United States: The Spearin Doctrine Cont’d: Some Important Nuances And Exceptions

Last month, we discussed the Spearin doctrine, which establishes that a project owner impliedly warrants that plans and design specifications will be adequate if the owner issues and the contractor complies with the plans and specifications.1 As a result, a contractor can use the Spearin doctrine defensively to avoid the consequences of defective plans and specifications or offensively to bring a claim if the defective plans and specifications cause its work to be more expensive, timely, or difficult. The Spearin doctrine's applicability and longevity have spawned a number of nuances and exceptions, some of which we discuss in this month's article.

Since the Spearin doctrine's birth in 1918, the scope of the doctrine has been the subject of many important legal decisions that continue to define its use. Under the modern rule, for example, the Spearin doctrine cannot be invoked by a contractor if (1) the construction contract contains an enforceable avoidance clause; (2) the contractor did not reasonably rely on the defective plans and specifications; or (3) the defects in the plans and specifications were small and not sufficiently fundamental to the completion of the project.2

Avoidance Clauses

Express contract terms trump implied contract duties. As a result, the law allows owners to both shift the consequences of an inadequate design to contractors and avoid liability for design defects under the Spearin doctrine through disclaimers, waivers, exculpatory, or other types of avoidance clauses. The effect is to expand the contractor's warranty beyond conformance to the plans and specifications to warranting that the work will be fit for its intended purpose, even if the plans and specifications contain defects.

In Spearin, the Supreme Court of the United States held that "[t]his implied warranty [of the adequacy of the plans and specifications] is not overcome by the general clauses requiring the contractor to examine the site, to check up the plans, and to assume the responsibility for the work until completion and acceptance." U.S. v Spearin, 248 U.S. at 137 (emphasis added). The court's reference to "general clauses" suggested that specific clauses could serve to shift the design responsibility to the contractor. Indeed, courts will enforce specific contract terms that shift the consequences and risk of design defects to contractors if the terms are clear and unambiguous.

Some avoidance clauses expressly disclaim the owner's responsibility for the accuracy of owner supplied information. For example, the court in McDevitt v. Marriott3 upheld a contract provision expressing disclaiming "any responsibility [of the owner] for the data [in a soil report] as being representative of the conditions and materials which may be encountered."

Other types of avoidance clauses may be more subtle. For instance, a contract term that obligates the contractor to verify the specifications for accuracy and completeness may pass the risk of defects in the specifications to the contractor.

Clarity and lack of ambiguity are critical to enforcement of avoidance clauses. Common general clauses will not usually shift the consequences and risk of design defects to the contractor. For example, a clause stating that the actual conditions may be different than those shown on the plans and specifications will typically not overcome a Spearin claim. Yet courts will enforce an avoidance clause requiring the contractor to verify specific representations, such as the suitability of soil in soils reports or estimated quantities.

The line between a general and a specific clause also varies depending on whether federal or state law applies and, more specifically, which state law applies, as a contractor in Ohio recently discovered in the Dugan & Meyers Construction Co. v. Ohio Dept. of Administrative Services4 case. In Dugan & Meyers, the Ohio Supreme Court denied the contractor's Spearin claim despite evidence of the inadequacy of the plans and specifications that included untimely owner responses to 700 RFIs, 250 field work orders, and 85 ASIs because the contract's "no-damages-for-delay" clause limited the contractor's damages to the remedy specified in the contract – an extension of time.

Practically every contractor association in the State of Ohio filed "friend of the court" briefs urging against the holding in Dugan & Meyers. In a strong dissenting opinion, Justice Pfeifer noted "[t]he majority seems to suggest that an owner need not be concerned with preparing accurate plans, since any deficiencies must be corrected by the contractor. As it turns out, the State could have saved a lot of money on blueprints and just submitted some sketches on the backs of a few cocktail napkins." While Ohio's decision to severely limit the scope of Spearin does not appear to be a nationwide trend5, it still provides a warning that the terms of the contract could make a difference to a contractor's right to invoke Spearin.

Reasonable Reliance

Another limitation on a contractor's right to invoke the Spearin doctrine is the requirement that a contractor demonstrate reasonable reliance on the plans and specifications. A contractor's reliance on the plans and specifications is not reasonable when it has prior knowledge of the defects or it fails to comply with the plans and specifications.

Similarly, a contractor's reliance upon the plans and specifications is not reasonable if the design defect was so "glaring or obvious" that an ordinary contractor would have found it during bid preparation or before performance. In fact, a contractor has an implied duty to seek clarification of any such patent ambiguity before submitting its bid or beginning performance.6

Nor is reliance reasonable if the contractor discovered or should have discovered a defect in the plans and specifications during its site inspection. Failing to conduct a pre-bid site inspection will preclude a contractor from reasonably relying on defects in the plans and specifications that an ordinary contractor have discovered had it conducted the reasonable site inspection.7

Requirement for Fundamental Design Defect

Design defects must be fundamental to result in a breach of the implied warranty of the adequacy of the plans and specifications. The fact that drawings require repeated clarification is not necessarily an indication that the drawings are defective.8 Rather, it has been said that "the [owner's] documents must be substantially deficient or unworkable in order to be considered a breach of the contract. If there are many errors or omissions in the specifications, the [owner] breached the contract if the cumulative effect or extent of these errors was either unreasonable or abnormal taking into account the scope and complexity of the project. . . . To prove that the plans [are] defective, it [must be shown] that the plans were unworkable."9

Whether plans and specifications contain fundamental defects is normally determined by the result. If a contractor carefully follows plans and specifications (with no patent ambiguities) and the contract item is deficient or fails to perform as required, then the owner will normally be held not to have met its duty under Spearin.10

In sum, while the Spearin doctrine protects contractors from the consequences of complying with defective plans and specifications, a prudent contractor should be aware of the limitations of the Spearin doctrine, or it may find itself assuming responsibility for a defective design.

Footnotes

[1] Similarly, a contractor impliedly warrants that plans and design specifications will be adequate if the contractor issues and a subcontractor reasonably relies upon the plans and specifications. Ironically, design professionals do not impliedly warrant the adequacy of their designs in most states.

[2] The modern Spearin doctrine includes another important nuance – it assigns responsibility for defective specifications to the owner or contractor according to whether the specification is deemed a "design specification" or "performance specification." The distinction between design specifications and performance specifications is an important issue that will be addressed in a future article.

[3] 713 F. Supp. 906 (E.D. Va. 1989), aff'd in part, rev'd in part on other grounds, 911 F.2d 723 (4th Cir. 1990).

[4] 113 Ohio St. 3d 226, 864 N.E.2d 68 (2007).

[5] Another example of Ohio's limited view of Spearin is that Ohio apparently limits the doctrine's applicability to public projects. See Thomas & Marker v. Wal-Mart, 2008 U.S. Dist. LEXIS 79072 (refusing to extend the Spearin doctrine to private projects). While the Spearin doctrine has been adopted by most jurisdictions, there remain some states, such as Pennsylvania, that have refused to apply it. See Stabler Constr., Inc. v. Comm. Of Pennsylvania, 692 A.2d 1150, 1153 (Pa. 1997).

[6] See, e.g., Graham Constr. Co., Inc. v. Earl, 362 Ark. 220 (2005).

[7] See, e.g., Stuyvesant Dredging Co. v. United States, 834 F.2d 1576 (Fed. Cir. 1987); Johnson Controls, Inc. v. United States, 671 F.2d 1312 (Ct. Cl. 1982); Allied Contractors, Inc. v. United States, 381 F.2d 995 (Ct. Cl. 1967).

[8] Caddell Constr. Co., Inc. v. United States, 78 Fed. Cl. 406 (2007).

[9] Id. at 413-415.

[10] See, e.g., John McShain, Inc. v. United States, 412 F.2d 1281(Ct. Cl. 1969) (finding that "although plans need not be perfect, they must be adequate for the task or reasonably accurate").

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions