Builders and Contractors Exchange
Weekly Bulletin: 28 sept 2007
The Spearin Doctrine – Another Lesson In Making Sure To Read The Contract
The Spearin Doctrine evolved out of the decision by the United States Supreme Court in United States v. Spearin, 248 U.S 132, 39 S.Ct. 59 (1918.) In that case the Court affirmed and awarded damages to a contractor compensating him for delays experienced during the construction of a dry-dock at the Brooklyn Navy Yard. Part of the contract prescribed separate requirements for the sewer diversion and relocation. Even though the contractor followed all the plans and specifications, the sewer broke in several places. The Court held that as a general rule the contractor will not be responsible for defects in plans and specifications furnished by the owner. In other words, an owner warrants that the plans and specifications are accurate and if damages occur as a result of faulty plans and specifications an owner may be liable to the contractor for any resulting damages. Moreover, the Court held that “this responsibility of the owner is not overcome by the usual clauses requiring builders to visit the site, to check the plans, and to inform themselves of the requirements of the work.”
The Spearin Doctrine has been followed by Virginia courts for many years. See e.g. Southgate v. Sanford and Brooks Company, 147 Va. 554, 562 (1927); Worley Brothers Company v Marus Marble and Title Company, 209 Va. 136 (1968). However, a recent decision from the Fairfax Circuit Court points to a potential limitation of the doctrine in Virginia. See Modern Continental South v. Fairfax County Water Authority, 2006 WL 3775938 (Nov. 21, 2006.) In that case the court held that the doctrine applies in the “absence of negligence on the contractor’s part, or any express guarantee or warranty by him as to [the plans and specifications] being sufficient or free from defects.” The contract in question required the contractor to “verify all… details shown on the drawings… received from the Engineer…to notify him of all errors, omissions, conflicts and discrepancies…[and] the Contractor shall assume all responsibility for the making of estimates of the… quality of materials and equipment included in the work to be done under the contract.” Based on the contract language, the court held that the decisions in Spearin and Worley were inapposite and thus the Spearin doctrine did not apply.
We question whether the court in Continental South drew a proper legal conclusion as to the holdings in Southgate and Worley Brothers Company given that the quoted language is from the “usual clauses.” Also, it is not clear that a public body may transfer such liability on a design-bid-build project. It will be interesting to see whether other Virginia courts agree with the holding in Continental South. However, to be on the safe side, contractors should be aware of the potential effect of language as used in Continental South. Further, the Virginia Supreme Court has held that where a contractor is required to review plans and specifications and bring errors to the attention of the owner before doing the work, the contractor’s failure to conduct the review or provide such notice would defeat a claim for defective plans and specifications. See D. C. McLain, Inc. v. Arlington County, 249 Va. 131 (1995). So, read your contract and comply with applicable review and notice requirements.
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This article is meant to bring awareness to this topic and is not intended to be used as legal advice.