Contractors and subs are obligated to perform according to their contract specifications and plans. These plans and specs are rarely perfect, but they should at least be adequate to achieve the desired result. But what happens when the specifications are defective? Who is responsible? That’s where the Spearin Doctrine comes in.
Knowledge of the Spearin Doctrine is one of the most important tools a contractor can have. Let’s look at what the Spearin Doctrine is, where it applies, how it can affect your liability — and how to prove a claim.
What is the Spearin Doctrine?
The Spearin Doctrine, named after the 1918 Supreme Court decision, is an implied warranty that any plans and specifications included in the contract documents are accurate and, if those plans are followed, they will result in suitable (or at least acceptable) work.
The Spearin Doctrine is meant to protect contractors from defective work claims, even when they follow the plans and specs provided by their customer.
Construction specifications and plans are presumed to be accurate, often called an “implied warranty of specifications.” The general accuracy is assumed to be present in every set of specs and plans. This implied warranty is often referred to as the Spearin Doctrine.
There are a variety of different reasons that specifications can be defective. But generally, the warranty protects against the failure to meet an expected standard of care. Defects could be the result of errors, omissions, incomplete plans, or merely insufficient details. Whatever the case may be, liability may arise for damages caused by defective specifications.
How is the Spearin Doctrine used in construction?
In construction, the Spearin doctrine can operate in two different ways: as a sword or as a shield.
A contractor can use this doctrine offensively (as a sword). When a contractor experiences damages due to defective plans, the contractor may have grounds for making a claim based on the Spearin Doctrine. They have to show that the faulty plans adversely affected their time, costs, or made performance more difficult.
Conversely, this doctrine can also be used defensively (as a shield). An owner may claim that their contractor’s workmanship is defective. If the issue was caused by something in the plans or specs, a contractor could avoid potential liability using the Spearin Doctrine. Of course, if unrelated to spec defects, the contractor is still liable for their workmanship.
When does the Spearin Doctrine apply?
Courts have made an important distinction between the two types of specifications that can be included in the contract: prescriptive specifications and performance specifications.
Prescriptive specs are detailed descriptions of the kind of materials to be used, and how to perform the work.
On the other hand, performance specs take a hands-off approach. Performance specifications only provide the desired result, and the implementation details are left to the contractor.
This distinction matters because it affects liability.
Generally speaking, the implied warranty of specifications (the Spearin Doctrine) only applies to prescriptive specs, not performance specs. It makes sense — prescriptive specs are relied upon by the contractor, and if those specifications are flawed, it shouldn’t really be the contractor’s fault.
With performance specs, the customer relies on the contractor to determine the best method of performance. So, if they have the freedom to decide how to perform the work, the contractor will be liable for potential defects in the specs.
How to make a claim under the Spearin Doctrine: 4 things contractors must prove
Once it’s clear that the defective specifications are due to design issues, it’s time to see if the contractor has a valid claim.
To prevail on a claim under the Spearin Doctrine, the contractor must prove the following elements.
1. Reliance on defective specifications
First, the contractor must reasonably rely on the defective specifications. This means that the contractor should perform some sort of due diligence before bidding or starting performance. Conducting site investigations and clarifying any discovered ambiguities is a good way to start.
2. Increased costs
Next, the contractor must have sustained some increased costs. These could be performance costs, or extra time needed to finish the work.
In a situation where a claim is made against a contractor for defective work, the cost of dealing with that claim could count as increased costs, as well.
3. Knowledge of the defects
Third, the contractor should not have any active or constructive knowledge of the defective specs. Constructive knowledge means that the contractor should have known about the defect.
Therefore, if the defect is so glaring or apparent that an ordinary contractor would have caught it, then they will not be relieved of liability.
4. Unilateral performance
Lastly, the contractor shouldn’t unilaterally perform, knowing the existence of the defect. This last element is a protection for the owner against contractors who could blindly follow faulty specifications, then make a claim for more money later on.
Keep an eye out for liability waivers for contract specs
A fundamental aspect of contract law is that express contract terms can defeat implied duties. As a result, many contracts will include some form of waiver, disclaimer, or avoidance clause to shift the risk back to the contractor. Contractors should keep an eye out for this type of language.
Sometimes it’s obvious. Consider this example clause: “Owner disclaims any responsibility for the plans and specifications as being representative of the conditions and materials which may be encountered.“
Other times, this can be accomplished with a more subtle approach: “Contractor is responsible for verifying the plans and specifications for accuracy and completeness, and if a defect is discovered, the contractor is obligated to inform the owner.”
This clause could also shift the risk of defective specs to the contractor.
Notice design issues? Report them early
Absent some avoidance clause (like the ones described above), contractors can reasonably rely on the adequacy of the project plans and specs, and thereby rely on the Spearin Doctrine as a backup.
Smart contractors should be aware of these limitations, or they may find themselves paying for someone else’s mistakes! Avoiding the problem of faulty project specs is obviously preferable, so it’s a good idea to review the specifications in-detail before work even begins.
If the issue is hard to spot, or if it doesn’t pop up until after work begins, communicating concerns to whoever is in charge of project specs will go a long way toward avoiding potential issues.
If you notice any jobsite conditions that are different than those in the contract, let your hiring party know. Communicating early and often sets the tone for a collaborative project, and is a great way to avoid needless disputes.