Dead Man's Bluff

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MGest

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A friend of mine transferred his license to a company whose original owner had passed away. He was told that if he were to agree to do so, he would also have to sign an affidavit stating that he now bears the responsibility of all the deceased's open jobs and they are now his jobs. Is this true and required by code/law? If so can someone quote me the source? This story occurred in NYC, so I'm wondering if this isn't part of the NEC but specific to NYC's administrative code. In any case, I would be very appreciative if someone could point me in the right direction.

Be well
 
The NEC has nothing to do with licensing laws, you would have to check the NYC laws or better yet, an attorney.

Roger
 
MGest said:
A friend of mine transferred his license to a company whose original owner had passed away. He was told that if he were to agree to do so, he would also have to sign an affidavit stating that he now bears the responsibility of all the deceased's open jobs and they are now his jobs. Is this true and required by code/law? If so can someone quote me the source? This story occurred in NYC, so I'm wondering if this isn't part of the NEC but specific to NYC's administrative code. In any case, I would be very appreciative if someone could point me in the right direction.

Be well
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Seems to me that your friend needs to spend some money on an attorney that understands the contracting business in NYC. I would personally not be signing much of anything I did not understand until my lawyer gave it a good look. Nor would I be taking on a responsibility I did not understand the scope of. But it seems like he may already have signed on for the responsibility without knowing what he signed onto.

I would also be curious who has created this affidavit, and for what purpose. The affidavit may not mean much if he has already transferred his license. In most cases, it does not matter much if someone else started the project. The guy who holds the license currently is responsible for them, affidavit or not.
 
petersonra said:
Seems to me that your friend needs to spend some money on an attorney that understands the contracting business in NYC. I would personally not be signing much of anything I did not understand until my lawyer gave it a good look. Nor would I be taking on a responsibility I did not understand the scope of. But it seems like he may already have signed on for the responsibility without knowing what he signed onto.

I would also be curious who has created this affidavit, and for what purpose. The affidavit may not mean much if he has already transferred his license. In most cases, it does not matter much if someone else started the project. The guy who holds the license currently is responsible for them, affidavit or not.
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I can't see doing this unless, at a minimum, he's getting a piece of the company. And a hold harmless agreement, and an iron-clad E&O policy to cover his you-know-what six ways from Sunday. Succinctly, if he's assuming the risk, he should be compensated accordingly. Suppose one of these jobs goes to heck in a hand cart, something serious enough to put his license at risk. I'd want to know that my potential lost income is covered.
 
petersonra said:
Seems to me that your friend needs to spend some money on an attorney that understands the contracting business in NYC. I would personally not be signing much of anything I did not understand until my lawyer gave it a good look. Nor would I be taking on a responsibility I did not understand the scope of. But it seems like he may already have signed on for the responsibility without knowing what he signed onto.

I would also be curious who has created this affidavit, and for what purpose. The affidavit may not mean much if he has already transferred his license. In most cases, it does not matter much if someone else started the project. The guy who holds the license currently is responsible for them, affidavit or not.
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Yes, has signed on already naively and he will use an attorney if he needs to. He was just inquiring if there would be any point to it. He suspects that he was made to sign on unjustly. That although he now owns the company, is it actually in the Administrative Code that he is required to bear responsibility. As for the affidavit, that's exactly the point. He suspects that the affidavit was the whim of someone in the city that just wants to cover all bases, but not actually required by code.

Thanks
 
gadfly56 said:
I can't see doing this unless, at a minimum, he's getting a piece of the company. And a hold harmless agreement, and an iron-clad E&O policy to cover his you-know-what six ways from Sunday. Succinctly, if he's assuming the risk, he should be compensated accordingly. Suppose one of these jobs goes to heck in a hand cart, something serious enough to put his license at risk. I'd want to know that my potential lost income is covered.
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very true! In this case he took over the entire company so he did benefit from it, at least in terms of customer base. Thanks!
 
To update, I was successful in reaching out to someone in the ECRIC, and I'm waiting for his response. Will let y'all know! Thanks
 
If the company structure was an LLC, the individual members would have great liability isolation. Of course I don't know if that was the case or not.

Granted I am not a lawyer so anything I say on this topic is in the category of "some random dude on the internet who doesn't know what he's talking about" but I am skeptical one can be held liable or sign to take on liability of something they had nothing to do with.
 
electrofelon said:
If the company structure was an LLC, the individual members would have great liability isolation. Of course I don't know if that was the case or not.

Granted I am not a lawyer so anything I say on this topic is in the category of "some random dude on the internet who doesn't know what he's talking about" but I am skeptical one can be held liable or sign to take on liability of something they had nothing to do with.
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I'm not sure either, but I do love your self imposed title of "some random dude........." 😂😂 how many letters do you think you could attach to the end of your name for that?

It would be interesting to know though, if he would still be liable just because he's signed, even if they weren't allowed to make him sign in the first place.
 
MGest said:
It would be interesting to know though, if he would still be liable just because he's signed, even if they weren't allowed to make him sign in the first place.
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I don't think so. In general I don't think you can sign away rights or agree to something that wasn't legal in the first place but sign and then be stuck with it. It is my understanding this is one big way liability waivers are shot down is if the party is found to have committed gross negligence. According to a lawyer friend of mine, it's a matter of public policy that a person can't waive gross negligence.
 
MGest said:
Very interesting... Thank you very much for all this info. You guys have been very helpful!
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The bottom line here is that your friend needs to spend some money on a lawyer who knows his way around the contracting business. Nothing we say here really matters because we have only a vague clue as to the actual facts involved and no legal expertise.

I find it hard to believe that anyone is dumb enough to buy an existing business without appropriate legal advice in the first place.
 
petersonra said:
The bottom line here is that your friend needs to spend some money on a lawyer who knows his way around the contracting business. Nothing we say here really matters because we have only a vague clue as to the actual facts involved and no legal expertise.

I find it hard to believe that anyone is dumb enough to buy an existing business without appropriate legal advice in the first place.
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It isn't just the open jobs that need to be covered. My FIL worked for McBride, a huge mechanical contractor in the Northeast. They calculated each year how much insurance coverage they thought they'd need for completed jobs. They'd go back up to 10 years, depending on the size of the job.
 
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