff must substantiate all 3:
 the defendant owed the plaintiff a duty of care;
 the defendant breached that duty by his or her conduct; and
 the defendant's conduct caused the injury to the plaintiff.
"reasonable" applies to all these; “Reasonable” is measured by the conduct expected of a
reasonable person in the circumstances.
1. the defendant owed the plaintiff a duty to use a reasonable degree of care.
2. the defendant ought, reasonably, to have foreseen that failure to exercise a reasonable
degree of care would likely result in injury or damage to the plaintiff.
3. as a result of fault on the part of the defendant (and not because of some other
intervening act by a third party) the plaintiff sustained the injury.
Note that reasonableness may also be a factor in determining the third item. Was the fault of the
defendant the reasonable proximate cause of the damage? Or was the damage claimed too
remote or not reasonably foreseeable to the defendant in the circumstances?

Engineer's Standard of Care

A significant factor in a tort action is the establishment of the standard of care required of the
defendant.
suppose a court is to determine whether an engineer has been negligent in the performance of
engineering services. The court must apply some standard to determine whether the engineer's
conduct was negligent.
The standard applied is based on the premise that engineers have a duty to use the reasonable
care and skill of engineers of ordinary competence. The “reasonable care” is measured by
applicable professional standards of the engineering profession at the time the services are
performed.

What is Negligence?
Ex: Dominion Chain Co Ltdv Eastern Construction Co Ltd et al
 The term “negligence" =/= “mistake”.
 There may be circumstances where the court can be persuaded that (the
error in question) =/= negligence. Likely to be rare.
 Arguments in support of that position might involve reference to less
sophisticated technologies at the time the services were performed,
supporting the argument that the engineer did all they ought to do at that
point in time.
o “developing” industries, eg. “high tech’ fields where design
standards may be less precisely defined
 potential for claims in tort to be brought against the engineer many years in the
future
 Section 72 of the Regulations under the Professional Engineers Act of Ontario:
  Negligence: an act or omission in the carrying out of the work of a
practitioner that constitutes a failure to maintain the standards that a
reasonable and prudent practitioner would maintain in the circumstances.
 Codifies a variety of examples of “professional misconduct’ by an
engineer, and includes negligence in this list.

Strict Liability
Strict Liability: a party may be held responsible for harm caused, even if they were not negligent
Ex: if they bring something onto their land for non-natural uses that escapes onto another's
land, nuisance, etc
 Legislators sometimes find the concept of fault inadequate for the purpose of
compensating injured parties.
 For example, worker's compensation legislation recognizes that fault is not
necessary if compensation is to be provided. All employers are expected to make
contributions on behalf of employees and if an employee negligently injures
himself or herself, compensation is provided according to provincial workers’
compensation legislation.

Products Liability
CDN courts apply principles of negligence in product liability matters. P.L. was developed thru
considerations of both contract law + tort principles.
Contract of sale is essential for a P.L to arise
Courts have now extended DoC to others eg. Assemblers, installers, importers etc
 Product Laws
o United States: Strict Liability
 covers product defects and consumer safety
 U gotta be aware of it because NAFTA permits freer flow of products
across the border into the United States

 Canada: Risk-Utility Analysis

 lawsuits for product liability are brought against the manufacturers based
on breach of warranty or on strict liability
 lawsuit is usually brought against engineer only in case of
alleged negligence
 Donoghue v. Stevenson: Duty of care by manufacturer to show he intends his
products 2 reach the ultimate consumer in the form they left him. (Snail in a drink
that poisoned someone)
In products liability cases in the United States, a manufacturer may be strictly liable for any
damage that results from the use of the product even though the manufacturer was not
negligent in producing it. Canadian products-liability law has not yet adopted this “strict liability”
concept, but the law appears to be developing in that direction.

Vicarious Liability
Employer is vicariously liable for the negligent performance of an employee. If an employee
commits a tort in the course of employment, the employer will be vicariously liable for the
damage caused.
This is consistent with the basic premise of tort law- purpose is to compensate the injured party.
The employer provides compensation because it is presumed that the employer is in a better
financial position than the employee.
Employees are also potentially liable in tort. An example is the case of "Northwestern Mutual
Insurance Cov JT O'Bryan& Co," decided in 1974 by the British Columbia Court of Appeal.
Hence tort liability can apply vicariously to the employer, and the employee will also be
personally liable for the tort the employee has committed. To protect its employee engineers,
therefore, a corporation providing engineering services should ensure that its professional
liability insurance policy extends to cover the liability of both the corporation and its employee
engineers.

However:
Edgeworth Construction decision:
The Supreme Court of Canada made some very important statements about the potential
liability of an engineering firm, and of individual employee engineers.
A seven-member panel of the SCC unanimously decided that the contractor was entitled to sue
the engineering firm but was not entitled to recover from the individual engineers.
Reasoning:
 Six of the seven judges found that the individuals owed no duty of care to the
contractor, and therefore could not be liable to the contractor. (There was no
contract between the individual and the contractor.)
 1 judge indicated that he was in general agreement with the others, but added
some interesting comments about the individual engineers:
 TL;DR: There are policy reasons why the engineers shouldn't be
subjected to a duty to Contractor, who was reasonably relying on the
firm's skills. The situation of the individual eng.s is different: They may
have expected Contractor to rely on their work, and put reliance on the
firm's pocketbook and not theirs for indemnification…
While the reasoning of all of the judges may give some comfort to individual engineers, it does
not support the conclusion that an individual engineer employed by an engineering firm will
never be personally liable in tort.
Concurrent Tortfeasors
At times, torts concur to produce the same damage. It is possible for more than one party to be
liable in such a tort action. The defendants are said to be “concurrent tortfeasors.”
Corporation of District of Surrey Carrol-Hatch et al.
An architect had designed a new police station, and had engaged a firm of engineers to
perform structural design services. The building eventually underwent “extensive
structural change” because of settlement problems. The problems could have been
avoided had proper soil tests been conducted. After examining two shallow test pits, the
engineers had recommended to the architect that deep soil tests be taken. But the
architect had rejected the recommendation, and the engineers had submitted a “soils
report” to the owner on the basis of a superficial examination of the shallow test pits only.
Both the architect and the engineers were held liable to the owner. The Court of Appeal
agreed with the trial judge's apportionment of fault—60 percent to the architect and 40
percent to the engineers—in the circumstances. The court held that the architect and
engineers were concurrent tortfeasors; they had breached their duty to warn the owner
that additional soils test should be taken.

Standard of Care + Duty to Warn

Manufacturer must warn consumer of any dangerous potential of the product by labelling.
Lambert v. Lastoplex Chemicals

Economic Loss
Economic loss in absence of physical injury eg. Lost profits etc (not common).

Other Relevant Torts

 Tort of Defamation: damage to reputation by untrue statements
 Libel: in writing
 Slander: verbal
 Occupier's Liability: ensure safety of people entering a property
 Nuisance: Undue interference in comfortable and convenient enjoyment of plaintiff's
land
Module B: Contracts
Chapter 7: Contracts
For a contract to be binding and enforceable:
1. Offer is made and accepted
2. Mutual intent to enter into the contract
3. Consideration (exchange of something of value)
a. Note the definitions of Gratuitous Promise, and Equitable Estoppel (they
come up time and again on old exams)
4. Capacity (sober, of age, etc.)
5. Legality (cannot enforce a contract that is contrary to law)

Law will enforce the provisions of a contract. In some circumstances, law may intervene to
declare a contract void, voidable, or unenforceable, but will NOT intervene to impose more
favourable terms than those negotiated between the parties.
Parties can mutually agree to modify or extend contractual arrangements.

Assignment of Rights
Contractual benefits can be assigned to a 3rd party by a contracting party w/o the consent of the
other party to the contract.
If contracting pasties wanna limit this, they should provide that no rights under the contract can
be assigned ti a 3rd party w/o written consent of the contracting party.

Good Faith in Contracting

Honesty & integrity: Parties mustn't lie or knowingly mislead each other abt matters linked to the
contract. This doesn’t impose a duty of loyalty or disclosure tho

Chapter 8: Offer and Acceptance

Offer:
 A promise made by offeror to offeree
 Can be oral or written (preference for purpose of evidence).
  Until offer is accepted, it can be withdrawn by offeror UNLESS explicitly and
effectively irrevocable by its terms.
a. A bidder can withdraw its bid any time before the close of tenders.
 Offer lapses within reasonable timeframe
 If offeree purports to accept the offer subject to variation in terms, a counter-offer
is made
o Offeree becomes offeror

 Acceptance of an offer must be clearly communicated

 Business offers are usually subject to express terms

Rejection
 Rejection: an express or implied refusal to accept an offer. The offeree must
communicate the rejection to the offeror to make the rejection effective
 Terminates the previous offer

Misc
 In 2014 the SCC articulated “a duty of honest performance, which requires the
parties to be honest with each other in relation to the performance of their
contractual obligations."
 Courts will imply a term into almost all contracts that a party shall not interfere
with performance by the other party.
 Parties also have an obligation of good faith during precontractual negotiations if
they explicitly agree to negotiate in good faith or if there is a statutory
requirement to do so, as in collective bargaining.
 Either party can walk away from negotiations with impunity if they have not
formed a contract or explicitly agreed to negotiate in good faith, since there is no
implied obligation of good faith in precontractual negotiations.

Option Contract
 Another way to keep offer open for a certain period
 The right to accept the offer is preserved till the offeree decides to exercise the
option
 Offeror is precluded from making the offer
 Something of value (eg. Payment) is made at the time of entering the option
agreement to make the OC enforceable
  Common in mining where the party purchasing the option might carry out
exploration work before spending $ on acquiring the property rights

Manner of Communications
Timing
Revoking an Offer
Can revoke an offer anytime before its accepted. Generally, revocation not in effect till offeree
receives notice of revocation.
 If revoking, do it asap by phone if possible
 If an offer does not give a time limit for acceptance, then it is assumed to be open for a
commercially reasonable time.

Acceptance
 Unless parties agree to comms by post, an acceptance is effective only when
received by offeror
 Once an offer has been accepted, a contract has been formed.
 Signing or executing the contract usu. Just a formality. Commencement of
performance by both parties of an unexecuted contract is proof of an enforceable
contract.
 Then, neither party can later deny the existence of a contract.
 Offeror is entitled to specify the mode of acceptance, eg. Email etc
 Acceptance may be communicated by conduct.
 Ex: if a potential client offers to pay a consultant to perform a site
inspection, the consultant accepts the contract by starting to perform the
inspection.
 Exception: Procurement: is the purchase of goods or services.
 Large-scale procurement often occurs through a bid process.
 An offer in the form of a bid/tender is considered fixed for a set period
of time before the bid is accepted.
 Parties soliciting bids need time to evaluate them and may insist that
they remain irrevocable until the end of the evaluation period, usually
30 to 60 days.
 Bidders relying on suppliers and subcontractors in order to put a bid
together require that the supplier and subcontractor prices be
irrevocable for the same period.
  Postal acceptance rule: When regular mail is used, acceptance is communicated
when the communication is placed into the mail system.

Governing Law
The law of the place where the acceptance becomes effective is applicable unless otherwise
agreed upon

Chapter 9 - Intent
Letters of Intent
 Not an agreement, but to express interest in proceeding with a transaction
 Unenforceable
 Doesn't contain the essential terms of a contract but can establish terms for
negotiation, and create moral obligation b/w the parties to negotiate in good faith

Chapter 10: Consideration

Consideration
 To be considered irrevocable, offer must contain an enforceable promise not to
revoke.
 What makes the promise enforceable is consideration
 Consideration: something of value exchanged (each give and receive, otherwise
it's an unenforceable' gift') by contracting parties. OR a seal on the doc (not
engineers seal).
 Payment not a requirement; exchange of promises counts, each promise
representing sth of value
 Eg:
o Client's consideration is the promise to pay the consultant’s fees
and expenses
o Consultant's primary consideration is the promise to perform the
design work
 Amendments (Change orders) must be supported by new consideration
(fresh consideration) to be enforceable (i.e. cant be the same work u
promised to do before on the same timeline and everything)
  Courts generally not concerned with adequacy of consideration as long as no
fraud, duress, etc. occurred. You are free to enter into a shitty unfair contract

If no consideration
 If no consideration, no contract is formed unless the document is sealed. (not the
Peng stamp seal)
 2 types of seals: Corporate & individual
 Important in tendering: an 'irrevocable' offer w/o consideration or seal is just a
gratuitous promise, not legally binding.
 Offeror can revoke anytime

Equitable Estoppel
 Equitable estoppel: A means to obtain an equitable result of a gratuitous promise
isn't kept
 There may be relief for the party that relies of the GP

Chapter 11: Capacity

Not everyone has capacity to enter into a contract.
Minors
Contract w. a minor is enforceable only by the minor, unless contains something necessary to
the minor (eg. Food, shelter)

Mental incompetence
 Intoxication, etc
 Unenforceable by the other party IF they were aware or should have reasonably
been aware of the incompetence/intoxication
 AND the intoxicated person should repudiate the contract asap

Corporations
 If it’s clearly beyond the powers of a contracting company to carry out the
described obligations, it's NOT enforceable.
 Incorporating statute must provide that the purpose of the proposed contract is
within the corporation's powers
Chapter 12 - Legality
Contrary to statute law
Contract unenforceable if the purpose of the contract us unlawful, eg. Electrician who did the
work was unsilenced

Contrary to common law (against public interest)

 Contract against public policy may be illegal/void according to common law
 Eg. Restraints of trade are against public policy
 Eg. Non-competition agreement - purchaser has to persuade the court
the terms are reasonable and don’t affect public interest
 Eg. Courts are reluctant to enforce restrictive covenants that
would severely limit an employee's ability to earn a living

Chapters 13 – 15 Statute of Frauds, Misrepresentation & Mistake

note the definitions and legal implications.

Chapter 13 - Statute of Frauds

Statute of Frauds Stipulates that certain types of contracts must be in writing to be enforceable.
Most relevant types are:
 Contracts relating to land
 Guarantees of indebtedness

An indemnification doesn't need to be in writing to be enforceable.

Contract of Indemnification: 1 party (indemnifier) promises to compensate the other party
(indemnity holder) for any loss or damage
Contract of Guarantees: Third party (guarantor) guarantees the performance of a contractual
obligation by another (principal debtor) to the creditor
 If principal debtor fails to fulfil obligations, guarantor fulfils it

Unenforceable =/= Void

Verbal contract can be unenforceable by S of F, but won't be treated as void. Courts will
recognize it forcertain purposes.
Voiding a Contract
Courts void a contract only in rare circumstances, including:
  mistake, misrepresentation, duress, unconscionability, frustration, and
impossibility. More later.

Chapter 14 - Misrepresentation. Duress, Undue Influence

Misrepresentation
Misrepresentation: False statement
 If made to get a third party to enter into a contract, misled party can apply to the court to
have it rescinded (cancelled)
Innocent Misrepresentation: Person making a false assertion without knowing the assertion in
false.
 Remedied by remission (cancelation) of contract. The deceived must repudiate (reject
the validity of) the contract within a reasonable amount of time.
Negligent misrepresentation: similar to above, plus made without due care or skill.
Fraudulent Misrepresentation: Knowingly or without belief in its truth, or reckless/careless to
whether it is true or false.
 Deceived party is entitled to rescind the contract and claim compensation for damage
 Can sue for damages or deceit

Misrepresentation in engineering specs

Contractor may be entitled to rescind construction contract
Errors in estimates by architect/engineer don't entitle the contractor to money

Duress
 Contract induced by intimidation, violence is voidable
 The threat or actual violence must be directed to contracting party or close relative
 Economic duress: Threat involves economic loss

Undue influence
 One party to a contract dominates the will of the other to coerce them into an unfair
agreement

 Dominated party is entitled to be relieved of contractual obligation if they can prove they
had no choice but to comply with other party's demands

 Construction cases involving duress usually focus on modifications to the contract made
during performance.
Chapter 15 – Mistake
 Rare that court provides relief to a contracting party that has made a mistake
 To make contract voidable, mistake must be all 3:
a. Material (significant)
b. Mutual
c. Exist at the time the agreement was made
 Rectification occurs if two parties have reached agreement but have recorded the
promises of the agreement inaccurately in the contract (called a common
mistake):
 contract exists as was orally agreed
 one party can apply to the court for an order of rectification
o For correcting a common mistake that is of secretarial or recording
nature

Unilateral Mistake: made by one party

 Offeree cant accept an offer they know contains mistake(s)

Chapter 16 - Tendering (Contract A)

Ron Engineering - Concept of Contracts A and B
 Before, bids in response to invitations for tender were considered offers. Ron
Engineering changed this: Now, an invitation to tender itself may constitute an offer to
contract, upon which a submission of a bid in response to the invitation may become a
binding contract. This contract is called Contract A.

 Essentially, the landmark principle endorsed in Ron Engineering is that there are 2
separate contracts arising from the tendering process:

 Contract A: Formed when bids are submitted pursuant to the invitation to tender
 Imposes certain obligations pursuant to the provisions of the tender
package
 Contract B: ultimate contract formed on the award of the contract that addresses
the substance of the work or services to be performed
 i.e. arises on the selection of a wining bid
 The Ron Eng. decision:
 may be advantageous to owner when a contractor has made a clerical mistake in
tender docs

 May be potentially disadvantageous in contractual negotiation process

 The creation of a number of Contracts A with various bidders,
each subject to the provisions of the tender package, may place
the owner in a very difficult position if owner chooses to depart
from the provisions of the instructions to bidders.
 If it does so with one bidder, the owner may risk a Breach of
Contract (BoC) action under one or more of the other Contracts A.
 Contract A concept often provides basis for contractor to take issue and make
claims
 Eg. if another bidder receives more advantageous opportunities to
negotiate with the owner prior to the contract award

 Ron Eng =/= that contract A will always be formed or that irrevocability of the tender will.
Depends on T&Cs of the tender call
 Implied obligations could arise
 Important to treat all bidders fairly with preference policies stated in the contract
docs (eg. Preferences for local contractors, etc)
 If owner is unhappy with the bid prices, they can't try to negotiate a reduced
price with one or more bidders. BoC
a. Better to reject all bids and adjust scope
  Compliant bid: Bid compliant with all T&Cs in tender docs
 Owner not obligated to accept a noncompliant bid
 If a noncompliant bid is accepted, the other (compliant) bidders
won’t be happy; buyer might be held liable to the lowest compliant
bidder and may have to pay damages equal to the lowest
compliant bidder’s anticipated profit on the project.
Subs
If subcontractor submits a quote to the contractor and their quote is incorrect (too low or
contains mathematical error), it's on them. Contractor can refuse to let them withdraw once the
bidding period is closed.
 Sub's bid is irrevocable while the general contractor's is
 Contract A’s are enforceable
 Re-negotiations = counteroffer and release the general contractor's commitment
to the original sub

Implied terms
Contracts can contain implied (i.e. not stated) terms. Eg: Only compliant bids will be accepted,
all bidders will be treated fairly and equally, etc
More info in ch 17.
Potential Liabilities for Engineers and Consultants or Tendering Matters
If eng makes a recommendation to the owner on a bid and something is wrong with the bid, the
eng may be liable
 May be required to indemnify owner

Bid Shopping
Bid shopping:
 negotiations taking place after tender closes
Or:
 Soliciting a bid from a contractor you don't plan on dealing with, and disclosing it
or using it in an attempt to drive prices down with contractors you do want to deal
with
 Inconsistent with Contract A process premised on fair and equal treatment.
Unethical

Double N Earthmovers had a provision in Contract A permitting negotiations with the lowest
evaluated tenderers. This was permitted by court.

Tendering
The Bidding Process
Contract formation (offer and acceptance) in the purchase of goods or services is most often
accomplished through the bidding process.
A buyer may invite bids by:
1. by invitation only to a select group of prequalified potential sellers
2. by open invitation,
3. through a bid depository
Stages:
Preparation of Bid Documents
 Drawings, specifications, conditions, instructions to bidders, and the invitation to bidders

 Tender docs describe the process, the required elements, the terms, and the process
and criteria for awarding the contract.

 Should contain acknowledgements from the bidders that they have no claim against the
buyer or the buyer’s consultant for damages resulting from the tender process. (not
always enforced)
  invitation usually reqs bidders to conduct independent investigations. The invitation also
allows the buyer to allocate risks and obligations to the seller.

 Invitation should also define the buyer’s right to reject bids and to determine the rules for
acceptance.

Privilege Clause
 Gives owner the right not to accept the lowest bid (or any bid)

 Doesn’t mean owner can attach an individual condition to its offer

 Bidders may find themselves bound to unusual privilege clauses, and the
successful bidder bound to enter Contract B upon award of the contract to them

 Means if none of the bids are what were expected, or sth happens and project no
longer feasible, PC can allow owner to reject all bids and cancel the project. Can
also adjust scope and open tendering again for a new proj

Submission of bids
 Potential sellers estimate labour, material, and equipment. Suppliers often obtain prices
from a further level of suppliers before submitting their prices to the ultimate bidder.

 To prevent the bidder from using supplier’s prices against each other, suppliers tend to
submit their prices as late as possible. Seller often cannot investigate or evaluate
supplier prices before deciding whether to use those prices.

o Ex: if a bidder receives a v low price from an unfamiliar electrical supplier, will
have to either use the price & risk the supplier being unreliable or that the price is
incorrect; or don’t use the price, in which case a competitor may use it and be
awarded the contract.

 The seller then submits the bid in compliance with the timing, form, and content in the
instructions

 If the bid is late, the buyer likely has to reject it

Receipt and Examination of Bids

 Buyer usually examines bids with a consultant

 If a buyer intends to negotiate with any bidders, that intention must be made very clear in
the invitation bc its otherwise NOT allowed
Contract Award
Acceptance of an offer determines contractual rights between the buyer and the successful
bidder. It may also determine rights, obligations, and liabilities of other parties, including
suppliers and sureties.
To avoid liability for wrongful award of a contract, buyers and their consultants should adhere to
the rules:
1. All bidders should be treated fairly, in good faith
2. Reject late or noncompliant bids
3. Bidder cant be asked or permitted to clarify an ambiguity in his or her bid or provide
further information after tender period closed.
4. No negotiations before award, unless the bid process clearly indicates that negotiations
will occur.
a. In this case, rules abt negotiations should be clearly defined.
b. Don’t share info about bidders to other bidders (e.g., buyer saying to Bidder B
that Bidder A’s price is X and that Bidder B will get the contract if Bidder B’s price
is lower than X).
5. If contract needs to be changed, they should generally be made and discussed only after
the bid has been accepted.
6. The award should be made in accordance with the criteria stated in the tender
documents, although price is often considered the most important criterion.

Chapter 17 & 18 Contract Interpretation and Discharge

Note definitions/implications of Contra Proferentem, and Parol Evidence Rule (Latin memory
aids: "against (contra) the one bringing forth (the proferens)." Parol = oral/verbal)

Chapter 17 - Contract Interpretation

 If parties to a contract dispute the meaning of sth in the contract, the dispute can be
deferred to the court which interprets its most reasonable meaning

 Parties will be bound to court's determination

 Liberal approach: takes into account the intent of the parties

 Downside: may lead to too much speculation
 Strict approach: Focuses on precise words in the agreement and their dictionary
def'n

Contra Proferentem Rule: Where a contract is ambiguous, it'll be interpreted against the party
that drafted the provision
 Convenient basis to attack a poorly drafted/ambiguous document
Parol Evidence Rule: If a condition was agreed verbally but isn’t included in the contract, the
condition is not part of the contact
 Exceptions: ex: where it can be substantiated that a contract was to be effective
only if an agreed-upon condition were to occur
 Pym v Campbell

Implied terms
 Sometimes parties overlook the inclusion of an obvious term. Where it's clearly
reasonable to do so, courts may give business efficacy to an agreement through
'implication of terms'
 Ex:
 work and all materials are appropriate for the intended purpose
 Work would be completed in a reasonable time without undue delay

Chapter 18 - Discharge of Contracts

Performance as a Means to Discharge
 Contract ends when all parties have completed their respective obligations
 Otherwise, contract remains in effect.

Agreement to Discharge
Parties are always free to amend the contract. Therefore. they can agree to cancel a or
terminate a contract upon mutually agreed terms

Discharge pursuant to express terms

 It's advisable to include a provision that any or all parties may terminate upon the
occurrence of certain events
 Ex:
 Bankruptcy of one of the parties
 If engineer determines the contractor has failed to complete the work
properly or otherwise comply with contract requirements
Discharge of Frustration
 Sometimes, without default by either party, changing circumstances may radically
change the obligations of the parties. Contract is frustrated when an unforeseen
event occurs that makes the performance of the contract either impossible or of
no value.
 This doesn't mean a contract can be discharged just because changing
circumstances may make performance more onerous than contemplated.
 Discharge by frustration is applied by court only where exceptional
circumstances (that weren't contemplated by the parties) arise AND discharge is
the ONLY reasonable sol'n
 Force Majeure provision: usually provides that timing for completion will be
extended in event of unforeseeable things you have NO control over.
 Ex: war, flood, labour disputes, etc…
 Doesn't include labour shortages etc. you should foreseen the possibility
for that

Waiver & Estoppel

 Waiver of rights occurs when by words or conduct a party ceases to enforce
certain of his or her contractual rights
 Where by word or by conduct, one party causes another to reasonably
believe that certain rights will not be enforced, and where subsequent
enforcement of those rights would be unfair, Canadian courts generally
rule that a waiver has occurred.
 When one party waives rights, those rights are subject to:
 estoppel—the other party starts relying on the representation or action
of the first party rather than on the contract.
 Ex: if a lease requires rental payments by the first day of
each month, but the landlord consistently accepts
payments on the third of the month, then the landlord is
estopped from requiring payment on the first.
 To again enforce the strict terms of the lease, the landlord
must provide reasonable written notice that he or she
intends to enforce the original term of the lease.
Module C: More Contracts
Chapters 19 & 20
Notes: Note definition of Quantum Meruit

Chapter 19: Breach of Contract

 Party that fails to perform contract obligation has breached the contract.
 Called 'default'; the 'defaulting party' has committed the BoC.
 Non-defaulting party is entitled to certain remedies, depending on contract terms
and the nature of the breach
 If a breach prevents substantial completion, it MAY be cause for discharge of the
contract

Condition: an obligation essential to the contract

Warranty: an obligation NOT essential to the contract

Repudiation
 If one party expressly tells the other that they have no intention to perform
contractual obligations, they have repudiated the contract.
 Doesn’t have to be verbal; sometimes you can tell by their actions
 Non-defaulting (ND) party can:
1. Ignore the breach and the contract continues
2. Assume the contract has been discharged by the repudiation
o In this case, the ND party can claim damages against the
defaulting party (DP)
o If the ND party elects to discharge, the ND party is required to
communicate this to the DP 'with reasonable dispatch'
 The right to elect to discharge the contract means the DP can't avoid contractual
obligations by announcing that they don’t intent to fulfil the contract.
Remedies
 ND party is entitled to dmgs for losses incurred as result of BoC
 Injured party may also be entitled to quantum meruit remedy: 'as much as is
reasonably deserved' (more later); may also be eligible for equitable remedies
specific performance and injunction (more later)
 Court determines the amt of dmgs to be awarded. Dmgs awarded should flow
naturally from the breach or be reasonably foreseeable by both parties at the
time of entering into the contract.
 Direct damages: immediate, quantifiable losses directly linked to the breach
 Generally recoverable
 Always foreseeable
 Indirect damages: 'consequential' to the breach including things like loss of
profits, fines, etc

Duty to mitigate
Party that suffers a loss thru BoC must make reasonable steps to mitigate the amt of dmg
caused

Penalty Clauses
 Contracts often have provisions whereby a party is req'd to pay prescribed dmgs
if a certain event occurs, eg. If contract isnt completed by a specific date
 At the time of entering into the contract, parties must make genuine attempt to
pre-estimate the amt of dmgs likely to occur as a result of such a breach,
otherwise the court will NOT uphold such provisions
 These pre-estimated damages are called liquidated damages

Quantum Meruit
 Eg. If services are performed w/o having reached an agreement abt what
payment would be provided from them, the court will award payment by applying
quantum meruit (as much as is reasonably deserved)
 QM may apply in other instances, eg. if a contract does provide for payment but
the party obligated to pay repudiates the contract and the innocent party treats it
as discharged
 IF a repudiation is decided by courts to not have been appropriate
Substantial Compliance
 A contractor may substantially comply with the terms of a contract but fail to
comply with some minor aspect. Contractor will be entitled to be paid the contract
cost minus the damage caused by any such failure
 Doctrine of substantial compliance: for doctrine to apply, deficiencies must be
minor

Specific Performance + Injunction

 Equitable remedies to supplement the remedy of damages, if needed

 Specific Performance: Court may req a party to perform a contractual obligation

 Often used in land sale contracts where vendor req'd to convey the sale
of land (or other unique items that can't easily be bought elsewhere)
 Injunction: court order prohibiting a party from the performance of some act, eg.
BoC
 Court will only grant if contract contains a 'negative covenant' - a promise
to not do something

Chapter 20 - Limiting Liability by Contract

 Exclusionary Clauses or exculpatory provisions: provisions in contracts to limit
liability, eg. Limits for dollar amounts if BoC damages occur
 Doctrine of Fundamental Breach (NOW RETIRED*): When the wording of an
exculpatory clause is disregarded in the circumstances of a fundamental BoC
 See: Tercon case (Tercon Contracts v British Colombia)
 *Now, to determine if a clause is applicable where there's a BoC, you look at the
'true construction' or meaning of the contract
 Reason is freedom of contracts - you are free to accept a shitty contract
term
 Exception: if it goes against public policy

Chapter 21 - Agreement between Client and Engineer

 Contract b/w the client and eng must include all the essential contract elements.
Usually states that the engineer is to provide engineering services in connection
with the particular project
 Doc won't usually specify the degree of care req'd of the eng; that's an implied
term
  Standard of performance is the standard expected in tort law

The Agency Relationship

Client = principal Engineer = agent
As agent, eng must act only within the scope of their authority, as agreed upon with the
principal. Otherwise risks liability for damages resulting from their actions

Limiting Liability by Contract

 Contract can c0ntain a provision whereby the engineer limits their liability for
damages resulting from performance of engineering services
 Can communicate extents of your professional liability insurance
 Can limit engineer's liability to the eng's fee on the project

Engineer's Compliance with the Law

 Engineer must comply with:

 Common law principles relating to tort and contract

 Applicable statutes and regulations
o Have reasonable knowledge of Ontario Bldg Code Act, The
Drainage Act, etc
o Obtain legal advice when needed

Chapter 22 - Concurrent Liability in Tort and Contract

 Since the standard of care expected by an engineer = the SoC by which an
engineer's performance is measured in tort, engineer can be concurrently liable
in tort AND contract
 The measure of damage for BoC =/= the measure of damages for tort
 Limitation periods may differ for tort and contract

Chapter 23 Concurrent Liability in Tort and Contract | Duty of

Honesty

Chapter 23 - Duty of Honesty

 Implicit in DoC is duty if eng to act w honesty
  Fraud = tort of deceit
 Also a criminal offense
 Violation of principal-agent relationship examples: bribery/secret commission, 'gifts' to
gov etc
 Fines, imprisonment

Chapter 24 Construction Contracts

Engineer in contracts
 Eng. Is not usually party to a contract; usu. Has separate contract with owner
(client)
 Eng may be authorized to make decisions on:
 Extras
 Issuing payment certificates
 Eng must act judicially and unbiased towards the owner
 Courts expect a high DoC when it comes to inspections

Eng's Advice to Contractor

 In most contracts, contractor as complete ctrl over construction methods and
procedures. Interference by eng. May cause contractor to claim they were delayed by
the engineer

 If eng is expected to give them advice where the contractor is reasonably relying on the
eng's perspective (as is consistent w tort law principles), the eng must make a
judgement call:
 Unwarranted interference w contractor's methods may give rise to a dmg claim
 Eng cant allow work to proceed incorrectly, however

 Usually, an engineer on a construction project is authorized to inspect the construction in

order to ensure that the work proceeds in accordance with plans and specifications

Eng and decisionmaking

In some cases, a client tries to pressure a professional into making a design choice that should
be made by the client. The owner might simply say, “Do whatever you consider appropriate.”
If possible, the professional should avoid being drawn into making the choice. If that is not
possible, the professional should inform the client in writing what choice is being made, for what
reason, with what possible consequences, and at what cost. The written communication should
also advise the client that if he or she is not happy with that choice, the professional must
receive immediate notification so that the decision can be reconsidered.

Types of Project Delivery Systems

Request For Qualifications (RFQ): choosing a project participant based solely on the
qualifications of the respondents, rather than on other criteria like price. Often for selecting
professionals.
 Typically involves only a generic project description (e.g., a new computer software
system) & a framework outline of the services required (e.g., a software engineer to
design and implement the project).
Invitation to Tender or Tendering: An invitation to tenders, also known as a call for tenders or
tendering, is commonly used when numerous potential sellers can supply goods or services.
 Buyer has a clearly defined scope of work and requests prices from either a selected list
of potential sellers or more generally from the industry at large. Used when buyers are
looking primarily for the lowest price response, which will be accepted without
negotiation.
Request For Quotation: informal process where requests are made with no formal closing time
or tender closing conditions. A buyer uses a request for quotation when the objective is to find
the lowest price. Useful if negotiation may be necessary.
Request For Standing Offers: buyer prearranges prices, terms, and conditions with sellers for
frequently ordered goods or services. The goods or services are not purchased until the buyer
issues a “call-up” or requisition at the pre-agreed rates.
Request For Proposals (RFP): buyer invites potential sellers to propose a solution to a particular
problem, but the details in these potential solutions are less well developed than those in a call
for tenders. The success of a proposal submitted in response to an RFP is normally based on
the quality of the proposed solution, not only on price.
 Each potential seller that submits a detailed proposal responding to the RFP is called a
proponent. Buyer expects to negotiate a final contract with the best proponent or one of
the top proponents, rather than proceeding through a formal tender.
Letter Of Interest or Prequalification: Screening process where potential sellers prequalify, which
limits the ultimate call for tenders or request for proposals to a small number of qualified sellers.
Sellers submit their qualifications that relate to a future request for proposal or invitation to
tender so that the buyer can identify the seller’s level of expertise.
Module D - Other Considerations in Law
Chapter 33 – Intellectual Property
IP Rights
 Rights that relate generally to patents, trademarks, copyrights, and industrial designs are
sometimes called “intellectual property rights.”
 The Patent Act, the Trade-marks Act, The Copyright Act, and the Industrial Design Act,
all federal legislation, govern these rights.

Peep my chart here that compares the IP types in condensed format:

[Link]
exam

Otherwise, keep reading longform info below

Patents of Invention
 Invention: any new and useful improvement in any art, process, machine, manufacture
or composition of matter.
 A patent grants the owner the exclusive right to make, construct, use, and sell the
invention for the term of the patent.
 Requirements to Gain Protection: Invention must be new, such that it is not generally
known to the public; it must be useful, such that it must have a commercial application
and actually do what it claims to do; and it must be inventive.
 if the applicant discloses an invention to the public before filing a patent application, the
applicant has one year to file the application or forfeits the ability to patent it
 If a third party discloses an invention to the public before the applicant files a patent
application, the ability to file a patent is automatically lost.
 Principal rights protected are the exclusive right to make, sell, and use the invention. In
return, the invention must be sufficiently described to permit others to make the invention
after the term of protection expires.
 Employer holds all rights to an invention developed in the course of employment. This
may extend to an invention created on an employee’s own time as long as it relates to
the employment
 Term of protection: for any new patent is 20 years from the date that the application is
filed.
Trademarks
 Trademarks protect marks used to distinguish goods or services. They are most
commonly used to protect the name associated with a product, a service, or a product
and a service, but they can also cover designs.
 Requirements to Gain Protection: A TM may be registered if a company or individual has
been using it or making it known in Canada. Can also register internationally. Must be
distinctive.
 Principal Rights: Exclusive right to use the TM in association with specific goods and/or
services.
 Term of protection: 15 years, but it can be renewed indefinitely.
o However, owners must use and actively protect TMs by monitoring and
prosecuting infringements. Failure to use/protect a TM results in loss of the TM.
 Lisencing: Third parties must be licensed under the authority of the trademark owner.
The terms of the licence agreement must provide the trademark owner with direct or
indirect control of the character or quality of the wares/services to be provided by the
licensee.
o If no control provided for or exercised, it's grounds for invalidating the registered
trademark.
o If a trademark is used by licensee, it is advisable to include in packaging and
advertising materials a notice of the identity of the trademark owner and the
existence of the licence as the notice will result in a deemed quality control.
 Infringement: May be restrained from continuing to use the mark; that person may also
be liable for damages that resulted from the infringing of the trademark. Other remedies
are available for infringement including an accounting of the defendant's profits and
injunctive relief. Forgery of a trademark with intent to deceive or defraud the public or
any person is an offence under the Criminal Code of Canada. The offence is punishable
by fine and imprisonment for up to two years.

Copyright
 copyright protects the expression of words and data in original literary, musical,
dramatic, and artistic works
 Must be in written form or performed, recorded, or communicated in a form such as radio
or television.
The ideas behind these works are not protected; anyone can reproduce the same
concepts using different words without breaching copyright.
 Requirements to Gain Protection:
o Author must ensure that the work is original and permanent, using the author’s
own work or skill. It must also be published.
 o Copyright protection does not require registration. Just add the ©

 Moral rights protect the artistic integrity of the work, such as the manner in which a
painting is displayed
o Moral rights include the right to prohibit distortions, mutilations, and
modifications, and the right to prevent others from claiming authorship
 Term of Protection: Copyright is protected for a term of 50 years after the end of the
calendar year during which the author or last living author dies.
 Principal economic rights: publication, reproduction, performance, exhibition, translation,
dissemination, and authorization

Industrial Design
 I.D. Act protects the shape, configuration, and general look of mass-produced items.
Examples of items protected by the Act include furniture, toys, household items, and
vehicles.
 Designs must be novel and original but must have an aesthetic purpose.
 Exclusive right: to use the design.
 Term of Protection The term of protection is 10 years from the date of registration

Trade Secrets
 Formula, processes, methods, techniques, specifications, descriptive materials and/or
software programs, or information contained or embodied in a product; which
 (b) has been developed independently or assembled from confidential or public
sources;
 (c) is not generally known;
 (d) has been the subject of reasonable efforts to maintain its secrecy; and
 (e) has economic value if it is used by another.

 You maintain secrecy by requiring employees to sign employment contracts with

confidentiality clauses. Trade secrets have no legal status in patent law, so you must
enforce confidentiality using contract law or tort law

 Canada under the common law tort of unlawful appropriation of trade secrets or breach
of confidential information, breach of express or implied contract and breach of fiduciary
duty.

 3 criteria to count as infringement:

 [Link] the information qualifies as a TS,
 [Link] must be misused,
 [Link] information & materials have been imparted to a recipient in circumstances
importing an obligation of confidence
  No term for protection. If someone independently discovers your secret, the person may
patent it and prevent you from using it.

Chapter 36 Employment Law

Health and Safety
 Criminal Code: Anyone who undertakes, or has the authority to direct, how
another person does his or her work has legal duty to prevent bodily harm to that
person and any other person arising from that work. Section 217.1 states
 A conviction for criminal negligence causing bodily harm can result in
imprisonment.
 A company can be found negligent not only through the conduct of one of
its representatives but also through the combined acts or omissions by
several representatives.
 Canada Labour Code (CLC) sets out OH&S requirements for federally regulated
workplaces in Part II, and includes regulations titled Canada Health and Safety
Regulations (CHSR).
 CLC & CHRS apply to work performed on federal government property,
including Aboriginal reserves and federal government buildings.
 Each province and territory has its own OH&S legislation.
 other statutes throughout Canada contain safety regulations, many of which are
industry specific. For example, regulations have been created pursuant to the
Canada Transportation Act.

Responsibility for Health and Safety

 All employers and employees should be actively involved in preventing
accidents. Ex:
 developing, implementing, and enforcing organizational and project-
specific safety plans, and auditing thereof
 providing training and supervision of all employees
 maintaining clear records of all safety-related activities, including training
 enforcing appropriate discipline for employees who violate OH&S
requirements and policies
 the law will place such responsibilities on anyone who has authority over others
on a worksite or who, by nature of their role, is in a position to identify safety
hazards or concerns.
  OH&S legislation generally requires that one party is required to take overall
responsibility
 for OH&S on a project site. In some provinces this contractor is called the prime
contractor,
 and in others, the constructor.
 By default, owner of a site is the prime contractor or constructor.
However, owners may designate one (and only one) prime contractor or
constructor by contractual agreement,

When accident occurs

 workers and employers must follow prescribed OH&S procedures for reporting
and investigating accidents, and cooperate with the OH&S regulator conducting
the investigation.
 Usually includes preparing and submitting a report to the appropriate
OH&S regulator abt causes and contributing factors that may have led to
the accident.
 Often, people involved in an accident may volunteer information about their role
or the company’s role in an accident that may be influenced by guilt or fear.
Important for companies to ensure that, where possible, its employees are
 aware of their rights and responsibilities in terms of participating in such
investigations.
 Statements and evidence should be provided only after receiving appropriate
advice from a lawyer or other designated person within a company.

Ontario-Specific, not sure if worth studying for NPPE

Human Rights Code
 In Ontario it establishes that everyone has a right to equal treatment with respect
to employment, without discrimination (the usual types, age etc)
 every employee has the right to be free from sexual harassment in the
workplace.
 The right to “equal treatment w.r.t employment’ protects individuals in all aspects
of employment, including applying for a job, recruitment, promotions, terms of
apprenticeship, and terminations.
 Where an employee requests accommodation for a Code-related need, an
employer must take steps to determine whether that employee can be
appropriately accommodated short of undue hardship.
  A requirement, qualification or factor that is neutral and non-discriminatory on its
face, may nonetheless exclude, restrict or prefer some persons because of a
ground set out in the Code.
o Called “adverse effect” or “constructive” discrimination

 Where an employee establishes that a standard or requirement imposed by an

employer is prima facie discriminatory, the onus shifts to the employer to prove
on a balance of probabilities that the workplace standard or requirement is:
o rationally connected to job performance;

o Believed to be necessary to the fulfilment of that legitimate work-

related purpose; and
o necessary to the accomplishment of that legitimate purpose

i. This includes a req to demonstrate that it is impossible to

accommodate without undue hardship.

OHSA
 Three basic employee rights:
1. right to know
2. right to refuse dangerous work
3. right to participate

 Act imposes duties on those who have any degree of control over the workplace,
materials or equipment, or direction of the workforce.
 Duties of:
o those w control: take every reasonable precaution to protect workers’
health and safety including against harassment and violence
o workers: take all reasonable and necessary precautions to ensure their
own health and safety as well as the health and safety of their co-
workers.
 The Act provides that a health and safety committee is required at most workplaces
where 20 or more workers are employed.

 19 or fewer: the Ministry of Labour is authorized to require an employer, constructor, or

group of employers to establish a health and safety committee. Where a committee is
not required, a worker health and safety representative must be appointed by and from
the workers.
Contravention of the legislation
 penalties (as much as $100,000 for individuals and $1,500,000 for corporations).
Charges typically are laid following a critical injury or fatality in the workplace.

 Government ministries can inspect work premises and investigate workplace accidents,
work refusals, etc. They can also issue compliance orders or initiate prosecutions where
OHSA is not being followed.

 Criminal Code of Canada (CCoC) establishes a legal duty for “everyone who
undertakes, or has the authority, to direct how another does work or performs a task" to
take reasonable steps to prevent bodily harm to anyone arising from that work or task.

 Breaching this duty does not automatically constitute an offence under the
Criminal Code. However, if the individual or organization who breaches the duty
does so with reckless disregard for the safety of others and causes death or
injury, this may constitute an offence.

 Amendments to the Criminal Code focus on organizations and their employees who
“direct how another does work.”
 Under CCoC, criminal negligence causing death has a maximum penalty of life in
prison with no set fine. Courts can place an organization on “corporate
probation,” which may involve conditions such as providing restitution to victims,
publishing offences in the media, and implementing policies and procedures.

Chapter 32 - Regulatory Aspects and Ethics

Note: This is based off PEO
Disciplinary Hearings
 The regulatory statutes authorize what disciplinary action may be taken for
professional misconduct.
 Submission of a complaint to the committee
 The Committee examines the complaint and can then refer the matter to
the Discipline Committee.
 Discipline Committee is authorized (pursuant to Section 28 of the
Professional Engineers Act), when so directed by the Council, the
Executive Committee, or the Complaints Committee, to hear and
determine allegations of professional misconduct or incompetence.
 Disciplinary action may include: reprimands, suspensions, fines, and
cancellation of membership and licences.
 Decisions of disciplinary hearings may be appealed to the courts in accordance
with the provisions of the applicable regulatory statute.
  Penalty of practicing eng w/o licence is max. 25k for first offence and max 50k for
each subsequent offense

Litigation versus Disciplinary Matters

 In tort or contract or both, damanges are cause by eng's negligence.

 Damages are not a prerequisite in disciplinary proceedings.

 Disciplinary proceedings under the Professional Engineers Act usually proceed in
the form of allegations of professional misconduct or incompetence.
 Any conduct constituting negligence by tort standards will also constitute
professional misconduct.
 Even where no damages caused by negligence, eng can be sanctioned by the
Code.
 Ex: if a [Link] negligently prepared drawings and specifications, thye
could face disciplinary hearings even though construction hadnt taken
place.
Module E: Ethics
Sources:
[Link]
[Link]

Ethics and Problem Solving

 Philosophy – Derived from the Greek meaning “love of wisdom”
o Deals with search for truth and knowledge

Philosophy Branches
 Ethics – study of right and wrong, good and evil, obligations and rights, justice,
and social and political ideals
 Logic – study of the rules of reasoning
 Epistemology – study of knowledge itself
 Metaphysics – study of very basic ideas such as existence, appearance, reality,
and determinism

Four Ethical Theories • Mill’s utilitarianism • Kant’s formalism, or duty ethics • Locke’s rights
ethics • Aristotle’s virtue ethics

Aspect John Stuart Mill Immanuel Kant (Deontological Aristotle (Virtue Locke (rights
(Utilitarianism) [duty-based] Ethics) Ethics) ethics)

Core Greatest Happiness Categorical Imperative: actions Eudaimonia All individuals are
Principle Principle: actions are right if are morally right if done from duty (flourishing): moral free and equal,
they promote the greatest and according to universal moral virtue is about and each has a
happiness for the greatest law. developing good right to life, health,
number. The duration, character and liberty,
intensity, and equality ‘of Each person has a duty to follow achieving human possessions, and
distribution of the benefits those courses of action that flourishing. the products of
should be considered. would be acceptable as their labour.
‘universal principles for ‘everyone
to follow. Human life should be
respected, and people should not
be used as means to achieve
some other goal

Moral Consequences of actions Intentions and duty, not Character and

Focus (teleological). outcomes (deontological). cultivation of
virtues (arete).

Basis of Pleasure and absence of Rational will and adherence to Human nature and
Morality pain (hedonistic universal moral law. rational activity in
utilitarianism). accordance w
virtue.

Type of Consequentialist Duty-based Virtue-based

Ethics

Moral Determined by outcomes Determined by motivation Determined by

Worth of actions. (acting from duty). character and
habituation of
virtues.

Right That which maximizes That which can be universalized That which a
Action overall happiness. and respects rational beings as virtuous person
ends. would choose (the
“mean” between
extremes).

Role of Calculates consequences Determines universal moral laws Guides

Reason and utility. and duty. development of
virtues and finding
the mean.

View of Intrinsically good; higher Morally irrelevant; duty overrides A byproduct of

Pleasure and lower pleasures inclination. virtuous activity,
distinguished. not the goal itself.

Criticism Can justify immoral acts if Too rigid, ignores context and Vague and It is occasionally
they maximize happiness. consequences. culturally relative; difficult to
doesn’t give clear determine when
A conflict of interest may Conflicts arise when following a rules. one person's rights
arise when evaluating the universal principle may cause infringe on
benefits, or when harm. For example, telling a
distributing them equally. “white” lie is not acceptable, even another person's
if telling the truth causes harm. rights Also, people
occasionally

claim self-serving
“rights.”

Ultimate Maximizing happiness for Acting morally out of respect for Achieving
Goal all sentient beings. moral law. eudaimonia
(human flourishing
through virtue).

Justice
 Justice: “A state of affairs in which conduct or action is both fair and right, given
the circumstances”
 For an ethical dilemma, the decision must satisfy both the test of “rightness,” by
agreeing with the ethical theories, and test of “fairness “
  Four basic categories of justice, depending on the application
 Corrective Justice
o Fairness in rectifying wrongs: the wronged has the right to rectification,
replacement, or repair
o Two applications are relevant in engineering:

 Tort law
 Professional discipline
 Assoc.s deter unlicensed persons from practicing and
discipline licensed professionals who have been found
guilty of professional misconduct or incompetence
incompetence, negligence, and breaches of the Code of
Ethics).

Chapter 3 - Ethical Considerations

Ethics is the theory of morality. Moral principles are the standard of conduct required by society,
by an organization or group, or by an individual.
conflict of interest: when the professional has conflicting obligations to the public, the client, the
employer, the profession, or themself.
An ethical problem can often be solved by identifying the conflicting interests and obligations
and then determining which obligations or interests take precedence.

The Relationship between Ethics and the Law

 Legal consequences for most members of the public can be divided into two categories
 criminal consequences and civil liability.

 In the case of a design professional, there may also be a third category of

consequences: consequences that may arise out of disciplinary proceedings,
including temporary or permanent loss of professional status.
 In terms of severity:
o criminal consequences are the most serious because they can
result in imprisonment
o Civil consequences are usually in the form of monetary damages
awarded against a defendant
 o Disciplinary consequences for breach of a code of ethics may be
in the form of a reprimand, a suspension, a fine, loss of the right to
practise, or a requirement to undergo further training or review.
 criminal charges can be brought at the same time as civil and/or
disciplinary proceedings
 Criminal charges must be proved beyond a reasonable doubt (BRD), and civil
claims must be proved to a balance of probabilities (BoP)
 So if found guilty BRD by criminal court, ur almost guaranteed to be found guilty
by BoP
 Guilty of criminal proceedings = guilty of ethical breach
 Guilty of ethical breach =/= guilty of criminal acts
 Guilty of civil breach =/= guilty of ethical breach (eg unjust legislation like
slavery)

Code of Ethics
In order:
 duty to the public
 duty to the client
 duty to the employer
 duty to the profession
 Duty to self is usu ranked lowest
Duty to the public/public safety is paramount

Notes
 Negligence claims often focus on the duty to the public. The plaintiff has to prove on a
BoP that the defendant failed to meet the standard of care expected of an average
professional in the field. So, the plaintiff often calls an expert witness to provide an
opinion.

 An allegation by one professional that the work of another is unprofessional is a very

serious allegation and should not be made unless the breach is clear.

 During the course of performing duties, eng. may become aware of certain confidential
information, eg: a client’s construction budget. Must remain confidential, because a
contractor bidding or working on the project could make use of it to the owner’s
disadvantage.
 Exception: if duty to the public demands disclosure.
Dual Role of the Consultant as Owner’s Agent and Impartial
Arbiter

 Consulting eng will do the following for the client:

 evaluate and certify requests for progress payments
 evaluate claims for extra payment and delay
 issue the certificate of completion
 Provide advice abt selecting contractors
 Inspecting work for deficiencies
 act as the first arbiter of disputes between the owner and contractor

 In Performing these functions, the consultant must not allow any perceived or real
obligation to the owner to influence his or her decision such that it creates bias or a
decision that is unfair to the contractor.17

The consultant owes a duty to

 Owner- to protect against unfounded claims
 Contractor- to act fairly and impartially in evaluating the claim
 Consultant’s self-interest
o b/c approving a claim for extra payment may mean there was an error or
omission in the original design. Consultant is being asked to evaluate the
adequacy of their own design.

If consultant believes contractor is entitled to an extra, they should approve the claim. But be
careful not to make any statement that could prejudice ur insurer’s rights. If the contractor’s
claim raises the possibility of a claim against the consultant, notify ur insurer and seek legal
advice first.

Bribery of Foreign Public Officials

 Federal statute prohibits this

 in some countries it may be difficult or impossible to get things done without

making payments to foreign officials. The CFPOA currently contains an exception
for “facilitation payments,” which may be described as small payments to help
expedite the processing of routine approvals, excluding the awarding of
contracts
Module F: Professionalism - Generic
Sources: [Link]
Brian M. Samuels, Doug R. Sanders - Practical Law of Architecture, Engineering, and
Geoscience

Engineering Associations
Self-regulation
Most professions in Canada are self-regulated. Self-regulation refers to a profession’s statutory
authority to govern itself. The provinces have jurisdiction to regulate.

Professional self-regulation:
 Right to title: regulates the exclusive right for its members to use a title

 Scope of practice: regulates the right of its members to practise in a particular

area or field
 The provincial engineering regulatory bodies have also formed a national
organization known as Engineers Canada. Its goals:
o mutual recognition among the regulatory bodies

o encourage commonality of operations.

Other associations
 Voluntary membership
 Focus on technical training and transfer of knowledge
 May have their own codes of ethics, and some have copyright over specific titles.

Def'n of Engineering:
 application of engineering principles
 Safeguarding health life, property, public welfare, enviro, economic interests
 Excludes practicing natural sciences
Enforcement and Discipline
Discipline is the process of charging a member and then proceeding to a hearing to determine
guilt.
 A quasi-criminal proceeding
 potential penalties for discipline actions: reprimands, suspensions, fines,
termination of licences, educational requirements, and mentorship requirements.

Enforcement is the process of charging a non-member with either using the protected
professional title in breach of:
 the right to title or
 practising in breach of the exclusive scope of practice

Discipline
when a design professional is accused of having done something unethical, this accusation
should alert the accused to obtain legal counsel immediately and to notify his or her liability
insurer (which will provide coverage for legal proceedings in some cases)

Disciplinary Process steps Investigation (Complaints) [this is for PEO but I tnhink its similar for
others]:
 Committee Carries out:
o Complaint received by PEO about misconduct

o Gathering information

o Evaluation of the complaint

o Disciplinary Committee carries out Formal hearing Disciplinary action

Some Possible Disciplinary Actions

 Lose license, getting restrictions, suspension and limiting practice

 Fines
 Reprimand or counsel
 Publish finding with or without names (Assoc. publication)
 We may be asked to comply by court
Engineering Associations Rules
 Regulations: rules to implement or support the Act (e.g., admissions, conduct and
misconduct, discipline)
 By-laws: rules to administer the Association itself (e.g., elections, financial
matters, committees, meetings)
 Engineering Code of Ethics: states standard of conduct expected of individual
engineers

Admission to Engineering
 Education (more details to follow)
 Experience (more details to follow)
 Knowledge of professional practice and ethics
 Language
 Character
 Residence
 Age

Academic Requirements/Education
 Canadian accredited degrees (CEAB):

o Exempt technical exams

o Non-accredited degrees/technologists: Assigned technical exams

 Internationally Educated Engineers:

o Formal agreements between countries (looking to exempt)

o Confirmatory examinations (generally four technical exams)

o Directed (Specifically assigned) exams if the degree is very different from

Canadian accredited degree
 Examinations
o Technical examinations (CEQB or association’s syllabus):

 Postgraduate degree may reduce the number of examinations

o Professional Practice examination:
  All applicants must pass law and ethics exam(s) in at least one
jurisdiction. Usually, each association recognizes the other
associations’ law and ethics exam.
o Experience

 Four years experience (in Quebec, three years)

 At least one year of Canadian experience: – Internship experience
may be considered if acquired after half of study (after year 2)
 Postgraduate degree may give credit up to one year.
 Quality of experience

Licensing Requirement
 They are the same for all applicants, no matter where they come from.
 They must:
o be at least 18 years of AGE;

o be a citizen or permanent resident of Canada (for some associations

only).
o be of good character

o hold a degree from a Canadian Engineering Accreditation Board (CEAB) -

accredited program or equivalent qualifications;
o Successfully complete the Professional Practice Examination (NPPE);
and
o have at least four years of acceptable, verifiable experience in
engineering, one of which must be acquired in Canada under a
Professional Engineer’s supervision.
 Admission to the profession:
o You will be issued a license A seal (stamp)

o Can use the title [Link].

 Seal: see below

Seal
 The seal has important legal significance, since it implies that the documents
have been competently prepared and indicates clearly the person responsible for
them.
  Is used to seal the drawing (Approving), specification, report, plan etc. that was
prepared or verified by the eng, or someone onder their direct superbision*
 Any changes to the document should be sealed
 Preliminary documents should not be sealed, but marked “Preliminary” or
“Not for Construction”
 As builts, and standard shop drawing of steel construction need not be
sealed. (it is not considered to be part of P. Eng. Practice).
 Should be legible and dated Seal should be applied to copies not master
 Seals should not be used in Business card or advertising.
 The seal is required to be accompanied by signature and date.
 Seal signifies
 A thorough review of the work, and
 Full acceptance of responsibility for the work.
 Seal is actually the property of the association. Gotta give it back when you retire
or stop working as p. eng

*Professionals often approve work conducted by others, even those who are not under their
direct supervision and control. Before approving work done by others, the “professional member
shall only apply his or her stamp to the documents after thoroughly reviewing the documents
and accepting professional responsibility for” the work.
Accepting this responsibility is occasionally necessary, for example, to cope with staff turnover
when staff quit or move to other jobs.

Professional Seals and Letters of Assurance

 Improper use of ur seal is a disciplinary offence

 Professionals should understand that using a professional seal means that they
have personally prepared, supervised, or reviewed the documents

Reviewing the Work of Another Professional

As a courtesy, a professional must inform another professional before reviewing their work. For
communication purposes; not necessary to seek the person’s permission for the review.
A consultant should usually refuse to secretly review the work of another professional
o Exceptions: When public safety is involved, a review may occur without informing
the professional.
 o If a lawyer requests the review, and the review will remain confidential under
solicitor–client privilege.
o Proprietary matters, such as trade secrets, also take precedence and allow for
reviews without informing the professional.
Note that practice reviews are not secret reviews. Some Associations conduct practice reviews
to ensure that continuing competence programs are effective. Every year, a small, random
sample of members undergoes a practice review. These are confidential and occur with the full
knowledge and cooperation of the professional.
Client may ask a professional to submit the calculations that support a recommendation.
Requiring this amounts to a review of the professional’s [Link] client has an ethical right to
review these calculations and to make a copy for permanent record. If the calculations are
output from a commercial software program, it is not possible to provide the program itself, of
course, but all input and output data should be available. However, the professional should
charge for the time needed to prepare the calculations in a format understandable to the client.

Software
Before using software for calculations etc, engineer has the responsibility to check they are
using it for its intended purpose (eg. Not using a small dinky software that doesn’t understand
buoyancy to build a ship) and verify that it is doing calculations correctly. The eng. Must have
knowledge of the eng. principles involved and be able to apply them.
Almost every commercial computer program includes a disclaimer stating that the manufacturer
and supplier are not liable for any damage arising from the program’s use. Typically, the
disclaimer specifically denies responsibility for direct or indirect damages, including loss of
business profits, business interruption, personal injury, financial loss, and/or similar losses. In
effect, this limits the manufacturer’s liability to the price paid for the program.
This disclaimer shifts the responsibility to the user—a fact confirmed by the licensing
Associations.

Software tests
If a major technical project fails because of software errors, the first question you can expect a
lawyer to ask you is “What tests did you perform to ensure that the software was operating
properly?”
Types of tests
(in order to worst to best)

Dummy runs: Run a basic check on the program’s computation, using nominal entries such as
zeroes or ones, to get a known answer.
 Eg: If zero loads are applied to a structure, the stresses calculated should be zero.
 This test on its own is not sufficient
Approximate analytical checks: Imagine a simplified configuration of your computer model that
can be analyzed mathematically. Apply analytical calculations to the simpler model, find an
approximate answer, and compare it with the computer output.
 Eg: a finite-element model of a complex structure can almost always be decomposed
and approximated by simple beam and column equations. Take a most optimistic
estimate and a least optimistic estimate and apply the analytical equations to each. The
computer output should lie between these boundaries.
Independent theoretical checks: Make analytical computations using an independent theoretical
basis.
 Eg: For example, dynamic simulations use numerical integration, but the integration can
be checked by applying the laws of conservation of energy and momentum to the initial
conditions and the final answers.
Complete duplication: A full-scale duplication of the computation, using different software,
hardware, and input files, is an expensive but convincing validation. Independent employees or
consultants should conduct this test, if possible, to avoid systematic errors in the input data.
 It is always cheaper to duplicate a computer calculation at the early stages of a project
than to explain the omission to a board of inquiry after the project fails.

Standards and Codes

 Legislated codes, such as building codes, are mandatory for everyone in the relevant
industry.
 Codes required by contract are mandatory between the contracting parties. violation of a
code mandated by legislation or by contract is almost always a breach of contract.
 All other codes are recommendations only; compliance not mandatory.
o However, in the event of a failure or accident, any relevant codes can become a
minimum mandatory standard in court.
o Professional has the right to exercise independent judgment

Code compliance
If ur in full compliance with the code can u be held liable? simple answer: unlikely.
4 circumstances where such liability can be found:
1. [Link] has actual knowledge that the code requirements are inadequate
2. [Link] reasonably should have been aware that the code was inadequate.
a. [Link] has an obligation to keep up with current and future developments.
3. an industry cannot be permitted to set its own standard, and [Link] should not follow
such standards where those standards are careless.
a. eg, courts have found that adherence to an industry standard is insufficient
defence to a claim in negligence in automobile design and manufacture cases.
4. Where the design is leading edge or unique, traditional codes may not be relevant.
New approaches
If [Link] wants to use a new approach that deviates from common practice:
 fully inform the client of any potential risks associated with the method, such as the
effect it might have on use or maintenance costs or on safety factors;

 professional lets the client make an informed decision, and therefore the client takes the
risk
Safety
Normally, the design professional chooses the safety factors for a project. While the law or
accepted codes may mandate a minimum standard, the professional is the one who determines
whether the project meets, exceeds, or fails to meet the safety factor.
For example, in a disciplinary hearing following a roof collapse, the judgment panel made the
following comments:

Codes of practice set forth minimum standards to which there should be adherence. The engineer cannot
deviate from the requirements of the Code without adequate grounds to do so . . . . If the Code is in any
way ambiguous and requires interpretation, the engineer must ensure that the interpretation is based
upon sound engineering principles and is consistent with the intent of the Code.
Module G: Professionalism - PEO
ALL THIS IS PEO!!!!!!!!!!!
THE NPPE WILL HAVE 10 ONTARIO-SPECIFIC ETHICS (and professionalism?) QUESTIONS
IMPORTANT: READ REG 941 SECTIONS 72 AND 77, AND THE CODE OF ETHICS.
Sources:
 Canadian Professional Engineering and Geoscience: Practice and Ethics, 4h
edition, by Gordon C. Andrews
 [Link]

Act and Reg

 Members of the PEO are governed by an Act and a Regulation.
 The engineering profession is regulated by the Professional Engineers Act.
 5 basic elements of the Act:
o Definition of Engineering

o Admission Criteria

o Definition of Professional misconduct

o Disciplinary power of the association

o Code of ethics Regulations: are rules set up to implement or

support the Act. They concern Topics such as qualifications for
admission and professional misconduct
  Bylaws: rules set up to administer the association itself (e.g., election,
committees, ..)
 The Code of Ethics: rules of personal conduct to guide individual engineers.
 Breaching the CoE is NOT a basis for discipline under the Act. The CoE is
the 'ideal' that we should strive for, and is moral not legally binding. the
def'n of prof. misconduct is the lower standard for behaviour
 However an action can count as misconduct and also be a breach of the
CoE. That will be enforceable. In this way, most of the code is technically
enforceable.

Enforcement is for non-members. Discipline is for members.

Membership (§18.5, §5, see definition of "professional engineer"

in §1)
Section 18.5
A holder of a temporary licence, a provisional licence or a limited licence is not a member of the
Association
Section 5
Every person who holds a licence is a member of the Association subject to any term, condition
or limitation to which the licence is subject.

Types and restrictions on membership (see definitions in §1) Licence

 To be licensed by PEO, applicants must:
 be at least 18 years old; be of good character
 meet Education Standards
 Pass the NPPE
 meet engineering Experience Requirements

Temporary Provisional Lisence Limited Lisence

Lisence

For who? Issued on a If u satisfied all of PEO’s U have 8 or more years of

project and licensing requirements except specialized experience &
discipline basis for the minimum 12 months of competence in a certain field
for 12mo max engineering experience in
 Canada

Requirements Same reqs as All other PEO lisence reqs A three-year diploma in
normal licence, engineering technology
OR have wide (“Licensed Engineering
recognition in Technologist” LET) or A four-year
the field for at honours science degree.
least 10 yrs
8 years of acceptable
Membership engineering experience (6
with another relevant to the scope of services
provincial to be provided under the limited
association licence; at least 4/6 acquired in
Canada)
Liability
insurance Pass NPPE.
Collab with Good character
lisenced
member to
ensure all work
complies with
codes,
standards,
laws. Work
must be co-
signed and
sealed by
collaborator

Title Limited Engineering Licensee

(LEL)

Limitations Must collab Licence is valid for 12 months. can only offer [Link] services
with lisenced Can be renewed once for according to the services
member; ur another yr. specified in the lisence
work must be
Practise under supervision of a When ur done performing those
co-signed and
[Link] and ONLY issue a final services, have ot give the seal
sealed by
drawing or other doc if the and lisence back to PEO
collaborator
supervising engineer also signs
and seals it
Licence authorizes the holder to
practise in Ontario only.
Enforcement (§40)
 Unlicensed practice of professional engineering → offence; fines up to $25,000
(first) / $50,000 (subsequent).
 Misuse of titles (“engineer”, “[Link].”, etc.) or use of a seal without a licence or
certificate → offence; fines up to $10,000 (first) / $25,000 (subsequent).
 Obstructing an investigation → fine up to $10,000.
 Corporation or partnership involvement → directors, officers, or partners who
authorize or permit an offence are also liable; fines up to $50,000.
 Time limit: Charges must be laid within 2 years of the offence.
 Exception: Limited licence holders may use certain approved titles

7. "practice of professional engineering" (defined in §1)

 planning, designing, composing, evaluating, advising, reporting, directing or
supervising that requires the application of engineering principles and concerns
the safeguarding of life, health, property, economic interests, the public welfare or
the environment, or the managing of any such act;

Consulting Engineer
 In Ontario, the title Consulting Engineer is regulated under the Act and may not
be used w/o authorization from PEO
 Reqs: Be a [Link] and apply to PEO, and:
 Authorization must be obtained to engage in private practice.
 Experience: must have five years' experience in addition to that required
for registration; at least the last two years of the experience must be in
private practice.
 Professional Liability Insurance or notifying all clients in writing of the fact
that they are not insured (failure to do so = professional misconduct)

Compensation For Consulting Engineers

 Per Diem: Fixed daily rates. Used for assignments where the scope of work
cannot be accurately determined.
 Ex: some consulting firms will, upon request, place their personnel within
a client's firm to work side-by-side with the client's engineers.
  Pavroll Costs Times-a-Multiplier: Payroll costs, multiplied by a factor to cover
overhead and profit, are most often used for site investigations, or preliminary
design.
 multiplier is usually in the range of 2 to 3.
 Lump Sum: Consultant determines in advance a lump sum that will cover costs,
overhead, and profit.
 Fee as a Percent of Estimate : It has generally been applied to consulting
engineering services where the primary task is preparing drawings,
specifications, and
 contingent fee: Get paid only if you achieve agreed upon outcomes.

Advertising
 In general, advertising that communicates facts and data about the availability,
experience, and areas of expertise of an engineer in private practice is fair and
unobjectionable.
 In the past, "business card" form of advertising was the only acceptable
advertising method. In recent years, the restrictions have eased slightly.
 Ontario regulations permit advertising that is:
 professional and dignified, factual, without exaggeration
 does not directly or indirectly criticize another licensed engineer or the
employer of another licensed engineer.
 CANT use ur seal on advertising or even on business cards or letterhead.
 Association's decorative logo may be used on business cards and letterhead, but
only to signify membership in the Association.

Practicing outside ur discipline

 Clause [Link] and 77.1.V of the Code of Ethics states:
 It is the duty of a practitioner .... to act at all times with,
o [Link] of developments in the area of professional
engineering relevant to any services that are undertaken, and
o v. competence in the performance of any professional engineering
services that are undertaken.
 These clauses of the Code of Ethics are enforceable under Reg 941 Clause
72.2.h, which states ... “professional misconduct” means, ...h) undertaking work
 the practitioner is not competent to perform by virtue of the practitioner's training
and experience.
 Engineers may be liable for negligence if his/her practice results in someone
suffering damages. Although an engineer may be shielded financially by liability
insurance, an engineer guilty of professional misconduct is always subject to the
disciplinary action of the PEO.

Professional Seals and Letters of Assurance

 Improper use of his or her seal is a disciplinary offence
 Professionals should understand that using a professional seal means that they
 have personally prepared, supervised, or reviewed the documents

Professional Engineers Act

Chapter 32 - Regulatory Aspects and Ethics
Purpose of Legislation
 To regulate the practice of professional engineering

 To protect the public interest.

Sections §2.3 and §2.4 of the Professional Engineers Act of Ontario provide:
(3) Principal object: to regulate the practice of professional engineering and to govern its
members, holders of certificates of authorization, holders of temporary licences, holders of
provisional licences and holders of limited licences in accordance with this Act, the regulations
and the by-laws in order that the public interest may be served and protected.
(4) For the purpose of carrying out its principal object, the Association has the following
additional
objects:
 To establish, maintain and develop standards of knowledge and skill among its
members.
 To E,M,D standards of qualification and standards of practice for the practice of
professional engineering.
 To E,M,D standards of professional ethics among its members.
 To promote public awareness of the role of the Association.
 To perform such other duties and exercise such other powers as are imposed or
conferred on the Association by or under any Act.
§7 and §8
Section 7 Regulations - summary of subsections
7 (1) Subject to the approval of the Lieutenant Governor in Council and with prior review by the
Minister, the Council may make regulations such as:
 fixing the number of members to be elected to the Council, defining
constituencies, prescribing representatives;
 governing qualifications, nomination, election and terms of office of Council
members and contested elections;
 specifying acts within the practice of professional engineering that are exempt
from the Act when performed by certain classes of persons;
 prescribing that the Not-For-Profit Corporations Act applies to the Association in
certain respects.

In short: the Association has the regulatory power to define internal governance, exemptions
and other matters through regulations

 Subsection (2): Any regulation made under subsection (1) must be forwarded to
each member of the Association and made available for public inspection at the
Association’s office.

Section 8 By-laws - summary of subsections

Subsection Summary

(1) The Council of the Association of Professional Engineers of Ontario may

make by-laws concerning its administrative and internal affairs, so long
as they comply with the Act and any regulations. It then lists examples of
the kinds of matters the by-laws may cover (e.g., seal/insignia, document
execution, banking/finance, meetings, investment of funds, fees, grants,
scholarships, publications, member-groups, etc.).

(2) A by-law made under subsection (1) becomes effective when passed by
Council, unless subsection (3) applies.

(3) If a by-law so provides, it must be confirmed by a majority of the

members of the Association voting on it before it becomes effective.

(4) Once by-laws (and any amendments) are made, a copy must be sent to
the Minister, sent to each member of the Association, and be available for
 public inspection at the Association office.

Section 12 When licences or certificates required - summary of subsections

Subsection (1)
Can't practice professional engineering or presenting urself as practicing [Link] unless u hold
one of the following: a licence, a temporary licence, a provisional licence or a limited licence.
Subsection (2)
Cant provide services that fall within the practice of [Link] to the public, except under and in
accordance with a CofA.

Section 13 Corporation
 A corporation that holds a CofA may provide services that are within the practice
of professional engineering.

Section 15 – Certificates of authorization:

 The Registrar will issue the Certificate when requirements are met.
 “Standard” vs “general” forms of Certificate:
 Standard: the default generic CofA
 General: where the primary function of the applicant is to provide to the
public [Link] services AND the applicant requests a general CofA
 Depending on the nature of the entity’s work, It also states conditions under
which the certificate ceases to be valid (for example if there is no supervising
licence-holder), and the required notices to the Registrar when supervision
changes.
 CofA can be revoked

Section 16 – Issuance on direction of Council:

 Registrar shall issue a licence or a certificate of authorization upon a direction of
the Council made in accordance with a recommendation by the Joint Practice
Board.

Section 17 – Supervision under certificates of authorization:

 Every CofA holder shall provide services that are within the practice of
professional engineering only under the personal supervision and direction of a
holder of a licence, temporary licence or limited licence
Codes of Ethics (CoE)
 CoEs include statements of general principles & instructions for specific conduct
that emphasize the duties
 General principles: (in order of importance)
o Duty to Society (MOST IMPORTANT - DUTY TO THE PUBLIC/PUBLIC
SAFETY IS PARAMOUNT)
 protect the safety, health, and welfare of society
 the professions receive the privilege of self-regulation
o Duty to Employers

 act fairly and loyally to the employer

 keep employer’s business confidential
 disclose any conflict of interest
o Duty to Clients

 Same as the above

o Duty to Colleagues

 act with courtesy and good will

o Duty to Employees and Subordinates

 recognize the rights of others

o Duty to the Profession

 maintain the dignity and prestige of the profession

 avoid scandalous, dishonorable, or disgraceful conduct
o Duty to Oneself

 duties to others are balanced by the ur own rights

 insist on adequate payment, a satisfactory work environment
 strive for excellence and maintain competence in the rapidly
changing technical world

72. (1) In this section, "harassment" means engaging in a course of vexatious comment or
conduct that is known or ought reasonably to be known as unwelcome and that might
reasonably be regarded as interfering in a professional engineering relationship; "negligence"
means an act or an omission in the carrying out of the work of a practitioner that constitutes a
failure to maintain the standards that a reasonable and prudent practitioner would maintain in
the circumstances. R.R.O. 1990, Reg. 941, s. 72 (1); O. Reg. 657/00, s. 1 (1)

Discipline
when a design professional is accused of having done something unethical, this accusation
should alert the accused to obtain legal counsel immediately and to notify his or her liability
insurer (which will provide coverage for legal proceedings in some cases)

Stuff from the Act

Qualifications for licence in Ontario
14.1
(a) [repealed]
(b) >= eighteen y/o;
(c) academic reqs (or exempt)
(d) experience;
(d.1) has satisfied any other reqs
(e) good character.

The Committees within the PEO and their role (§10)

10.1
a) Executive Committee;
(b) Academic Requirements Committee;
(c) Experience Requirements Committee;
(d) Registration Committee;
(e) Complaints Committee;
(f) Discipline Committee;
(g) Fees Mediation Committee,
And can establish more.
Roles in the Association
Executive Committee (§11)
Has the authority to exercise any power or perform any duty of the Council other than to make,
amend or revoke a regulation or a by-law
Academic Requirements Committee (§14.3a) Experience Requirements Committee (§14.3b)
Registration Committee (§19.3, §19.7) Complaints Committee (§24)

Registrar
Section 14.3 a) - Issuance of licence - Referral to Committee
The Registrar may refer the lisence application to the:
 Academic Requirements Committee to determine if the applicant has met the
academic requirements,
 Experience Requirements Committee to determine if the applicant has met the
experience requirements; or
 To first a) then b)

Section 19 - Notice of proposal to not issue or to revoke, suspend

19 (1) If the Registrar proposes any of the following, the Registrar shall serve notice of the
proposal, together with written reasons, on the applicant:
1. A refusal to issue, or a suspension or revocation of, a licence under subsection 14 (2).
2. A " " ", a certificate of authorization under subsection 15 (8).
3. A " " ", a temporary licence, provisional licence or limited licence under subsection 18 (2).
20

19.3
The applicant is entitled to a hearing by the Registration Committee if the applicant gives written
request within thirty days after the notice is served to them

19.7
After a hearing, the Registration Committee can issue one of the following orders:
Approval
Refusal
Exemption
Issue with Conditions
Complaints Committee
Section 24 - Duties of Complaints Committee
Complaints Committee is responsible for investigating complaints about the conduct or actions
of:
 Members of the Association.
 Holders of a certificate of authorization, temporary licence, provisional licence, or
limited licence.
Before taking action, the Committee must:
 Receive a written complaint
 Notify the individual whose conduct is being investigated.
 Allow the individual at least two weeks to submit written explanations or
representations.
 Examine all relevant records and documents related to the complaint.

Possible Actions:
After the investigation, the Committee may:
 Dismiss the complaint if it finds no basis for further action.
 Take no further action if the matter is trivial or vexatious.
 Refer the matter to the Discipline Committee if it involves serious allegations of
professional misconduct.
 Take other appropriate actions as deemed necessary.

Discipline Committee (§28)

Duties and powers of Discipline Committee
(a) When told to, hear and determine allegations of professional misconduct or incompetence
against a member of the Association or lisence/CofA holder
(b) hear and determine matters referred to it
(c) perform such other duties as are assigned to it by the Council

 Can find u guilty of Professional Misconduct and/or Incompetence.

  Powers:
 Revocation of the licence/CofA
 Suspension
 Imposition of terms, conditions, or limitations
 Reprimand — a formal written warning or public censure.
 Payment of costs associated with the hearing, including investigation,
tribunal
 Can hear applications for reinstatement

Fees Mediation Committee (§32)

Member of the Complaints Committee or the Discipline Committee cant join the Fees Mediation
Committee.

Duties:
 mediate any written complaint by a client of a member of the Association or
licence holder regarding a fee charged for professional engineering services
provided to the client;
 Other duties the Council gives it

Arbitration by Fees Mediation Committee

With consent, may arbitrate a dispute in respect of a fee between a client and a member of the
Association or a CofA/licence holder. The decision of the Fees Mediation Committee is final and
binding on all parties to the dispute.

Enforcement
A decision by the FMC may be filed with the Superior Court of Justice and when filed the
decision may be enforced in the same manner as a judgment of the court
Module H - Other Stuff
PRIMARY SOURCE: Practical Law of Architecture, Engineering, and Geoscience textbook
Don’t think that this is not important just because it’s at the end

Chapter 17 - Bonds
Bonds
Bond: agreement whereby the "surety" guarantees that the "principal" will perform its obligations
to the "obligee".
 The purpose of a bond is to provide protection to the obligee from risks.
o If the principal fails to perform, the obligee can look to the surety instead
of just the contractor, who may not have the money to satisfy a court
judgment.
 Surety: bonding company
 Principal: party whose performance of the contractual obligation is guaranteed
by the surety. usually a contractor or subcontractor
 Obligee: the party for whose benefit the bond is provided, usu the owner

 There are two separate contracts:

o Between the principal and the obligee → primary obligations

o Between the surety and the principal → secondary obligations; depend on

the existence of primary obligations
  Governed by the rules of contract law, and are similar in some ways to contracts
of insurance, but are not insurance. Principal pays a premium.
o If the bonding company is required to incur expense in performing its
obligations, it will recover expenses from the principal.
 An owner may require a construction contractor to provide a bond to provide
certainty that the contract will be performed
 Improper conduct by the obligee may relieve the surety from its obligation to
guarantee performance

Subrogation
 Subrogation is the assumption by a third party (such as a second creditor or an
insurance company) of another party's legal right to collect debts or damages
 If the surety is required to pay out under the bond, it will have a right of
subrogation against the principal
 This is the key distinction from insurance contracts, where subrogation
cannot be obtained against an insured
 Subrogation is only useful if the principal, or its shareholders if guarantees were
given, are solvent

Regarding Corporations
 Often the principal (contractor) is a corporation.

 Sureties often require shareholders or principal officers of the principal to

indemnify the surety against any expense incurred by the surety. The surety may
look to both the corporation and to the individuals who provide the indemnities to
recover payments if any, as it fulfils its obligations to the obligee.

Types of Bonds
Bid Bond
 Used in tendering
 If the principal's tender or bid is accepted, the principal has to enter into a
contract with the obligee (owner). If the principal fails to, they must pay to the
owner the difference in money between the (amount of the bid) and (amount the
owner must pay another party for the work), up to the face amount of the bid
bond.
 If principal fails to pay, the surety pays. However, the surety will then charge the
total costs involved back to the principal.
Performance Bond
 Indemnifies the obligee if the principal doesn't perform their contractual
obligations.
 The indemnity is limited to the amount specified in the PB. PBs can be for the
whole contract price or for a limited amount. It's usually 50% of the contract
value.
 The amount relates to the extra cost above the original contract price that may be
required to complete the contract, if the surety has to.
 If contractor defaults another contractor has to be found to finish the work, the
owner will still be obligated to pay an amount equal to the balance of the
original contract price. Look at the textbook question 1 for an example of the
math.
 The surety's obligation to provide funds for construction applies to amounts
required over and above the original contract price.

Principal in default
Once the surety has been put on notice that its principal is in default, it conducts a thorough
investigation before choosing a course of action. It generally has six options:
 Require the principal to perform its obligations.
 Complete the contract itself in accordance with its terms and conditions.
 Solicit bids for completion of the work, & pay the obligee the difference between
(the accepted bid) and (the remainder owing to the principal under the original
contract), up to the face value of the bond.
 Pay the obligee the amount of the bond.
 Assert a defence and refuse to do anything.
 If there is a genuine dispute between the obligee and the principal, it can take a
“wait and see” approach to determine whether the principal was in default.
o Downside of waiting: if it turns out that the principal was in default, the
surety may be liable for more than the face value cus its delay
aggravated damages suffered by the owner. Courts are divided but
typically they arent liable.

Notes:
 sureties don’t wanna do the work itself because then their obligations will have
no financial limit.
  The option of soliciting bids is limited to the face value of the bond, whereas
completing the work puts the surety in the same position as the contractor,
complete with warranty obligations.
 The surety may escape its obligation to pay on the basis that:
 The obligee has not performed all of its obligations
 The obligee failed to give the surety adequate notice of the claim against
the principal
 The risk the surety is exposed to changes e.g. by the principal and
obligee agreeing to increase the scope of work
 The obligee overpaying the principal for work done; this also increases
the risk the surety is exposed to

 If a surety pays money as a volunteer, without a legal obligation to pay, it would

be unable to recover this amount from its indemnitors.

Labour and Material-Payment Bond

 Guarantees that all claimants will be paid for labour and materials provided to the
principal for the project.
 Protects owners and general contractors from liens by unpaid subcontractors, suppliers,
and those working below them in the contractual chain.

Payment Bond
 Guarantee of the performance of a payment obligation. A party to a contract requests a
payment bond whenever there is a concern that the other party may default on a
payment obligation.
o Where the financial strength of the owner is in question, the contractor ask owner
to provide a payment bond
o An owner may require one from the contractor

o Contractor may require one from each of its major subs.

 One useful form of payment bond for the construction industry is the lien bond, a
payment bond used as security to facilitate the discharge of a lien that has been filed
against the land on which a project was constructed.

Do the chapter questions on pg 208.

Chapter 19 Delay and Impact Claims
 Delay causes extended time to complete all or part of a project.
 Compensable delay: one party is contractually entitled to recover
damages from the delaying party.
 excusable delay: not any partys fault. may or may not be compensable,
but it entitles the parties to extend the time for completion.
 contractor-caused delay: caused by the contractor or by a party for whose
actions the contractor is responsible; it is almost always non-excusable
and non-compensable
 Concurrent delays: two or more independent delays coincide
o Hard to assign responsibility for the delay so neither party can
recover damages from the other for the period of concurrency
 In force majeure provision of the CCDC 2 contract, contractor is entitled
to an extension of time for excusable delays, including causes beyond the
contractor’s control
 Contractors have to give notice for delays to get an extension, but doesn’t
affect compensation
 CCDC 2 contract doesn’t state that a delay must affect a critical path
activity to qualify for an extension, but ur specific contract may.
 Different no-damages-for-delay clauses (self-explanatory) have different
degrees of enforceability. Depends on strict wording. But owner cant
purposely cause delyas

 impact or disruption detrimentally affects a project but which may or may not
extend the completion time of the project.
 Float is the time contingency in a given activity
 acceleration is an increase in labour or equipment that shortens the completion
time or mitigates the effects of an impact or a delay.
 Parties can deal with delays in one of two ways: extend the time for
completion or accelerate the work to make up for the delay.
 Acceleration claim: claim for the cost of making up lost time.
o Acceleration usually costs less than delay.

o in some cases those costs can be greater than or equal to delay

costs since acceleration is generally achieved through overtime
and additional labour, which can result in a decrease in efficiency.
 o Courts treat acceleration claims in much the same way as they
treat delay claims, including allocation of responsibility or fault.
 Directed acceleration claims: client/owner tells contractor to take all steps
necessary to meet the contractual completion date
constructive acceleration: contractor is forced to accelerate the work without any
acknowledgement by the owner that the contractor's being asked to accelerate.
o may entitle the contractor to additional compensation

 impact claim: claim for costs created by delays, interference, and changes in the
sequence of the work. Ex: owner that delays a summer projec into winter
weather may be faced with a claim for increased winter construction costs.
 claimant responsible to disclose impact costs at the time of the delay or change.
 Doyle Construction: contractor claimed for impact costs resulting from
multiple change orders. But those change orders had not identified any
impact costs. The owner defended the claim on the basis that the change
orders were all inclusive and that the contractor had not given timely
notice of his impact claims. The Court agreed since the owner could have
elected not to proceed with some of the changes had it been notified in
advance of the impact costs.

Chapter 23 Environmental Law & Ethics ( Ethics part is included

from Ethics section)
 Enviro law is mix of common law and statutory regulation
 Trespass, nuisance, negligence, misrepresentation, and strict liability are
commonly used in environmental claims
 ESAs and Enviro Audits are done according to guidelines set by the Canadian
Standards Association

ESAs
 Contamination is usually discovered and remediated through a three stage
environmental site assessment (ESA)
  Consultants owe a duty of confidentiality to their clients, but it may be trumped by
a legislative requirement to disclose environmental hazards to regulatory
authorities
 If an environmental report is requested for a client by a lawyer, the report
may be privileged even with respect to the regulatory authorities
 3 stages of ESA:
1. Information gathering
2. Site investigation and assessment of contamination
3. Detailed description of contamination and formulation of remediation
options
Surrounding properties are often included in ESAs because pollution often migrates.

Enviro audits
 Assess corporate environmental liability
 Environmental legislation contains proactive measures to prevent future
contamination and aims to balance the need for environmental protection with
the desire for economic development
 Asses environmental contamination, compliance, and risks
 May be statutorily required, but may also be done to
 provide defences against environmental claims or prosecutions
 protect the health and welfare of employees
 reduce remediation expenses
 ensure the marketability of property

Remedies for Private Landowners

 Current landowners may be liable to remediate contamination that occurred
before they acquired the property
 Advisable to have an ESA done before purchasing property
 Vendors obligated to disclose latent defects, including hidden contamination
 The likelihood of success for claims against previous owners and realtors
depends on what knowledge those parties had of the contamination
  Property owners are liable for contamination that migrates from their property on
to neighboring property
 Migrating contaminants may give rise to claims in trespass, nuisance,
negligence, and strict liability e.g. Rylands v. Fletcher
 Property owners may also be able to make claims under environmental statutes

Government Regulation
 Governments seek to:
 Have private parties bear the cost of environmental cleanup
 Protect the environment from future contamination
 achieved through a complicated web of statutes and regulations
 Where provincial and federal legislation conflict, federal prevails
 The provincial and federal governments regulate aspects of the environment
 The following elements are common to most environmental legislation
 Regulation of harmful conduct
 Administrative systems to prevent, and clean up, pollution
 Mandatory reporting requirements
 Requirements to undergo environmental assessments
 Establishment of offences

Environmental Offences
 Fed and provincial offences cover a variety of behaviour including discharging
contaminants, failing to report, failing to keep proper records, failing to assist in
investigations
 Both corporations and their employees may be liable to prosecution, and
imprisonment is possible for serious offences
 Most offences are strict liability: the only defence is for the defendant to show
that it was duly diligent

Environmental Cleanup
 Polluter pays but other parties may be liable if the polluter is unable to pay
  Environmental regulations often become stricter over time; cleaning up
contamination to comply with the minimum standards of today may not be good
enough for tomorrow

The Environmental Assessment (EA) Process

 EA is assessment of the environmental impact the project will have
 may be required for new projects, or for modifications to existing projects
 Depending on the nature of the project and the sensitivity of the location, one of
four levels of EA will be appropriate:
 screening
 comprehensive study
 mediation
 panel review

The Duty to Society

 Requires reasonable care, prudence, and scientific knowledge:
 Knowledge of environmental law
o seek advice before taking any action that might contravene an
environmental law, regulation, or bylaw
o compliance with environmental law

 Adequate technical knowledge

o before releasing any substance into the environment, must have
knowledge of effects of the release, even when substances are
not toxic
 Eng must refuse to carry out any activity that is a breach of the Association’s
Code of Ethics or the environmental guidelines
 Employer cannot direct professional to take an action that would result in loss of
licence
 Conscience and refusing to follow employer’s directive may result in disciplinary
action or dismissal
 Must carefully consider possibility of dismissal, the consequences of
unemployment, and the remedies for wrongful dismissal
Canadian Environmental Law
 Federal laws:
 Canadian Environmental Protection Act: main federal law regulating the
environment
 Fisheries Act: protects the environment, and forbids activities that might
degrade any fish habitat
 Canadian Environmental Assessment Act: to encourage sustainable
development

Environmental Guidelines for Corporations: Ceres

 The Ceres Principles – 10 environmental principles for corporations, developed
by the Coalition for Environmentally Responsible Economies (Ceres), an
American coalition of institutions
 protection of the biosphere;
 sustainable use of natural resources;
 reduction and disposal of wastes;
 energy conservation;
 environmental risk reduction;
 safe products and services;
 environmental restoration;
 informing the public;
 management commitment to environmental issues,
 regular audits and reports

Environmental Guidelines for Corporations: Registration under ISO 14001

 Registration under ISO 14000 series of Environmental Management System
Standards • Registration requires: – Commitment from senior management –
Review of all applicable environmental laws – Audit of environmental impact of
corporation’s operations – Development of environmental policies –
Establishment of measurement techniques and methods for recording
measurements – Preparation of a procedures manual to define who does what –
 Training of employees – Full communication within the corporation – Regular
audits to ensure that the system is working and achieving its goals

Chapter 27 Internet Law

Jurisdiction
 When parties to an internet contract are in different jurisdictions:
 In Ontario, the contract is formed where the acceptance is received by the
offeror
 The Supreme Court of Canada uses the "real and substantial connection"
test which is complicated

 Defamation on the internet is treated like defamation on tv or radio

 Online contracting parties should verify the identity, capacity, and authority of
those they contract with

Chapter 12 Ethics in Professional Employment

Over-Ruling Technical Recommendations
 When an employer or client overrules advice of a professional:

1. Explain to the employer or client in writing the consequences of ignoring

your advice
2. Get response in writing to ensure that the advice and the consequences
have been understood
3. Employer or client now has full responsibility for the decision and any
consequences. You have satisfied your responsibilities, unless the
decision involves illegal or unethical activities- then you must escalate to
authorities

Illegal Activities
 U may be asked to engage in an activity that is contrary to the law

 Often occurs because of pressure by management to generate profits.

 the engineer must advise employer that action is illegal and must not break the
law
 Employers do not have the authority to direct an employee to break the law
Activities Contrary to the Code of Ethics
 An engineer may be asked to perform an action is not illegal but is a breach of
the Code of Ethics
o U should decline to act on the employer’s request

o Employer cannot direct professional engineer to violate Code of Ethics

o Code of Ethics has legal significance under the Professional

Engineering Act

Activities Contrary to the Conscience of the Professional

 A professional may be asked to perform an activity that contravenes his or her
conscience
 Marginally ethical industries:
o breweries, wineries, and tobacco processors

o casinos, slot machines, lotteries, gambling

o manufacturing of landmines, weapons, ammunition or explosives

o industries that pollute or create dangerous by-products

o Everyone must consults their conscience to decide if they can justify

working for it
 Refusing to follow employer’s directive may have unfair consequences such as
disciplinary action or dismissal

Professional Employee Guidelines

 The Canadian Society of Professional Engineers (CSPE) and NSPE have
guidelines to establish a professional workplace based on “ethical practices, co-
operation, mutual respect, and fair treatment”
 Guidelines have 60 clauses divided into subsections:
 Recruitment
 Employment
 Professional Development
 Termination

Labor Unions
 Professionals who are also company managers arent allowed to join unions
  Forming a union involves confrontation, generates bureaucracy and takes time
and effort
 The right to form a union is a protected right under section 2(d) of the Charter of
Rights and Freedoms (freedom of association)

Labour laws
 Provincial legislation
 independent contractor usually determines the means and methods used to
achieve results.
 employee does not usually determine the means and methods
 Although a supervisor is an employee in the usual sense of the word, his
or her duty to the employer is more likely to come into conflict with the
union’s interests. Therefore some labour relations statutes exclude
supervisors from the definition of employee.
 In Ontario:
 Subject to section 97, 7, for the purposes of this Act, no person shall be
deemed to be an employee,
o (a) who is a member of the architectural, dental, land surveying,
legal or medical profession entitled to practise in Ontario and
employed in a professional capacity; or
o (b) who, in the opinion of the Board, exercises managerial
functions or is employed in a confidential capacity in matters
relating to labour relations.
 Layoff: temporary suspension of employment. Most collective agreements
contain a clause that allows the employer to increase or decrease the size of the
workforce depending on business needs
 =/= termination, which is a permanent end of the employment
relationship.
 Typically, employers must lay off employees in order of seniority, so that
workers with the most years of employment with the employer are the last
to be laid off. When employers decide to increase the size of their
workforce they must hire back the employees who have been laid off in
order of seniority
 the concept of layoff has no place in a common law employment
relationship. In the absence of a union agreement, the common law
allows employers to terminate the employment of any employee if there is
just cause or, in the absence of just cause, if they provide reasonable
notice of termination. The right to terminate for just cause still exists in
 most collective agreements, but the right to terminate without just cause
does not.
 More about termination in Just cause for termination.

 successor employer is one who buys a business or a substantial part of a business.

 A common employer is one who carries on business at the same time as another
business, with common direction or control over both businesses

Employment Law
 Implied terms
 Restrictive covenants
 Employment standards legislation
 Termination
 Independent contractor vs. employee

Implied Terms in employment contract

 Contract comprises mostly implied terms. Salary and length of vacation are usually
express terms, while other terms, such as length of notice for termination, are often
implied.
 Certain obligations are implied into every employment contract unless
there are express terms to the contrary.
 Eg: the obligation to mitigate where a breach has occurred. The most
frequent application: where the employer has improperly terminated the
employment relationship.
 the employee’s obligation of fidelity (loyalty)
 An employee cant quit their job and then use confidential information for any reason,
including competing against their former employer.

 the employee’s duty of competence

 the employer’s duty to give adequate notice of termination or to pay severance in an

amount equal to the salary and benefits that would accrue during the notice period
Just cause for termination
1. If a breach of the employment contract by the employee is serious enough to destroy the trust
that must exist between employer and employee
2. Dishonesty and theft
3. Minor breaches, such as isolated incidents of tardiness or absence, are not just cause unless
the employer gives a warning each time this occurs, and enough warnings are given, eventually
the cumulative effect will be considered just cause.
4. In some circumstances, gross incompetence or insubordination may constitute just cause.
5. Isolated incidents of intoxication will not usually justify dismissal, unless there have been a
sufficient number of warnings.
6. Lack of business or a drop in the employer’s business is not just cause.

Whistleblowing
 Employee who finds evidence of illegal or criminal activities in workplace has a
duty to remedy it
 The proper action depends on the case:
 Report the facts to employer (or supervisor) for action (quick reporting is
important)
 Employer (or supervisor) may need to obtain authority from a senior
manager or owner, who is ultimately responsible for the organization
 Further action is urgent when illegal activity is a public hazard
 If employer ignores a hazardous problem it creates a dilemma: your duty to the
employer VS your duty to the public welfare
 Three possible courses of action (in order):
1. Correct the problem - usually most effective, especially if its minor
or employer is receptive
2. Blow the whistle - inform external regulatory agencies. unpleasant
and unfriendly act
a. General rules:
i. Is the situation dangerous to human life?
1. Need aggressive approach
2. serious cases may also be offences under
the Criminal Code
 ii. Is problem caused by the situation or by the
individual?
iii. Direct INFORMAL personal conversation with the
closest person involved (presumably a colleague or
your boss), proposing a solution
iv. consult Association for further guidance
3. Resign in protest - may be necessary in serious cases, where
staying with the company might imply collusion

Common Conflicts of Interest

 Accepting secret commissions

 Misusing the employer’s facilities

 Secret employment or “moonlighting” without permission of the primary employer
 Self-serving decisions
 Influence peddling
 Abusing confidential information
 Arranging future employment in return for a favor which can be effected by your
current position

Subcategories of Conflict of Interest

 Clear (or Actual) Conflict

 Potential (or Latent) Conflict – May potentially become a CoI

 Perceived Conflict – might look like a CoI to others
Government Acts Regulating Products
 Sale of Goods Act

 Every province and territory has certain conditions and warranties to

protect general public
 Consumer Protection Act
 Every province has one. imposes further provisions on consumer sales
 Hazardous Products Act
 Federal standards of safety for variety of consumer products (e.g., hockey
helmets)
 Motor Vehicle Safety Act
  for automobile manufacturers

Contract Conditions and Warranties

 Contract clauses are divided into conditions and warranties

 Conditions – key clauses that must be satisfied, or contract may be

terminated
 Warranties – clauses that permit consumer to demand repairs,
replacement, or damages
o warranty clause does not permit a contract to be terminated

Safety Stuff

Hazard Reduction
 Hazard analysis should be conducted for every design:

 Identify
 Eliminate
 Shield
 Warn, Remedy, Recall
 Failure analysis –
 failure modes and effects analysis (FMEA) - process of reviewing as
many components, assemblies, and subsystems as possible to identify
potential failure modes
 fault tree analysis (FTA) - top-down approach, graphical tool used to
explore the causes of system-level failures.

o
Professional Service Contracts
 Standard contract forms are available from provincial Associations and
consultant organizations
 ACEC (Association of Canadian Engineering Companies) recommends Quality-
Based Selection (QBS) process
 separates evaluation of consultant’s qualifications from fee negotiation
 client negotiates fee after selecting consultant

Quality Based Selection (QBS)

 QBS process:

 Identify firms with relevant qualifications

 Request proposals
 Select best-qualified through interviews, site visits, client references, etc
 Negotiate fee and execute an agreement
 Notify unsuccessful consultants

QBS Criteria and Evaluation

 Sum of marks gives a relative rating:

 Experience and qualifications of project team

 Project manager/engineer and senior designers (15–25)
 Technical support staff (5–15)
 Sub-Consultants (0–15)
 Management Qualifications
 Experience on similar projects (10–20)
 Availability of key staff (5–15)
 Stability and reputation of the firm (0–10)
 Multidisciplinary/Specialty capabilities (0–10)
 Quality assurance systems (0–10)
 Local office (0–10)
 Insurance coverage (0–5)
  Project Implementation
 Approach and methodology (10–25)
 Scheduling of key activities and resources (5– 15)
 Project quality assurance program (0–10)

Benefits of QBS
 Engineer and client work together to define and deliver project

 Selection focuses on value to client

 Life-cycle costs of the asset can be optimized
 With a detailed understanding and agreement on the project scope, engineer is
in a much better position to determine resource requirements, cost estimates and
fees

Professionalism
Professional Development Activities
 Professional Practice (activity as professional)

 Formal Activity (courses, seminars)

 Informal or Self-Directed Activity (attending conferences, seminars, meetings of
technical societies)
 Participation (mentoring, committees, community service, etc.)
 Presentations (conferences, meetings, courses, etc.)
 Contributions to knowledge (writing books, papers, codes, standards, thesis,
review papers, etc.)

The Role of Technical Societies

 Encourage research, collect and classify new information, and disseminate it to
members
 important publishers of new research
 publish journals, conference proceedings, standards, and codes
 equivalent to the learned societies in the arts and humanities
 Role is different than role of Associations that license engineers