Client’s Implied Warranty of the Adequacy of Plans
from the desk of Nahom Gebre
In United States v. Spearin (1918), the U.S. Supreme Court held that a contractor will not be liable to the client for loss or damage caused solely by inadequate information in the plans and specifications that the client provides to the contractor. Over the years, a version of this principle has been adopted in federal courts and most state courts, and it is known as the Spearin Doctrine. The Spearin Doctrine states that there is an implied warranty from the client to the contractor that the client’s plans and specifications have enough information for the contractor to construct the project.
It is important to note that the design professional’s legal obligation is to provide services in a manner that meets the standard of care for the profession. The standard of care required of design professionals is to practice with the same skill and care used by members of the profession practicing under similar circumstances at the same time and in the same locality. Therefore, clients face the risk that they can still be held responsible for any additional costs if the contractor can successfully claim that the plans and specifications did not have enough information to construction the project, even if the design professional’s services met the standard of care.
A recently reviewed contract contained the following provision:
The Engineer/Architect further agrees to indemnify and hold harmless the Owner and Owner's agents and employees against all claims, damages, losses and expenses, including but not limited to attorneys' fees arising out of the Owner's implied warranty of the adequacy of the design and plans prepared by the Engineer/Architect. (emphasis added)
This provision shifts the risk that the client has due to the Spearin Doctrine to the design professional. It is important to note that the design professional would not ordinarily be obligated to indemnify the client for the Spearin Doctrine as long as the services were performed in a non-negligent manner. Prudent risk management requires careful review of contracts so that the client’s attempts to transfer risk to the design professional are identified and negotiated before the contract is signed.