Chapter 18 - § 18.9 • WARRANTY
| Jurisdiction | Colorado |
Claims premised upon breach of warranty are a specific type of breach of contract claim since such claims are created or arise as a result of an agreement between the parties.136
A warranty may be express or implied. An express warranty is the specific written or oral representation which distributes the risk of specified defects or failures between parties to an agreement. An implied warranty is the guarantee of one party against failure or defect in a product or transaction which is imposed on that party by operation of law or which is inferred from the actions of the parties.137
In the construction context, the parties often include express warranties in their contracts. For instance, pursuant to § 3.5 of AIA Document A201-2017, General Conditions of the Contract for Construction, the contractor generally warrants "that materials and equipment . . . will be of good quality and new . . . [and] that the Work will conform to the requirements of the Contract Documents and will be free from defects."138 Other warranties are implied by operation of law. The nature of any implied warranties is often dependent on whether the project is commercial or whether a new home is involved. This section will address primarily implied warranties, as there are few reported construction cases that address express warranties and because resolution of express warranty claims is wholly dependent upon the contract warranty language in question.139
§ 18.9.1-Owners' Warranties
An owner provides certain warranties when it enters into a construction contract. If an owner provides materials and equipment to a contractor it impliedly warrants that the materials and equipment are suitable for their intended use.140 An owner also impliedly warrants that it has the financial capability to meet its obligations under the construction contract.141
The most frequently litigated warranty provided by an owner is known as the Spearin doctrine, which has been recognized in Colorado.142 Under the Spearin doctrine, which name is derived from the first case that recognized this warranty, an owner impliedly warrants (1) that the site is as the owner states, and (2) the sufficiency of the plans and specifications - i.e., that the contractor can complete its work satisfactorily if it follows the plans and specifications.143 Thus, if the plans and specifications are defective, the contractor is not liable to the owner.144
§ 18.9.2-Design Professionals' Warranties
Absent an express warranty, design professionals do not impliedly warrant their services.145 In Samuelson v. Douthirt,146 the Colorado Supreme Court first enunciated the rule that those who sell their services do not impliedly warrant them:
The services of experts are sought because of their special skill. They have a duty to exercise the ordinary skill and competence of members of their profession, and a failure to discharge that duty will subject them to liability for negligence. Those who hire such persons are not justified in expecting infallibility, but can expect only reasonable care and competence. They purchase service, not insurance.147
This rule was later applied in Johnson-Voiland-Archuleta, Inc. v. Roark Associates,148 where the court of appeals determined that judgment was properly entered against an owner who claimed that the plaintiff engineering firm impliedly warranted that its plans were fit for their intended use. Therefore, while an owner impliedly warrants the sufficiency of the plans and specifications to its contractor, the design professional who provides the plans and specifications does not.149 Rather, the design professional's liability must be based on some other theory, in contract or tort.
According to the Bylaws and Rules of the Colorado State Board of Licensure for Architects, Professional Engineers and Professional Land Surveyors, an engineer's or land surveyor's certification is "not a guaranty or warranty, either expressed or implied."150
§ 18.9.3-Contractors' Warranties
Public Works and Commercial Construction
While a number of implied warranties arise where new home construction is involved, when the project is for a governmental entity or is commercial in nature, there generally are no implied warranties. In Town of Alma v. AZCO Construction, Inc.,151 the court of appeals affirmed the dismissal of a claim against a contractor on a public works project that the contractor had breached an "implied warranty of sound workmanship." In doing so, the court specifically refused to extend the implied warranty of habitability that applies to private home sales contracts.152 In spite of the Town of Alma decision, which stated that no authority existed for an implied warranty outside the home construction context, it appears that at least one appellate court in Colorado has tacitly recognized an implied warranty of good construction in a commercial setting. In Worthen Bank & Trust Co. v. Silvercool Service Co.,153 the owner asserted that the defendant's construction of a roof was defective. The trial court found the roof had been negligently constructed and that the contractor had breached the implied warranty of good...
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