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. What happens when the specifications are defective? Who is responsible? That’s where the Spearin Doctrine comes in.
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When the Plans or Specs are Defective, Who’s Responsible?
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.
What is the Spearin Doctrine?
The Spearin Doctrine is named after the 1918 Supreme Court decision. It sounds fancy, but basically, it’s an implied warranty that the plans and specifications included in the contract documents are (1) accurate, and (2) if the plans are followed, they will result in suitable or at least acceptable work.
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.
Is the Spearin Doctrine a Claim or a Defense?
In construction, the Spearin doctrine can operate in two different ways: as a sword or a shield.
A contractor can use this doctrine offensively (as a sword). Meaning, where a contractor experiences damages due to defective plans, the contractor may have grounds for making a claim based on the Spearin Doctrine. They’d 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). When an owner claims 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.
Prescriptive vs. Performance Specifications
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.
Why does this distinction matter? Liability.
Generally speaking, the implied warranty of specifications (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 the contractor has the freedom to decide how to perform the work, they will be liable for potential defects in the specs.
On Design-Build Projects, the Spearin Doctrine Might not Apply to Prime Contractors
How to Prove a Claim Under the Spearin Doctrine
Once it’s clear that the defective specifications are due to design issues, its 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.
Elements to Prove
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.
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.
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.
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.
It’s Possible to Waive Liability for Specs in the Contract
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: “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.
Report Design Issues Early to Avoid it Altogether
The Spearin doctrine is meant to protect contractors from defective work claims even when they follow the plans and specs provided by their customer. 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. Communicating early and often sets the tone for a collaborative project, and is a great way to avoid needless disputes.