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Courts Take Another Swipe at the Implied Warranty of the Plans and Specifications

Date: December 8, 2016  /  Author: John P. Ahlers  /  Categories: Government Contracts, Contracting, Construction News and Notes, Memorable Quotes, Rants and Raves, Damages, Construction Defect  /  Keywords: Courts Take Another Swipe at the Implied Warranty of the Plans and Specifications 1  /  Comments (0)

Implied warranties are warranties created by law, legislation, or courts.  In the construction industry, one of the most prominent implied warranties is that owners who provide plans and specifications to their contractors impliedly warrant the adequacy of their plans and specifications.[i]  That implied warranty had its beginning in the 1918 US Supreme Court decision of U.S. v. Spearin[ii] and is, therefore, popularly known as the Spearin Doctrine.  Under the Spearin Doctrine, if the contractor completes the work in accordance with the owner’s plans and specifications, but there is a deficiency or failure, the owner, not the contractor, is responsible.  When the owner breaches its implied warranty, in most instances, the contractor is entitled to additional compensation for extra work performed, delays experienced, and other additional expense or loss occasioned by the warranty breach.  A recent case demonstrates that this implied warranty is not “immunity.”  The contractor must still act reasonably and diligently, particularly when the contract provisions so require.