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A project is complete and everyone is happy, until a latent structural defect is suddenly noticed. The owner calls on the general contractor to fix it. The general contractor calls on the subcontractor to address the problem. Everyone points fingers, but disclaims responsibility. “But I built it according to the plans and specifications that were given to me”. “Flawed design”, a phrase that strikes fear into the heart of any architect, engineer, or owner that bid the project out using the plans. This article discusses the obligations of each party on a project relating to design errors, as well as burden shifting contract clauses that are sometimes invoked to shift responsibility.
Engineers and architects have an obligation to design in accordance with a reasonable standard of care, in the time and place of the project. But we all recognize the complexity of today’s structures. Even with CAD programs, often there are inconsistencies, omissions, or ambiguities within a set of plans and specifications. Plans and specifications are rarely perfect.
An owner also impliedly warrants the adequacy of the plans and specifications. This is sometimes known as the “Spearin Doctrine,” after the seminal Supreme Court case, US. v. Spearin, 248 U.S. 132 (1918). The Spearin Doctrine has been faithfully followed in the North Carolina courts for nearly a century. One state court held that it is simply unfair to bar recovery to contractors who are mislead by inaccurate plans and submit bids lower than they might otherwise have submitted. This responsibility of the owner is not overcome by clauses requiring builders to visit the site, to check the plans, and to inform themselves of the requirements of the work. Courts have held the duty to check plans does not impose the obligation to pass upon their adequacy.
That is not to say the contractor or subcontractor holds no duties relating to proper construction techniques and code compliance. While the contractor is not responsible for design errors, he does have a duty to report any design errors or omissions which he discovers during his review of the plans. If he discovers any design errors, he must timely report them to the owner.
Clever owners and architects have devised burden shifting clauses that can successfully shift the burden downstream in the contractual chain. Through the use of disclaimers, which deny responsibility for the constructability of all design, owners and professional designers are passing the buck. Disclaimers might deal with a specific aspect of the design or site conditions, or they might apply to the entire design, as in a general disclaimer that the plans and specifications may not comply with local building codes.
Aside from burden shifting clauses, the architect or engineer is ultimately responsible for design errors. All parties play a role in identifying and minimizing the effect of such errors through prompt notification. Pay particular attention to the terms of the contract before the project begins, as construction defect claims are one of the fastest growing areas of construction litigation and potentially crippling liability for contractors.
– Paul A. Sheridan