The Spearin doctrine protects the contractor. In United States v Spearin (1918) the doctrine states “. . . if the contractor is bound to build according to plans and specifications provided by the owner, the contractor will not be responsible for the consequences of defects in the plans and specifications.” In such cases, the courts have held that the owner impliedly warrants that such design documents, if followed, will result in a buildable project. The owner is liable because he can control the design through his control of the design professional. The architect’s liability is often limited. Indeed, in an earlier case of Coombs v Beede (1896), the court held “The undertaking of the architect implies that he possess skill and ability, including taste, sufficient to enable him to perform the required service at least ordinarily and reasonably well. . .But the undertaking does not imply or warrant a satisfactory result.”
In a design build scenario, the contractor is the design professional and so the Spearin Doctrine disappears. The design builder has an implied warranty of performance. Thus, a design builder may find it difficult to get a change order funded by an owner. The owner wants the design builder to be the single point of responsibility. That is a two-edged sword. You may think a project will go smoother if you were in charge, but the fact is, you are in charge. The buck stops here. Further, the buck can stop here for a long time into the future. A majority of claims for design errors are often not made until 3 or 5 years after the project is completed. Architects have E&O insurance and no assets to attach. Many design builders have no E&O insurance, but have lots of assets so they can qualify for bonding. Their bank account becomes their E&O insurance by default. Although there’s a lot more risk if you choose design build, it’s a risk you can manage. You can purchase a liability policy designed for the design builder. The NASBP has an excellent product we can recommend. You can use construction documents designed to address design build issues. The AGC has some of the best documents available for this purpose. Get your insurance agent, attorney, and bonding agent all working with you to manage the risk.
Design build is the fastest growing delivery system in the United States. In five years, some estimate that as much as 70% of all construction will be design build. We bond a lot of design build projects. It’s a delivery method that can be a great opportunity. Just be sure to have your eyes wide open to the risks. Give us a call if you would like more information on design build.
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