Professional Liability of the Independent Consulting Petroleum Engineer
Authors: Hafley I.D. 
Published: December 2007

This paper alerts the consultant to his potential for professional liability by using three hypothetical examples to illustrate situations from which such liability could arise. The two most common legal bases for liability are breach of contract and tort. The paper also discusses how a consultant can avoid such liability.

Introduction

When I first was asked to write this paper, I envisioned a technical, legal research paper, such as a lawyer would publish in a law review or other legal publication. On publish in a law review or other legal publication. On reflection, however, it occurred to me that those who will read this paper are engineers, not lawyers, and are interested in answers rather than the legal reasoning used for arriving at those answers or the citation of proper legal authority to support them. Also, it became apparent after I began my research that the topic of a consulting petroleum engineer's professional liability, not limited to the petroleum engineer's professional liability, not limited to the laws of any particular state, is so broad that it simply prohibits anything except a general treatment of the prohibits anything except a general treatment of the subject. Instead, I decided to use three different hypothetical situations that my experience as an oil and gas lawyer and several of my petroleum engineer friends told me represent the types of activities in which a consulting petroleum engineer may engage. With these examples I hope petroleum engineer may engage. With these examples I hope to illustrate how a consulting petroleum engineer might incur professional liability, both to his client and to third parties. While these illustrations will not solve any parties. While these illustrations will not solve any particular professional liability situation an engineer might particular professional liability situation an engineer might have, I hope they will alert him to how such situations arise so that he can avoid them.

General Liability Theories: Contract and Tort

The legal bases for professional liability, or malpractice, are essentially the same as those for ordinary liability. Although there are a number of legal theories under which liability can arise, there are two main theories that cover most situations - breach of contract and tort. A contract is simply an agreement between two or more parties under which each party promises to do something parties under which each party promises to do something for the other in return for the other's promise to do something for him. For example, I promise to sell you my car for $500 and you promise to buy it from me for $500. If I then tender the car to you and you take it, but refuse to pay me, you have breached our contract and I may sue pay me, you have breached our contract and I may sue you and recover a judgment. Here, the amount of damages that I should recover is $500 (the value of your promise to me) regardless of the true value of the car. promise to me) regardless of the true value of the car. Conversely, a tort is a legal injury and does not involve any sort of promise. Rather, the basis for tort liability is a breach of the duty imposed by law on an individual to act according to certain standards in relation to his fellow man. Torts comprise two general categories intentional and unintentional. An example of an intentional tort is battery. If I become angry with you and hit you, that is battery. Unintentional torts occur where the actor does not intend to injure another, but does so through careless or thoughtless actions or failures to act. The primary basis for unintentional tort liability is primary basis for unintentional tort liability is negligence. Negligence in an ordinary tort case is the failure to act as a reasonable and prudent man would under the same or similar circumstances.

JPT

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