Texas courts generally apply the Spearin doctrine that the owner implicitly warrants to the contractor the sufficiency of the drawings and specifications. See Shintech Inc. v. Group Constructors, Inc., 688 S.W.2d 144, 151 (Tex. App.—Houston [14th Dist.] 1985, no writ); see generally United States v. Spearin, 248 U.S. 132, 39 S. Ct. 59, 63 L. Ed. 166 (1918).

What Happened?

A contractor agreed, for a lump sum, to build a dry-dock in a Navy Yard in accordance with plans and specifications prepared by the Government and which provided, incidentally, for reconstructing a sewer which intersected the site. See Spearin, 248 U.S. 132 at 133. The plans also prescribed the new location, dimensions, and materials. Id.  The contractor rebuilt the sewer to the correct specifications, and it was accepted by the Government. See Id.   However, due to a dam in a connecting sewer, within the Yard but beyond the limits of the operations, and also due to the general conditions of drainage, which were known to the Government but not to the contractor, back waters burst the new sewer, during heavy rain and high tide, and flooded the dry-dock excavation, causing damage and impeding the work. See Id.

The contractor, declined to proceed unless the Government paid or assumed the damage and made the sewer safe or assumed responsibility for future damage due to insufficient capacity, location and design. Id.  The Government annulled the contract. Id. The contractor brought a suit to recover the amount that he spent on the project and to recover damages for the contract’s annulment. Id.

The Law

The United States Supreme Court affirmed the lower court’s ruling for the contractor. See Id. at 132.  The Court stated that the drawings and specifications, prescribing the character, dimensions, and location of the sewer imported a warranty that if constructed in compliance with the drawings, the sewer would prove adequate. Id. at 133. The Court explained that the warranty was not overcome by general clauses requiring the contractor to examine the site, check-up the plans, and assume responsibility for the work until completion and acceptance. Id.

What It Means For You

According to this archaic case from 1918, there is an implied warranty that if a contractor constructs a project to the specifications of the owner, the completed project will prove to be adequate. If this is not the case, the contractor may quit the job and recover costs. Of course, nearly 100 years later, a standard AIA contract has all but completely negated this doctrine with various clauses. However, it is good to know that some measure of protection is afforded to contractors through decades of precedent.

Nothing here is intended to be legal advice nor should it be construed as such. If you have questions or would like to discuss an issue with your company, please call 832-930-0529 or visit http://www.kestephenslaw.com.

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