Thursday, July 19, 2012

Building What's Designed Is In Your Contract - But So Is Pointing Out Design Errors

A basic principle of construction law is the Spearin doctrine: a 1918 United States Supreme Court decision which remains as one of the landmark construction law cases. The Spearin doctrine, set forth in United States v. Spearin (248 U.S. 132), generally stands for the proposition that an owner impliedly warrants the information, plans and specifications which an owner provides to a contractor. As such, the contractor's liability may be limited if loss or damage occurs solely from insufficiencies or defects in such information, plans and specifications. Conversely, contractors are bound to build according to the plans and specifications, and deviations from the plans and specifications may result in liability even when no defects in the work are present. When the government contracts for supplies to be manufactured or a building constructed in accordance with the government design specifications, there is an implied warranty that if the specifications are followed, a satisfactory product will result.

An important part of the Spearin doctrine relates to damages that are due to the contract if the warranty is breached, i.e., the specifications are defective. In that case, the contractor is entitled to damages equal to the amount reasonably expended in trying to comply with the defective specifications.

However, such liability will only attach if the contractor relies on government “design specifications” and not merely “performance specifications.” Government specifications are considered “design specifications” where (1) the government sets forth in precise detail the materials to be employed and the manner in which the work is to be performed and (2) the contractor is not permitted to deviate from those specifications. (This would generally not apply then to the increasing use of design build project, where the contractor is heavily involved in the design and value engineering of projects). Examples of design specifications include detailed measurements, tolerances, materials, and elaborate instructions on how to perform the contract. By contrast, performance specifications merely set forth an objective to be achieved, and the successful bidder is expected to exercise its ingenuity in selecting the means to achieve that objective.

If a contractor complies with the government’s defective design specifications, the contractor should not be found liable for any ensuing loss arising from those defective specifications and should be able to recover damages equal to the amount expended in trying to comply with the defective specifications.

1 comment:

  1. It is necessary to get the information and updates for any construction work regarding its quality and always choose the legal and professional contractor who can take the risk if any damage happens. Visit on the top notch contractor for San Antonio commercial foundation installation work.

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