Make Sure the Contract is Signed

Form agreements done well reduce transaction costs and risks of future misunderstanding. Not surprisingly, they have to be signed by the parties to constitute a binding contract. In the field of architecture, it is common to use forms developed by the American Institute of Architects, sometimes by themselves, sometimes in conjunction with another contract. A per curiam January 8th opinion by the Sixth Circuit. Grusenmeyer & Associates, Inc. v. Davison, Smith & Certo Architects, 2007 WL 62620, illustrates the pitfalls in not dotting your "i"s and crossing your "t"s.

The fact pattern was typical: an RFP was put out for a master plan. One architectural firm won. Then, a different RFP was put out for the building of one structure and this time a second firm won. The entity putting out the bids gave the second architects the first architect’s master plan, and the first architect sued for infringement. The district court granted summary judgment to defendant’s finding that even though the first firm was the copyright owner, it had granted permission for the use. This turned of course on the specific language of the contract, and to get around that plaintiff relied on an AIA form which was not, however, attached to the contract. The court of appeals’ discussion is instructive:

Where a party has used copyrighted material with permission, a finding of infringement is precluded.... The defendants argued, and the district court agreed, that notwithstanding any otherwise valid copyright protection, the contract between Grusenmeyer and Magnificat permitted DSC Architects to use the drawings. ...
Grusenmeyer argues on appeal that in adopting the defendants' theory of the contract's coverage, the district court overlooked the provision that Grusenmeyer's services would be rendered in accordance with American Institute of Architect's "Abbreviated Form of Agreement Between Owner and Architect." Although Jeffrey Grusenmeyer conceded that the form agreement was not appended to the actual contract or otherwise supplied to Magnificat, he relied on Section 6.1 of AIA's form agreement to establish his exclusive retention of rights in the disputed drawings. ...
The district court rejected the plaintiff's interpretation of the [AIA] provision....
We agree with this interpretation and with the district court's substantive ruling on the effect of the explicit contractual provisions... As provided in the contract, the program for capital improvements included the building of a "Fine Arts/Band Practice/Auditorium type space[ ]." It is undisputed that Plaintiff provided Magnificat with existing conditions drawings, and that those drawings were used in connection with the development of the Performing Arts Center at Magnificat. As such, the existing conditions drawings fall within the scope of Plaintiff's responsibilities under the contract, for which Magnificat paid Plaintiff approximately $15,000.
It is consistent with logic that drawings of existing conditions would be necessary for the implementation of the capital improvements program and would therefore be included within Plaintiff's responsibilities under the contract. Equally logical is the fact that such drawings may be used in the implementation, in return for the compensation that Magnificat paid to Plaintiff.
We agree with the district court's conclusion that, contrary to the plaintiff's assertions, the contract permits the use, as described, of the materials developed under it. Otherwise, the contract provision stating that Grusenmeyer would "[p]rovide ··· plans, renderings, and perspectives suitable for use and future reference during master plan implementation" would be meaningless.