NZIS GOOD BUSINESS PRACTICE

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Author

LPMS Admin

Published On

28/06/2017

The LPMS Claims Committee has recently experienced a disturbing incidence of déjà vu.  It appears that some members consider that small jobs do not require any formal Conditions of Engagement.

NZIS has a very clear policy on good business practice, which shall include proper constitution of every engagement. 

Rule 21.3.1 states

Conditions of Engagement: Every engagement shall be properly constituted and acknowledged, preferably in writing, prior to commencement.  Every acknowledgement shall contain the details of the instructions received, the date of the commencement, the basis for the payment of fees, and such other matters as may be appropriate to the circumstances.  Any variation to the conditions as may be agreed to from time to time during the term of the engagement should be confirmed in writing.”

Discussion

We note that the rule states that the engagement should be preferably in writing.  One might argue that those words do not indicate compulsion.  Your Executive takes the view that how else can you acknowledge the instructions received, specify the date of commencement and the basis of payment of fees unless it is in writing.  Certainly, variations are required to be confirmed in writing and thus we interpret the rule to mean that every engagement should be in writing.  How else are you going to set out the terms and conditions of the engagement using the standard terms and conditions that are provided by NZIS without sending those terms and conditions in written form?

Failure to comply with the Institute rules may compromise your Professional Indemnity Insurance for surveyors.