Who Is Responsible for Bad Plans and Specifications?

An owner provides you with plans and specifications for a project and you construct it in strict conformance with them.  Subsequent to the project’s completion, it is determined that what you built is not suitable for its intended purpose.  Who “owns” this problem?This legal issue was addressed by the United States Supreme Court in 1918, and its decision has become commonly known in construction law as the “Spearin Doctrine.”  This doctrine holds that an owner, who promulgates plans and specifications to a contractor, impliedly warrants their sufficiency for their intended purpose.  In other words, when an owner issues plans and specifications, he warrants that the contractor should be able to rely upon them to build the project to a satisfactory result.

In Spearin, the contractor entered into a contract with the United States to build a dry dock in a New York Navy Yard.  In order to use the site specified, the plans required the contractor to relocate a brick sewer which was on site.  The plans and specifications were provided by the project owner, the United States.  The contractor built the project according to the plans and specifications, and the dry dock was approved and accepted by the owner.  Approximately a year after the project was completed, the relocated sewer backed up resulting in flooding into the dry dock area.  The court determined that a dam that was not shown on the owner’s plans and specifications had failed and that this caused the flooding and, accordingly, the contractor was not at fault. 

In rendering its decision, the Spearin Court held that by issuing the plans and specifications, the owner had impliedly warranted to the contractor that if it complied with them, the relocated sewer would be adequate to service the dry dock area.  It further reasoned that this implied warranty could not be defeated by a contract clause requiring the contractor to examine the site, plans and specifications prior to entering into the contract and performing the work. 

In any Spearin situation, a contractor should promptly notify the owner of its claim(s) that the plans and specifications are defective in order to avoid any later defense by the owner that those rights were “waived”.  The contractor then has two bites at the “claim apple:”   

1. It can assert a claim that the owner breached its implied warranty that the plans and specifications are accurate.   
2. It can assert that the plans and specifications when strictly complied with, did not result in a finished product suitable for its intended purpose. 

The contractor can seek compensation for any added expense it incurred as a result of the insufficient and/or inadequate plans and specifications issued by the owner. 

It is important to note that while the “Spearin Doctrine” is followed by a majority of states, it is not universally applicable, and accordingly, you should inquire of your legal counsel as to whether, in the state that you are working, an owner is bound to impliedly warrant the plans and specifications it issues.

Construction Business Owner, December 2007