Section 1.8 Owner’s Implied Warranty for Plans and Specifications: The Spearin Doctrine

• Library: Construction Law 2016 Supp

E. (§1.8) Owner’s Implied Warranty for Plans and Specifications: The Spearin Doctrine

In 1918, the United States Supreme Court handed down what has become, in the construction industry, a landmark case. United States v. Spearin, 248 U.S. 132 (1918). In Spearin the Supreme Court held that a project owner extends an implied warranty to the contractor that the plans and specifications are accurate and complete and, if followed faithfully, will produce the desired result. By following the owner’s plans and specifications, the contractor will not be responsible for the consequences of defects in the plans and specifications. Moreover, the owner cannot contract away this responsibility by reliance on usual contract clauses requiring contractors to visit the site, check the plans, and inform themselves of the requirements of the work.

In Spearin, 248 U.S. 132, the government awarded a contract to George B. Spearin to build a dry dock in accordance with a set of plans and specifications for a fixed price. Construction of the dry dock necessitated relocation of a section of six-foot sewer. The plans indicated the new route for the replacement section of the sewer.

The replacement sewer proved inadequate to carry off the volume of storm water, and it broke because of internal pressure. Ultimately, the Supreme Court was called on to decide the government’s claim that Spearin was responsible for the problem.

The Supreme Court ruled that, by following the government’s plans and specifications, “the contractor will not be responsible for the consequences of defects in the plans and specifications.” Id. at 136.

Even though the construction industry has shifted into fast-track construction projects where detailed design documents may not even be completed at the time of the awarding of the contract, the Spearin, 248 U.S. 132, doctrine still stands. In a design-build contract, the owner provides the contractor with facility requirements, design standards, and performance parameters. The contractor, not the owner, will then typically hire an architect/engineer to prepare the detailed design documents.

In today’s industry, distinctions must be made between design specifications and performance specifications. Design specifications explicitly state how the contract is to be performed, and they permit no deviation. On the other hand, performance specifications specify the results to be obtained and leave it to the contractor to determine how to achieve those results. Stuyvesant Dredging Co. v. United States, 834 F.2d 1576, 1582 (Fed. Cir. 1987).

A good example of the design versus performance dichotomy is presented by a New York case involving Fruin-Colnon Corporation. Fruin-Colnon Corp. v. Niagara Frontier Transp. Auth., 585 N.Y.S.2d 248 (N.Y. App. Div. 1992). In this case, the contractor was not liable for failing to achieve a watertight tunnel because the contract contained design specifications instead of performance specifications. After the government terminated the contract, the contractor brought suit to recover for the remedial grouting efforts it undertook to make the tunnel watertight. The government counterclaimed to recover payments it made to third parties for remedial waterproofing plus liquidated damages. The trial and appellate courts in New York held in favor of the contractor, concluding that the contract documents contained design specifications. The contract documents required Fruin-Colnon to construct an unreinforced, cast-in-place, concrete liner of precise dimension using a particular type and mix of concrete. The government also specified detailed requirements for placing, curing, protecting, and finishing the concrete. The contractor had no discretion to deviate from those specifications for any purpose.

Contractors can successfully use the Spearin, 248 U.S. 132, concept when the owner uses a proprietary specification calling for the contractor to furnish equipment or material produced by a particular manufacturer. This type of specification will typically refer to the product by brand name and model number. A good example is Trustees of Indiana University v. Aetna Casualty & Surety Co., 920 F.2d 429 (7^th Cir. 1990). In this case, the University specified the exterior facing brick the contractor...