LBMI/NLBMDA Contracts Program: Minimizing Your Risks
The LBMI/NLBMDA contracts program manual and CD, Risk Management Best Practices: Six Principles to Minimize Legal Liability, is designed to help dealers address the growing problem of customers and primarily builders unfairly shifting risk through contract language that requires dealers to assume the majority of the liability regardless of actual fault.
This program provides dealers with easy-to-understand information to help reduce risk by identifying common language, clauses, and risk transfer practices to be aware of when writing or signing contracts with customers. The principles are designed to educate you on the risks you face and the many steps you can take to contain those risks. They include important information on:
- basic legal concepts that will help you better design your business operations and train your employees;
- who your customers are and how to manage them;
- the different phases of a construction project and how to situate yourself during each phase to minimize risk of liability;
- provisions you can include in your contracts and standard purchase order forms that will shift liability to other parties involved in various projects;
- different forms of insurance you can purchase to protect yourself;
- ways to negotiate and shift liability that minimize the risks you assume;
- steps you can take in all aspects of your business to protect and enforce the legal rights you have.
For more on the Risk Management Best Practices contracts program or to order a copy, visit www.dealer.org.
ISFA Reintroduced in Congress
This month, dealers from around the country will come to Washington for NLBMDA’s 2007 Legislative Conference to make the case for our top legislative priority, the Innocent Sellers Fairness Act (ISFA; H.R. 989). ISFA was reintroduced in February in the 110th Congress by Reps. Dan Boren (D-Okla.) and Steve Chabot (R-Ohio). This important legislation provides that 1) sellers do not take on liability for a product merely by selling that product and 2) if sellers are negligent with respect to certain, specific non-sale activities, they will be responsible for the harm their negligence causes. n Simply put, sellers/dealers should only be held responsible in proportion to their wrongdoing and should be freed from liability when they have done nothing wrong. This common-sense approach won’t prohibit consumers from seeking legal recourse when warranted, but it will ensure that truly innocent sellers do not bear the cost of fighting frivolous claims against them. n The Innocent Sellers Fairness Act was born out of necessity. Unfortunately, unfounded and unfair lawsuits are increasingly having a negative effect on the ability of dealers to run their businesses and contribute to their communities. In fact, a 2005 survey of NLBMDA members found that more than 1 in 4 have been the subject of product liability lawsuits in the last five years. The high costs of defending such lawsuits–which can run as high as $100,000, according to Small Business Administration estimates–typically force dealers to settle, regardless of the merit of the case.
- Clearly, this issue affects all of us. NLBMDA needs your help in educating other dealers and your legislators about ISFA.
There are four main ways that you can help. First, contact your legislators and ask them to co-sponsor H.R. 989. You can do this through www.buildthevote.org, NLBMDA’s advocacy Web site. Second, consider making a donation to NLBMDA’s ISFA Fund, which is used to support government affairs activities (see below). Corporate and personal donations are accepted. Third, join the Lumber Dealers Political Action Committee (LuDPAC) and help elect legislators who support our industry’s priorities. n And finally, spread the word. The more dealers who know about ISFA, the bigger impact we can make in Washington.
–For more information on how you can help promote ISFA or make a donation to NLBMDA’s ISFA Fund, please contact Sarah Owen at sarah@dealer.org or 800.634.8645. Checks also may be mailed to “NLBMDA ISFA Fund,” 900 2nd Street NE, Suite 305, Washington, DC 20002
The National Lumber and Building Material Dealers Association represents more than 8,000 lumber and building material companies with more than 400,000 employees, 20 state and regional associations, and the industry’s leading manufacturers and service providers. NLBMDA is the voice of America’s building suppliers. www.dealer.org.
