Advising on the contract structure and local licensing rules for a U.S. architectural design project

For a Korean architectural design firm working on a project in Texas, we reviewed the legal risks of the design services agreement to be signed with the project owner and the structure for performing the work between the Korean headquarters and its U.S. local entity.

With the Korean headquarters as the contracting party and the U.S. local entity performing the design work, the key issues were compliance with Texas architect licensing rules and the allocation of contractual responsibility.

Another issue was the effectiveness of the clause choosing Korean law as the governing law and providing for international arbitration in Seoul, and whether an arbitral award could be enforced in the United States.

We reviewed the contract terms based on the AIA forms, the standard contract documents for U.S. architectural design, and separated the roles and responsibilities of the Korean headquarters and the local entity in line with Texas licensing rules.

We also analyzed the Korean Commercial Arbitration Board (KCAB) international arbitration clause and the enforceability of an arbitral award in the United States, and prepared a revised draft of the contract, including an added clause making clear that mandatory local laws apply.

We clarified the contractual roles and responsibilities so that the U.S. local entity could lawfully perform the design work while the Korean headquarters retained its contractual responsibility.

We also sorted out the relationship between mandatory local laws and the international arbitration clause, reflected the related revisions in the contract, and proposed contract terms to reduce legal risk.

Related U.S. practices: Contracts & Business Transactions, Corporate & Business Advisory