The Spearin Doctrine in the Evolving Construction Industry

By Melinda S. Gentile and Margaret A. Bettenhausen

The authors discuss the ways in which new project-delivery methods, such as BIM, are impacting the constructability doctrine.

Ninety years ago, the U.S. Supreme Court created a doctrine whereby an owner impliedly warrants the plans and specifications which an owner provides to a general contractor. The Spearin Doctrine (the “Doctrine”), a.k.a. the owner’s implied warranty or the constructability doctrine, holds that a contractor will not be liable to the owner for loss or damage which results solely from insufficiencies or defects in such plans and specifications.

Melinda S. Gentile

In Spearin, the Court first acknowledged the general rule of law that, “[w]here one agrees to do, for a fixed sum, a thing possible to be performed, he will not be excused or become entitled to additional compensation, because unforeseen difficulties are encountered.” Thus, the Court recognized that the initial risk of completing projects in accordance with plans and specifications, regardless of the obstacles it encounters, lies with the contractor.

However, the Court then effectively shifted that risk by holding that where a contractor “is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible for the consequences of defects in the plans and specifications.”

Accordingly, an owner impliedly warrants that its plans and specifications are free of defects. The significance of Spearin is that the risk of constructability under owner-prepared plans and specifications now lies with the owner.

The doctrine was specifically intended to recognize that the owner had a duty to provide accurate plans and specifications that, if followed by the contractor, would have the intended result. The construction industry, however, has evolved considerably since the Spearin case.

There are now many alternatives to the traditional design-bid-build project delivery method. Perhaps most significantly, the use of building information modeling (BIM) on construction projects is growing rapidly. BIM is utilized to bridge the information loss associated with handing a project from design team, to construction team and to building owner/operator, by allowing each group to add to and reference back to all information they acquire during their period of contribution to the BIM model.

While BIM enables users to exchange data and work from a single integrated model, users have not established from either a legal or practical standpoint who owns the information model. Accordingly, such shared-design projects pose a new challenge as to allocating risk among the participants.

This is especially true where the typical separation between the design and build participants begins to blur and contractors are more involved in design. Although architects have not been at the forefront of the BIM movement, they are now pushing to control the information model. If they are successful, it is likely the doctrine will continue to apply to BIM projects in a similar fashion as it currently applies to design-bid-build projects and owners would still impliedly warrant the plans and specifications.

However, in the event that contractors continue to win more control and ownership over the information model, the process becomes more of a shared-design, or even a design-build model. With design-build, where the same entity designs the project as builds it, logically the owner cannot be held liable. However, if the contractor is not the sole designer of the project, the allocation of risk becomes trickier.

Where a contractor designs some, but not all of a project, a possible solution would be to include a contract provision that excludes from the contractor’s warranty any part of the project the contractor does not specifically design.

Since the construction industry is in the early stages of BIM and shared-design acceptance and implementation, it will be some time before contract practices and case law catch up with the industry. In the meantime, it is plausible the courts will continue to look to the nature of the underlying contracts – who is responsible for the design.

Melinda Gentile is a partner in the Fort Lauderdale office of Peckar & Abramson. She can be reached at mgentile@pecklaw.com. Margaret Bettenhausen is an associate in the Fort Lauderdale office, and can be reached at mbettenhausen@pecklaw.com.