Welcome to Bedugul - Bali

Bedugul is a cool mountain area in Bali. Bedugul located about two hours drive from the Ngurah Rai International Airport. Bedugul has many beautiful tourism objects and facilities; even you will see beautiful sights along your journey to this location. The Eka Karya Botanical Garden (the only botanical garden in Bali) located inBedugul area, among Lake Beratan, Lake Tamblingan, Lake Buyan and natural forest in the west part. At the edge of Lake Beratan you will see the Ulun Danu Temple which is beautifully and harmoniously featured with the surrounding nature. Some water sports activities are provided in this lake e.g. fishing, skiing, diving and parasailing. Yes, clear air and environment with its beautiful surrounding make Bedugul area as one of the best and favorite holiday sites in Bali. Go and check it by yourself.

Have a nice travel

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Web 2.0? Or Is It More Like Web 16.0?

It has become difficult to keep up with the meanings of all the new phrases and terms generated by modern technology. One of the most commonly used phrases on the world wide web (www) today is "Web 2.0." It seems like every web solutions company is using this phrase to sell its stuff. So to the average Joe who's not a geek, what is "Web 2.0"?

Well according to Wikipedia, the free online encyclopedia…

"[T]he phrase Web 2.0 can refer to a perceived second generation of web-based communities and hosted services — such as social-networking sites, wikis, and folksonomies [collaborative tagging schemes] — which aim to facilitate creativity, collaboration, and sharing between users. The term gained currency following the first O'Reilly Media Web 2.0 conference in 2004. Although the term suggests a new version of the World Wide Web, it does not refer to an update to any technical specifications, but to changes in the ways software developers and end-users use webs. According to Tim O'Reilly, 'Web 2.0 is the business revolution in the computer industry caused by the move to the Internet as platform, and an attempt to understand the rules for success on that new platform.' Some technology experts, notably Tim Berners-Lee, have questioned whether one can use the term in a meaningful way, since many of the technology components of 'Web 2.0' have existed since the early days of the W!
eb."

There is no doubt the www has advanced significantly since inception, but there really is no new version of the www. It is simply much more useful to the everyday person.

However, if we counted each major innovation as a whole number and each minor revision as a tenth, we would already be into double digits. So why are we calling it "Web 2.0"?

If you have seen the latest Die Hard movie, or ever bought software for your computer, you will understand why we are not in Web 2.0. Even if we call it Die Hard 4.0 or MS Office 2007, it's still basically the same movie or tool. So what we are really experiencing now is more like Web 16.0.

If you have an in-depth, honest conversation with your web designers, they will tell you that Web 2.0 is a myth. So to explain how we got to Web 16.0, here's a history of the most significant events on the www.

WEB 0.1 -- 1958 – SAGE – Radar systems are first networked
WEB 0.2 -- 1960 – Packet switching is first created

WEB 1.0 – EMAIL – "A New Way to Send Unsolicited Mail Is Born"

Although the exact history of Email is a tad murky, it is generally accepted that it appeared in 1965, and was created so that people accessing a mainframe could communicate with each other. This was the first step in the interconnection of people, facilitating almost instant communication at no cost to the user.

WEB 1.1 -- 1967 – Markup language is created
WEB 1.2 -- 1969 – ARPA – A link is established between computers
WEB 1.3 -- 1696 – ARPA Net – First packet-switched network created

WEB 2.0 – WYSIWYG – "What You See Is What You Get (sometimes)"

With the invention of WYSIWYG in 1970, users could now be presented with a basic display of what their finished product would look like, as they were working on it. This removed the need to memorize complex code.

WEB 2.1 -- 1970 – ASP – First Application Service Provider (SAAS)
WEB 2.2 -- 1970 – Style sheets are created
WEB 2.3 -- 1971 – @ is created to separate hosts and users
WEB 2.4 -- 1973 – TCP/IP is created to simplify networking
WEB 2.5 -- 1973 – First connection to another country established
WEB 2.6 -- 1974 – The term "Internet" is adopted
WEB 2.7 -- 1976 – X.25 – The first network standard is approved
WEB 2.8 -- 1978 – International packet switching service created

WEB 3.0 – USENET– "The Black Market of the Internet"

Usenet was established in 1980 to offer mail and file transfers as well as give personal users access to news. Usenet is in fact a large network of servers all in communication with each other; a user posts something to the local server and that item is passed along to the other servers. Usenet was a major turning point because users could finally have an open conversation with anyone on the net, without needing to specifically know the user (unlike Email). The downside is that with a sometimes un-policed net capable of file transfers, the Usenet of today is a haven for piracy of all types, where anything you can imagine is accessible.

WEB 3.1 -- 1979 – Email is made available to personal computer users, millions of Nigerian Princes suddenly need public help

WEB 4.0 – REAL TIME CHAT – Going Outside Deemed "Obsolete"

Real-Time Chat was created in 1980 following users' frustrations with Usenet articles sometimes taking 24 hours to be updated. This signaled a turning point: online conversations became instant, albeit isolated into segregated groups.

WEB 4.1 -- 1980 – First ISPs created providing dialup internet
WEB 4.2 -- 1981 – TCP/IP becomes a standard
WEB 4.3 -- 1981 – US/Europe/Canada/Hong-Kong/Australia connect
WEB 4.4 -- 1983 – TCP/IP becomes the only standard
WEB 4.5 -- 1983 – First wide area network using TCP/IP operational
WEB 4.6 -- 1985 – FTP – The File Transfer Protocol is created
WEB 4.7 -- 1988 – IRC – Internet Relay Chat is created
WEB 4.8 -- 1988 – Bulletin Board Systems and Forums created

WEB 5.0 – HTML/HTTP/Web Pages – "It Has Begun…"

Around 1980, many researchers were using the internet, but they had no single way to create/display "documents" (web pages). Physicist Tim Berners-Lee and his colleagues needed a simple system for creating/displaying documents, but found that existing systems were too commercial, platform-specific or complicated for the average user. So they created their own relatively simple system, consisting of browsing software called "WorldWideWeb," a protocol for transmitting the information (HTTP) and a document annotation convention called "Hyper Text Markup Language" (HTML). This meant anyone could now create web pages using their simple language.

WEB 5.1 -- 1989 – Images can now be animated, oh the horror!
WEB 5.2 -- 1990 – The network now covers the entire world (publicly)

WEB 6.0 – Search – "Did You Mean: Google?"

Before 1990, there was no way to find a page; you had to know the specific location. Around 1991, search engines began indexing (storing) the content they found, giving users the ability to search for a page even if they didn't know the page's location.

WEB 6.1 -- 1991 – DNS – Dynamic Naming System is created
WEB 6.2 -- 1991 – The first text-based browser is created

WEB 7.0 – DHTML – "Because Non-Scrolling Text Is Boring"

The web was static until Dynamic HTML (DHTML) was created. DHTML introduced client-side scripting, allowing authors to include code in their web pages that performed an action upon being downloaded onto a user's computer. DHTML introduced rollover buttons and drop-down menus on web pages. It goes a long way to making the web more personalized.

WEB 7.1 -- 1993 – The first graphics based browsers are created
WEB 7.2 -- 1993 – Screen casts are first created
WEB 7.3 -- 1994 – Wikis are created; Britannica begins holding its breath
WEB 7.4 -- 1994 – The World Wide Web Consortium is formed
WEB 7.5 -- 1994 – CSS – Cascading Style Sheets created

WEB 8.0 – ONLINE DIARIES – "Teens Reportedly Misunderstood"

Online diaries were first created in 1994 as a means for people to store their diaries online for personal or public reading. Writers could now reach almost anyone worldwide at practically no cost, and everyone could create editorials on whatever subjects they liked, without fear of censorship.

WEB 8.1 -- 1996 – The first social bookmarking site created

WEB 9.0 – RANKED RESULTS – "The Online Popularity Contest"

Search engine results helped find things, but many of the results were useless or had nothing to do with the keywords used. As of 1996, search results started to be ranked based on a multitude of things, like how popular a page is. This made searching faster and easier, and significantly less painful.

WEB 9.1 -- 1996 – Flash is created, whole websites can now be animated
WEB 9.2 -- 1997 – The term "Blog" is adopted

WEB 10.0 – HIRED BLOGGERS – "Wow Isn't Product X Great!"

As of 1997, personal diaries began to evolve to what became known as "blogs." Many corporate websites and personal homepages had (and still do have) news sections, these were traditionally updated manually in a back-end system. With the advent of blogs, the commercial sector jumped in, seeing a new marketing medium.

WEB 10.1 -- 1998 – The first audio news site is created
WEB 10.2 -- 1999 – The first web-based operating system is created

WEB 11.0 – RSS – "Newspapers Deemed Obsolete"

Really Simple Syndication (RSS) was created due to the lack of a universal feed format. The creation of RSS means that users could now "subscribe" to feeds containing video, audio, text, or graphics. Users no longer had to trawl the web for new information, they could "subscribe" to a feed and have it sent to them directly.

WEB 12.0 – REMOTE SCRIPTING – "Waiting For 4 Seconds Now History!"

Remote scripting allows scripts running inside a browser to exchange information with a server, so that scripts could be triggered locally, processed remotely and have information returned directly to the browser. This made the web faster and easier to use, and removed the need to refresh the page for simple tasks like sorting.

WEB 12.1 -- 2001 – Blogs evolve from online diaries

WEB 13.0 – PODCASTING – "Now Everyone Can Avoid Listening To You By Choice Rather Than Circumstance!"

Podcasting originated as a portmanteau of the iPod® and broadcasting, although "portable on demand broadcasting" has now become the widely-accepted definition. Originally Podcasting was created to allow individuals to distribute their own radio shows, but it has become popular for a wide variety of things, from educational materials to the latest gaming news. Podcasting opens up distribution of audio content to anyone with a server, with users "subscribing" to the RSS feeds that appeal to them.

WEB 13.1 -- 2002 – Folksonomy is created, giving rise to "tags"

WEB 14.0 – VIDEO PODCASTING – "Web-Based One-Sided Conversations"

Shortly after Podcasting became popular, video Podcasting was created as a means to send the equivalent of TV episodes to users. Though similar to podcasting, the content was not limited to just "TV episodes". Video Podcasting opens up the video medium so that making a TV show is possible for anyone.

WEB 15.0 – VOIP – "High Tech, Dodgy Sounding Free Calls"

With the Voice Over Internet Protocol, telephone audio is sent over the internet, rather than a traditional phone line. This removes almost all cost involved, and also removes the need to have a physical phone line. What this means for consumers is calling becomes much simpler, easier and significantly cheaper.

WEB 16.0 – SAAS – "The Industry Makes a SaaS of Itself."

Software as a Service (SaaS) is just a new term for a concept that has been around since the dawn of the internet (ASP from 1970). SaaS refers to using a piece of software run/provided through the internet, and instead of paying a large one-off purchase price, you "rent" the software for as long as needed. So while SaaS is the buzzword of the day, the concept is decades old.

..The CONCLUSION?

So if you follow the basic rule that each total upgrade is a new ".0" then we are nowhere near Web 2.0. The story is really one of falling price, increasing reliability and bandwidth, coupled with ubiquitous access.

Simply put, "Web 2.0" is just shorthand for the development process outlined above. Bottom line, the web really becoming what the web really always should have been.

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Common Mistakes In Business Plans

Your business plan is typically the first impression potential lenders of investors get about your business idea. Even with a great product, team, and customers, and you are unable to convey to properly convey your image, it could be the last impression if your plan has some of the following, common mistakes.

Lenders and investors review hundreds of business plan every year and with every plan, lenders and investors become more cynical because the same mistakes pop up with regular frequency. With so much competition for a limited amount of capital, it is imperative to not make these mistakes.

1. Financials

Unrealistic Financial Projections - Simply saying that you are going to do $100,000 in sales is not enough nor can you simply say there is no way of knowing. Everyone knows there is no way to accurately come up with financial projections over the next three years, especially in a start-up. But, what is required in your plan is that reasonable assumptions are made and supported with research. By incorporating a detailed list of assumptions and how you arrived at your numbers, the lender/investor can judge your analysis and decision making process. If you are projecting to generate high sales outside of industry norms, explaining how you arrived at this conclusion is a must. Lenders and investors have seen many, many plans that claim sales are going through the roof once funded and as a result are very jaded at statements like this. Financial data that is inconsistent with industry averages and overly aggressive sales figures will raise flags. Explain every number.

Confusing Cash with Profits - Revenues do not always equal cash. For example, suppose you make a sale this month for $100 that cost $50 to produce. Assuming your buyer doesn’t pay for 30-60 and even 90 days if dealing with state or federal sources (and assuming they all pay), the effect on your cash flow is significant. Suppliers and employees still have to be paid for their work while you are waiting on payment from the buyer.

While you may not have a significant portion of sales coming from receivables, the timing of cash flows is critical for developing a financial strategy as cash flow is much more important than profits. Profits are an accounting concept while cash is money in the bank. If you don’t believe me try paying your bills with profits.

No Adjustment for Seasonality - All businesses are seasonal to some extent, some more significant than others. Seasonality refers to the percentage of sales that are made in a month. For example, most retailers have huge November and December sales and lousy January and February sales. Did you make enough cash during the good months to cover the slow months to cover salaries, rents and lights?

If You Build It They Will Come - Be careful in assuming once your doors open people will be streaming in to buy. You have a new, relatively unheard of business. This is a time when your business is particularly vulnerable as most of new owner’s cash reserves have typically been used to open the store. If sales projections are off during the first couple of months and you don’t have enough working capital to keep the lights on, you may be quickly going out of business.

Insufficient financial projections - Basic financial projections consist of four elements: Income Statements, Profit & Loss, Balance Sheets, and Cash Flow Statements.

For most businesses a three-year projection is sufficient, but if yours is a capital intensive one and will take longer to show profitability then use five. Actual figures are a must if you can get them and any number in the projections needs to be in the business plan narrative. If you are purchasing an existing business use the historical financials to show support for your sales figures.

No Quotes - Any significant expenses should have a quote accompanied in the appendix, especially for construction or remodeling as this is an area where most entrepreneurs slip as they do it themselves and greatly underestimate the costs.

2. Marketing

Failing to relieve the customer’s pain - Businesses are rewarded to make consumer’s pain go away. Pain can include; my car stopped working, my doggie is sick or my tax returns are too hard to prepare.

If your business plan can’t show how you are relieving the customer’s pain, then the chances for success in the marketplace is extremely limited.

Remember pain equals market opportunity. The greater the pain, the greater number of customer’s with this pain and the better you can relieve the pain equals greater market potential.

One Billion Customers Served - Claiming everyone needs your product/service will send a strong message to the reviewer that you don’t know your market and remove any credibility to your plan. In the good old days the shotgun approach to marketing could work as there were limited channels for advertisement. Today with unlimited outlets and more narrowly defined markets, this approach does not fly.

While it’s true everyone eats, not everyone will eat at your restaurant, nor could you effectively advertise to everyone. By researching the segments that are most likely to use your product/service and showing how your message will get to them will ultimately make your endeavor more successful. Having clearly defined target markets will show you have done your homework and be the cornerstone of a marketing strategy that can succeed.

We have no competition - Use this statement if your want your plan rejected. Every business has competition. While there may not be a direct competitor, meaning one that offers the same or similar product, there is always an indirect competitor.

Saying there is no competition tells the reviewer that you have either not done any market research or there is not a market for your product.

3. Organization

Writing For The Wrong Audience - A plan for a lender should be written differently than one for an investor. Banks are interested in seeing the likelihood that debts be repaid and investors are interested in the upside profit potential. Be sure to write your plan to your audience. For both, keep to the facts, keep it clear and keep it simple. If you don’t feel you have the writing abilities to make your plan shine, then get help.

Poor spelling and grammar - Leaving spelling and grammatical errors in your plan only tells the reviewer that you are not paying attention to details and may not pay enough attention to the business. Use spelling and grammar checkers and let others review your plan to make sure there are no errors.

Too repetitive - Many times, plans will cover the same points over and over. A well-written plan should cover key points only twice: once in the executive summary then again in greater detail in the narrative of the plan.

Remove the Jargon - Using simple language is imperative to getting a technical business funded. Don’t think that by using complex terms that lenders/investors will be so impressed with your knowledge that they will whip open the checkbook. Businesses that can’t be understood don’t get funded. If you can’t explain your business to a sixth grader your chances of funding are in jeopardy.

Investors are really only interested in your technology if it solves a problem that people will pay for, is better than the competition, can be protected through patents and can reasonably go to market without spending a lot of money.

Keep the technical details out of the business plan and in the white papers.

Appearance matters - Make sure your plan looks professional. Use professional printing, binding, keeping fonts consistent and easy to read. The more money being requested means investing more time in making sure your plan will stand out from the crowd. Be careful that you don’t go overboard and give the impression that the plan is all style and no substance.

Length - A long business plan does not make a better business plan. All of the industry and marketing research won’t save a flawed plan. Too many plans have been immediately rejected because they are too long. Lenders and investors favor entrepreneurs who can efficiently demonstrate the ability to efficiently get to the point.

An executive summary should be no more than 1-3 pages. Ideally it should only be one page but some complex plans require more. An ideal business plan is 20-30 pages, including financials. Remember less is more!

Use operating plans, white papers and marketing plans for the in-depth details.

Fluffing - Using phrases like "unmatched in the industry;" "narrow window of opportunity;" or "ground floor" are empty phrases filled with hype. If anything, the cynical reviewer will be turned off by the hype and trash your plan. Stick with laying out the facts – what is the problem, how will you solve the problem, how big is the market, how will consumers buy it and what is your competitive advantage. If the opportunity is there the lender/investor will be able to make the decision for themselves.

Overvaluing the business idea - What gives a business value is not the idea but the execution of the idea. A great idea is a start, but almost everyone has had a great idea at some point in their lives. How you will execute this idea is what sets apart a real business from the dreamers.

4. Execution Mistakes

Waiting too long - Funding a business takes a long time. Expect three months at a minimum after finishing your business plan to get funding. Unless you have sufficient capital, other sources of income and can be funded in-house at a bank, this number may be reduced. Bank financing for business with less than two years of operating history are typically funded through an SBA guarantee, which requires additional time, patience and paperwork. Financing through investors is usually an even longer process as they have a lot of people competing for their money and they tend to do significant due diligence to secure their investment. Waiting until you need the money is a sure way to keep your business from launching.

Unreasonable time lines - Many business owners underestimate the timelines for completing milestones. Its human nature to think we can do things faster than is possible. When getting a business started there will be several tasks you could not have anticipated and the some tasks you think will be easy which will end up taking much longer. It is best to overestimate and finish early, rather than scramble and execute your opening poorly.

Failing to seek outside review - When preparing your plan, be sure that you have at least a few people review it before sending it out. Preferably look for people in your industry or who have a specialization in sales, distribution, etc that could lend a fresh set of eyes and find any flaws in the plan. Being so close to the action can keep you from being objective and this additional scrutiny may save you countless headaches and money down the road.

Perfecting - It can be easy to spend countless hours perfecting your plan and ultimately never launching. Remember, your plan will never be perfect and in practice should be continually updated as you learn more about the business, market and customers. Don’t make your plan an academic practice, finish it and get in front of investors and lenders. Use this feedback to see if your plan really needs the additional perfection.

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Fundamentals Of Design Professional Malpractice

In today’s litigious society, no profession can escape the cost and aggravation of legal claims and suits. Design Professionals, architects and engineers, are no exception. One important and distinct type of claim or suit is the professional liability or malpractice claim.

A variety of other types of claims and suits may be made against the design professional, such as claims for ordinary negligence, such as automobile liability cases, or slip and falls on the company’s property. There are suits for wrongful employment practices such as discrimination, sexual harassment, or wrongful discharge. Finally, there are suits for commercial disputes over contracts, trade secrets, and patents.

Professional liability claims are unique and distinct from other types of claims because they are made against the professional in relation to the performance of professional services and the specific duties owed by professionals which are not applicable to the public at large. As a result special rules and standards apply to these claims that do not apply to other types of negligence actions.

A claimant may file a claim or suit asserting professional negligence, as a tort, such as negligence or misrepresentation, or may assert the claim as a breach of contract claim or that the design professional was negligent in the performance of its contractual duties.

ELEMENTS OF A CAUSE OF ACTION FOR PROFESSIONAL MALPRACTICE

In the absence of a specific contractual undertaking, the architect or engineer design professional owes legal duties to perform their work in accordance with the standard of practice of their profession.

Generally speaking, in order to prevail on a professional malpractice or professional negligence cause of action, the Plaintiff must assert and establish:

a. what the standard of practice is for the design professional under the circumstances;

b. that the design professional violated the standard of practice, and the way in which the standard of care was violated; and

c. that the Plaintiff suffered damages as a proximate result of the violation of the standard of practice.

STANDARD OF PRACTICE

What does it mean for there to be a standard of practice or a violation of the standard of practice? The standard of practice is the exercise of ordinary skill and care common to the professional under the circumstances. It is not the average performance of all professionals or the best performance of professionals. The standard of practice can relate to any aspect of a design professional’s work, from design to construction administration.

Just because a majority of professionals would do a task a certain way or that the claimant’s expert would do it differently does not mean that the way that the design professional performed the task is wrong or was a violation of the standard of practice.

Professional negligence must be contrasted with ordinary negligence. Professionals, like any other person, can be sued for ordinary negligence for matters not relating to their professional duties and practice. For example, if a person slips and falls on ice on their property of the professional, in the course of driving to or from a construction site, negligently causes a motor vehicle accident, those claims would be ordinary negligence claims where the standard of practice would not be applicable.

The design professional does not guaranty success (unless the design professional contractually or expressly makes a guaranty or warranty), and a bad result does not necessarily constitute a violation of the standard of practice.

Ordinarily, a claimant must present expert testimony to support a claim of professional negligence. There is an exception where the alleged professional negligence is a matter of common knowledge, or if the defendant professional establishes by his/her own testimony the standard of practice and breach.

PROXIMATELY CAUSED DAMAGES

Proximate cause is a legal term that involves elements of forseeability and a close relationship between the conduct alleged to impose liability and the damages.

In the context of claims against design professionals for malpractice, it is often alleged that the design professional should have designed the building or system differently, specified different equipment, or omitted something of significance from the design or specifications.

However, where the alleged damages involve things that should have been provided, but were omitted, or where betterments or improvements should have been specified or designed into the building or system, those may not be proximately caused damages. If the additional work or additional equipment, such as more expensive or sophisticated features or controls, would have been required had the design professional acted properly, then those costs would ordinarily have been incurred by the owner at the time of construction if the professional had not been negligent, and are not proximately caused damages. If the alleged damages involve improvements that make the building or system better or more valuable to the owner, then those betterments may not be proximately caused damages as the owner would benefit from those improvements and would have paid for those betterments.

On the other hand, if the cost of providing those improvements including the cost of the additional equipment or system, or the cost of installation of that additional system or equipment is more than it would have been had the design professional properly designed the system or properly prepared the specifications at the outset of the project, then those additional costs may be recoverable as proximately caused damages. For example, if the price of purchasing the additional HVAC equipment has gone up since the original contract and bidding process, or if it would cost more to install the equipment after the fact because other equipment would have to be remove and reinstalled, then those would be recoverable costs and/or expenses.

BREACH OF CONTRACT VERSUS NEGLIGENCE

Completely apart from the issue of professional malpractice for violating the standard of practice, a design professional may be liable for breach of a specific contractual promise or a specific guaranty or warranty.

However, in the absence of such a contractual undertaking or warranty, to what extent is a design professional liable to a third party under principles of contract or tort?

Historically, Defendants and design professionals were not liable to third parties for property damage or bodily injury, or to other contractors for their economic losses, in the absence of privity of contract, i.e., a direct contractual relationship with the party making the claim.

The principles of privity of contract were eroded over the years both in ordinary negligence cases and in professional liability cases and claims have been allowed in most states against professionals by third parties in spite of the lack of contractual privity.

However, at least in Michigan, recently there has been a movement in the opposite direction limiting the liability of contractors and design professionals to third parties.

The court in Matrix relied upon a Michigan Supreme Court decision in Fultz v Union-Commerce Associates, 470 Mich 460-463 (2004) which held that a third party cannot sue a contractor without having a contractual relationship with the contractor in the absence of proving some duty owed to the claimant independent of the duties undertaken by the contractor under the contract with the owner.

Other states still allow suits by third parties against design professionals in the absence of privity of contract.

Third party Plaintiffs which are not in contractual privity with the design professional may also assert that they are third party beneficiaries of the contract between the design professional and the owner and thus entitled to sue. This approach often does not succeed because a third party beneficiary must establish that the parties to the original contract with the owner intended to benefit the third party.

FRAUD AND MISREPRESENTATION

Claims against design professionals for fraud or misrepresentation are generally considered distinct from ordinary malpractice claims involving breach of the standard of practice. They do not require proof of the standard of practice and violation of the standard of practice, but rather have their own independent elements as follows:

a. a misrepresentation or omission of an important fact;

b. the misrepresentation or omission was made negligently, innocently, or intentionally;

c. the claimant reasonably relied upon the misrepresentation or omission; and

d.the claimant suffered damages as a proximate result of the misrepresentation or omission.

Frequently claimants will assert misrepresentation or omission allegations against design professionals relating to errors or omissions in specifications, or in statements made to the contractors in the course of the bidding process or construction or administration of the contract. In such cases, the third party may not be able to establish the necessary element of reasonable reliance where the design professional’s duty is owed to the owner, not the third party.

Claims for misrepresentation often require a higher level of proof, i.e., proof by clear and convincing evidence.

Misrepresentation claims by third parties may be allowed even where professional liability claims based on breach of contract are not, because they are considered to be a distinct type of claim.

STATUTE OF LIMITATIONS/STATUTE OF REPOSE

One of the different rules applicable to professional liability claims is the time period during which a claimant can sue, or the statute of limitations or in some instances a statute of repose. A statute of limitations usually limits a claimants right to sue after a certain number of years after the claim accrues. The accrual date can be the date of the alleged wrongful act, the completion date of a project, the date of the injury or damage, or in some instances, the last day that the professional performed services for its client.

A statute of repose limits the time after which suit can be performed to a certain number of years after a date, often the completion or occupancy of a project or building, without regard to when the injury or damage occurred or could have been discovered. Thus a statute of repose could preclude a suit even though the damages had not occurred or became manifest or discoverable before the deadline.

COMMON CAUSES OF MALPRACTICE CLAIMS

Malpractice claims can arise out of a variety of situations and causes too numerous to relate. However, some of the more common ones are addressed here.

Many malpractice claims arise out of disputes over the scope of work and claims relating to oral agreements or representations. As a result, it is very important for the design professional to document its scope of work and all agreements or understandings, even for small projects and for clients where there is a long term ongoing relationship.

Too often, after an initial proposal or professional services contract for an initial project, and after an ongoing relationship settles in, informalities arise, where formal documentation of the project and scope of work can go by the wayside. If a major loss or claim arises, that prior close or long term relationship may not prevent disagreements over scope of work and duty issues or prevent one party from asserting revisionist history to support their claim. Good documentation is an important measure to prevent malpractice claims and help defeat them when they arise.

Similarly, informal or oral decisions or changes made in the field without the necessary investigation, communication, and documentation can lead to malpractice claims based on ambiguous decisions or change orders, lack of owner consent, or insufficient information.

Failure to address complaints or issues raised by the owner, or contractors, in a timely fashion and respectfully can cause anger and blow out of proportion a manageable issue that could have been solved early at little expense. Complaints over billings or charges that are ignored or blown off can sometimes lead to other claims of poor work or services and snowball into a malpractice suit.

Where delays are caused by unexpected circumstances or conditions, bad weather or supplier issues, claims may be made against the owner for delay damages and extra expenses or result in litigation against the contractor for delayed or uncompleted work, missed deadlines, and poor workmanship. These claims often result in the design professional being brought into the fray and litigation. It is best to identify and address these issues clearly and directly with the owner and contractor and resolve them before the amount of money and time involved becomes critical to either side making litigation more likely.

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You Can Reduce Your Contracting Risks

One frustration all risk managers experience is being brought into the contract process when it is too late to reduce the risk. Only yesterday, I was asked to review a contract for the acquisition of health equipment. When I sent my recommendations back to our contract negotiator I was told “But it’s too late – we already told the supplier that the draft they approved was the final version.”

The best time to negotiate contract terms and conditions is before the contract is signed!

Contract law is complicated, involving numerous federal, state and municipal laws (not to mention internal policies, procedures and protocols!) that apply different conditions depending upon the type and cost of the item under consideration.

Terms in the tender document or request for proposal are the starting point for most acquisition processes. The language of the tender or RFP is critical to successfully achieving a satisfactory relationship with the supplier of goods or services. The terms of the tender document, with the terms of the successful bidder’s response, are substantially the terms that will be included in the final contract. Procurement officers need to know the extent of negotiating ability they have upon receipt of bids or proposals. The variety in responses possible from bidders can often lead to very good reasons for going off in a new direction. But, straying too far from the tender specifications can quickly lead to multiple claims from unsuccessful bidders.

Purchasing and Risk Management Departments must work closely with other corporate colleagues to review or create business contracts that limit the organization’s liability exposure. Well-drafted, the indemnification and insurance clauses ensure that if something goes wrong it is clear who will bear financial responsibility.

The Risk Manager’s Role

The importance of risk transfer requires Involving risk management early in the process. The risk manager can help examine the purpose of the contract from an ‘outsider’s perspective. Specifically - what could go wrong with the work (or product/service)? If something were to go wrong – what are the implications of that problem? “Implications” can be financial cost, a delay in using the end result (e.g. a building), negative publicity or any combination of these three outcomes.

Risk manager can provide advice and consultation in structuring tender or RFP, assist colleagues in properly drafting contracts consistent with corporate policies and minimize financial risk by identifying and dealing with possible contingencies. They do this because they know that poorly prepared contracts can lead to nasty surprises. You want to enter into contracts with some assurance that the end result will satisfactorily meet your expectations.

The classic risk management process is helpful in conducting a review of any proposed transaction. To avoid surprises, you need to identify risks by considering what potential downsides can arise from the project. Once this step is complete, assess the risk by determining how likely it is that something will go wrong and if it does, how expensive the problem is likely to be.

The contribution of the risk manager to the contract language is central to successfully achieving risk transfer. Clearly define the circumstances under which the contractor will hold harmless and indemnify the municipality for losses arising from the supply of goods or services. If a serious loss occurs, these clauses can be analyzed word-by-word. Any ambiguity is likely to be held against you. Review and revise both the hold harmless and indemnify clauses until it is absolutely clear to you and to your procurement officer.

The term “Contractual Risk Transfer” is used by risk managers to avoid saying ‘passing the buck’. The goal is to always make the party who has control over the products or services accept financial responsibility.

Usually insurance does not cover problems arising from poorly-drafted contracts, negligence in the procurement process or poor performance of the work described by a contract. For example, there is usually no coverage for situations where unauthorized employees engage in work under an unapproved contract or for breach of contract claims. Poor business judgments and financial mistakes are also the responsibility of the organization. Claims arising from these errors typically must be paid by the municipality as those costs are rarely transferable to insurers or anyone else. The municipality is likely to incur all of their own costs arising from problems, plus any award to the claimant.

Always use written contracts and state terms and conditions clearly. In many situations verbal agreements are legally permissible. Properly drafted written contracts, however, reduce the chance of misunderstandings in the future. Documented business transactions protect the rights of all parties to the contract. The written contract provides an audit trail and authorizes the use of funds when paying invoices. Further, if the subject of the contract becomes an adversarial issue due to a lawsuit, the contract can show the intent of both parties at the outset of the work.

Written agreements ensure both parties have an opportunity to clear up at the negotiation stage any confusion or differing interpretations. The main purpose of written contracts is to prevent conflicts or litigation caused by inadequate documentation of crucial points. It is time-consuming and expensive to take issues to court for interpretation. Judges may interpret the contract differently than either party intended. The courts do not usually consider very great weight to verbal evidence as verbal statements are considered unreliable once a dispute has arisen. When contracts are vague or indefinite, or the intended performance cannot be determined, the court may rule the contract unenforceable - to the disappointment of both parties.

Power does not always prevail – when one party is larger than the other it may make them feel that they can dictate contract terms and conditions. Remember that you want a contract that is enforceable. When unfair bargaining strength is used, it can become contentious later if other problems arise. It is in all parties’ best interest to avoid ambiguous language and unreasonable or unlawful conditions. Always be prepared to be flexible and to take the time required for a good result!

Remember, it is important to note that any language showing a clear intention to negotiate cannot defeat an inherent duty of fairness with which the municipality must conduct themselves at all times. The trade-off is clear: the more extensive the negotiations, the more stress it puts on the municipality’s duty to be fair to all bidders.

To ensure changes are binding make them in writing and have the amendments signed by duly authorized representatives of both parties. This documents the change, provides clarity and binds both parties should problems arise later.

Three clauses complement and support the risk management process. They are hold harmless, indemnification and insurance. I recommend that these clauses be written separately.

In most vendor-provided contract documents, the Indemnification/Hold Harmless provision is far broader than what your organization would want to accept. Many vendor-provided indemnification and hold harmless clauses are limitless. If you accept these clauses you may be accepting responsibilities that your organization never wanted nor intended to assume and may not be able to insure. Usually you want to only sign contracts where the language limits your liability to acts over which the municipality has control and to the extent that it exercises that control. Assuming liability for independent contractors and consultants who are not under the municipality’s control is unwise.

The intention of the hold harmless clause is to describe exactly what type of circumstances the supplier accepts responsibility for. In particular, they specify who will pay for loss or damage arising out of the performance of the work contemplated by the contract. Most corporations will only enter into contracts in which the indemnification language limits their liability to acts over which they have control and to the extent that they exercise control. The hold harmless clause however, is only one clause of the trio needed to adequately protect the parties.

The second clause used is an ‘indemnity clause’. It will state that if something does occur leading to a loss, of a type that I/we have held you harmless for – then we will pay on your behalf (or reimburse you) any costs arising from our negligence. In other words, ‘the buck stops here’.

The final clause of the trio is the insurance clause. The insurance clause promises that the party performing the work (e.g. builder, supplier, etc.) will obtain and maintain the type and amount of insurance that you have stipulated to pay for any claims, losses and related expenses that may arise out of their negligence in performing the work planned in the contract. The intention is to ensure that the contractor has sufficient financial resources to support the indemnification provision in the contract.

With these three clauses, you have obtained a promise from your supplier or contractor to:
1. accept responsibility for their own errors or negligence,
2. pay any costs arising from those errors or negligence, and
3. carry insurance evidencing sufficient resources to keep their promises.

Often, I find that contract document presented by contractors have been written by lawyers or other ‘non-insurance’ professionals. In these cases, the language used may be out-of-date or simply not reflective of terminology used by insurance professionals. When this occurs, it is prudent to revise or replace those clauses with descriptions and phrases commonly used in the insurance industry today. This reduces the chance of ambiguity and difficulty in obtaining evidence of the type of insurance you want the contractor to carry. The most common example I see is the phrase “Additional Insured’ VS ‘Additional Named Insured’.

It is important that this phrase be limited to ‘Additional Insured’. Additional Named Insureds have at least two disadvantages: only Named Insureds are responsible for paying premiums and some policy exclusions apply only to Named Insureds. Benefits to your municipality of being an additional insured are:

 Coverage remains in force for Additional Insureds if a Named Insured breaches a policy condition,
 Reinforces risk transfer agreements in the contract,
 The Additional Insured has a right to claim defense from the insurer, and
 It usually prevents the insurer from subrogating from the Additional Insured.

Certificates of Insurance:

There is much debate amongst the risk management and insurance community about the value of obtaining and maintaining evidence of insurance on contracts. Certificates of Insurance verify the type of insurance that the Named Insured on the policy has purchased and specifies the coverage levels under that policy at the point in time that the certificate is issued. I firmly believe that certificates are of limited value – but they are the best and only evidence available at this time providing some level of comfort that contractors have a source of funds for defined claims situations.

There are two broad categories of certificates, those that you receive coming in and those that your send out to other parties. Municipalities usually receive certificates and infrequently send them to others.

Incoming certificates of Insurance are commonly issued by the contractor’s insurer or insurance broker. To be valid, I want to see the ‘live’ signature of a person authorized by the insurer to issue the certificate. Before issuing a certificate, the insurer wants some information describing reason for the certificate, the length of the subject of the certificate (e.g. a multi-year contract) and specific details of the name of the contact person/mailing address of their and at your organization.

Upon receipt of a certificate in your office, you will want to see at least the following information:

• name and address of the organization to whom the Certificate is being issued,
• brief description of planned activities/work,
• name and address of the Named Insured, (who must match the name on the contract)
• amount and type of insurance in force,
• effective dates of coverage, and
• a statement that your municipality is included as an ‘additional insured’.


When you are asked to issue certificates of insurance you should review the contract to be sure that you provide evidence of the proper type and amount of coverage required. Under no circumstances should you issue a certificate on behalf of any party or other organizations independent of your municipality, no matter how close a working relationship you may have with it.

When reviewing tender or RFP documents and the contracts that arise from them you can effectively use the risk management process to review the proposal and draft appropriate language. Manage exposure in any contract situation by ensuring conformity with generally accepted ‘due diligence’ practices from the very beginning. Be sure that appropriate risk transfer provisions are included at the tender or RFP stage. Finally, once the contract draft is agreed upon, ensure that evidence of insurance (and bonding, if required) is obtained and maintained throughout the life of the contract. As a risk management professional, remember that your training and experience makes YOU an expert who can protect your municipality.

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Buying Your First Home - A Guide for the Beginner

Becoming a first-time home buyer is a tremendous step in life. The sense of personal accomplishment, pride, satisfaction, and joy is irreplaceable. It is not without it's challenges, though. Because of the huge number of options available to you as a potential buyer, you need to take the time to become familiar with an overview of the buying process, the terminology used, and how to best approach buying your first home.

My strong suggestion to you as a first-time home buyer would be to seek competent, professional financial guidance. It is relatively inexpensive, and could save you from making a costly mistake. Buying a home is not right for everyone. Even if it is a good choice for your financial future, you may need to take the time to save money for a down payment, or to fix any issues with your credit. Be patient, and make your preparations carefully...

Below is a list outlining the buying process. Review it to become familiar with the steps involved. Oh, and one last, very important bit of information before you get started...Everything, and I do mean everything, in real estate is negotiable. Repeat that over and over to yourself and never forget, everything is negotiable...

Pre-Qualification

After making the commitment to buy a home and getting your finances in order, it is time to speak with a professional in the mortgage business. Ask your friends and family for referrals. Take the time to ask questions and get familiar with the basic terminology used, plus to discover any pitfalls. The terms of your mortgage will have a lasting affect on your financial well-being, so make sure you fully understand what you are being offered. Ultimately, you want to become pre-qualified for a reasonable, affordable amount of money with which you can purchase a home.

I personally recommend speaking to at least three mortgage brokers or banks to get your best deal. Also, I would avoid having your credit run during this process until you are ready for the next step. Most good mortgage brokers should be able to estimate your buying power from a short interview.

Pre-Approval

Prior to beginning an in-depth search for a home, I would suggest going beyond pre-qualification and getting fully pre-approved. In this step, the mortgage lender will take a detailed look at your credit, finances, income, and other factors to solidify the amount of money available to you for a home. The primary difference between pre-qualification and pre-approval is you are shopping for a mortgage lender and getting educated about the loan products available during pre-qualification, but you have decided to commit to a lender and submit to the complete application process during pre-approval.

List of Needs & Wants

Make 2 lists. The first should include items you must have (i.e., the number of bedrooms you need for the size of your family, a one-story house if accessibility is a factor, etc.). The second list is your wishes, things you would like to have (pool, den, etc.) but that are not absolutely necessary. Realistically for first-time buyers, you probably will not get everything on your wish list, but it will keep you on track for what you are looking for.

Representation by a Professional

It is very important that you can communicate clearly, honestly, and openly with any person who will directly affect your decision-making process. I know it is better to work with a real estate professional because of personal experience, plus feedback I constantly receive from clients and customers, so I highly recommend carefully choosing a representative to help you complete this important transaction.

A quick word about buyer representation. In a great majority of situations (95%+), a buyer's agent is compensated out of the seller's equity. In plain English, this means unless your agent requires a small administration fee for services, you will not be responsible for compensating your agent at all for their services. It is very important you fully discuss this with your Realtor®, as there are simple contracts available that will put this information in writing and help protect your interests should a dispute arise.

Also, just to anticipate and answer a question you may have on this topic, these costs are not passed back to the buyer through the sales price of the home. The reason for this is because the market, combined with a ready, willing, and able buyer sets the price for the home. The seller decides on an asking price, and may have a bottom line price, but you as the buyer ultimately decide what the home is worth. So, get a good Realtor®, study the market thoroughly, and make a fair offer based upon the comparable homes in the market. If the seller decides to accept your offer, you will have purchased the home at a fair price, and not one inflated to pay for the seller's costs or Realtor® fees.

Meeting with your Real Estate Agent

Come to the first meeting with your agent with an open mind and lots of questions. You should be doing a majority of the talking and your agent listening to gather all of the information necessary to help you find your ideal home. Make sure you share your list of wants and needs, plus the information you learned from the mortgage broker. Your agent should be taking notes and reiterating accurately whatever is discussed.

I want to talk briefly about the importance of effective communication with your real estate agent. Buying a home should ultimately be a fun, rewarding, educational, exciting experience. It will not be free from challenge, though. You will at times find yourself frustrated, discouraged, and confused. This is completely normal, especially considering the magnitude of the transaction. Your Realtor® needs to know this information, both good and bad. Without knowledge of your feelings and concerns, the usefulness of your agent can be nullified. Make sure you are comfortable enough with your Realtor® to tell them 'no', or to be completely honest with your needs and wants. Make sure your communication is effective by listening to what your agent says and ensuring it is what you are expressing.

Focus & Organization

In a convenient location, keep handy the items that will assist you in maximizing your home search efforts. Such items may include:

1. One or more detailed maps with your areas of interest highlighted.

2. A file of the properties that your agent has shown to you, along with ads you have cut out from the newspaper.

3. Paper and pen, for taking notes as you search.

4. A camera to help refresh your memory on individual properties, especially if you are attending a series of showings.

5. Location: It can be beneficial to look at a potential property as if you are the seller. Would a prospective buyer find it attractive based on school district, crime rate, proximity to positive (shopping, parks, freeway access) and negative (abandoned properties, garbage dump, source of noise) features of the area?

Visualize the House Empty & With Your Decor

Are the rooms laid out to fit your needs? Is there enough light? Will the home require any updating? Are the mechanicals in good shape? What about the roof? Try to keep accurate notes on both your feelings regarding the home, plus objective features that may or may not be positive. Keep in mind that it is always an option to ask the seller to gives allowances for updates or changes as part of the negotiation process, or to make the changes yourself for the right home.

Be Objective

Instead of thinking with your heart when you find a home, think with your head. Does this home really meet your needs? There are many houses on the market, so don't make a hurried decision that you may regret later.

It is important to know your personal strengths and weakness in the home buying process. Some people love the thrill of the hunt and seeing lots of homes looking for a positive feeling, while others are just interested in the facts and objective features the home offers. Some people are a combination of the two. Whatever your style or technique happens to be when searching for your new home, you must be honest with yourself and emphasize your strengths while seeking help with your weaknesses.

I recommend in the initial phases of the home buying process that you try to keep your time in any home you view short and focused on finding positive first impressions. There really is a difference between finding a house and discovering your new home and I believe emotion and feeling plays a role in the process, but don't let emotions cloud your judgment. Be relaxed and aware of your emotions in this initial phase.

Once you have narrowed your choices and become comfortable with the buying process, it is time to schedule second showings and to put on your objective hat. Now you are looking at the details from an investment standpoint, a functionality perspective, and determining whether or not there are any faults that would negate the viability of the home. It is here your Realtor® can be invaluable. Use your Realtor®'s experience and knowledge to help you step back and look at the home through the eyes of an investor. You may be surprised at what you find!

Make an Offer

Once all of the research is complete and you are certain you have found your new home, it is time to put together an offer. Again, the competent guidance of your Realtor® is critical at this point. Together, you must determine a fair amount of money to offer for the home, plus you must complete an accurate, comprehensive, legally-binding Sales and Purchase Agreement. Any mistake, error, or omission at this stage can become very costly in both dollars and emotions later. If you are at all uncertain or uncomfortable, seek professional legal advice before you sign any agreement.

A word about market perceptions. Today, we hear constant talk about it being a "buyer's market". What does that mean to you on the buyer's side of the transaction? I wish it meant that you could offer 15-20% below the asking price of the home and the seller would gladly accept, but that is rarely the case. Very simply, we find ourselves in a buyer's market due to an over-supply of homes and a lack of qualified, motivated buyers. It will affect prices in most areas, but the adjustment will be more in the neighborhood of 1-3%, if anything.

That being the case, what are the advantages of being in a buyer's market? Let me just name a few and you should be able to see many others. Besides the possibility of a reasonable savings on price, sellers are more willing to provide allowances for closing costs, updates, or other incentives to get you to purchase their home. In addition, you have a tremendous variety of homes from which to choose. Plus, fierce competition for the best homes is reduced, thus allowing you a greater chance of not paying an inflated price for the home of your dreams. When you hear talk that we are in a buyer's market, just imagine yourself in the seller's shoes...Most people are not going to give away their home for less than a fair market price, so look to negotiate other benefits from the deal.

Be Thorough

A few extra dollars well spent now may save you big expenses in the long run. Your real estate agent should competently guide you through this phase, but you should be aware that after you have an accepted offer, you still need to perform due diligence to ensure you are making a sound investment. Don't forget such essentials as:

1. Having the property inspected by a professional inspector.

2. Requesting a second walk-through to take place within 24 hours of closing to ensure the home has been left in the agreed upon condition.

Congratulations on your decision to educate yourself thoroughly regarding one of the largest financial transactions you will ever undertake! While the process may seem daunting and a tad overwhelming at first, with the help of a competent Realtor®, plus other industry professionals, you should be well on your way to a satisfying, positive, purchase of your new home. Good luck, and remember... This is supposed to be fun!

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