I read in my Twitter feed this morning about a recent case where the Missouri Court of Appeals formally adopted the Spearin Doctrine.
If you live in the government contracting world, don’t start sending me emails about how wrong I have described the Spearin Doctrine above. Let me expand my statement beyond 140 characters and give you some more information about the 1918 decision in United States v. Spearin:
- The Facts. The case involved a contractor who agreed to build a dry-dock in the Brooklyn Navy Yard. In order to build the dry-dock in the site selected for it, the contractor was required to relocate a portion of a sewer that ran through the specified site. The owner (the United States) provided the plans and specifications for the sewer that was to be relocated. The contractor completed the work according to the plans and specifications. The owner approved and accepted the work. But wait … about a year after the relocation of the sewer, a dam in a connecting sewer caused flooding in the area excavated for the dry-dock. This dam was not shown on the owner’s plans and specifications. That’s the background and here is my tweet:
- The Rule. The Spearin Doctrine is legal principle that holds that when a contractor follows the plans and specifications furnished by the owner, and those plans and specifications turn out to be defective or insufficient, the contractor is not liable to the owner for any loss or damage resulting from the defective plans and specifications.
- Exceptions to the Rule. In 2007, the Ohio Supreme Court rocked the construction law world by significantly limiting the application of the Spearin Doctrine. In Dugan & Meyers Construction Co. v. Ohio Dept. of Administrative Services, the trial court applied the Spearin rule in favor of the contractor based upon alleged damages from the impact of an excessive amount of design changes. On appeal, the Ohio Supreme Court reversed, holding that the Spearin Doctrine did not apply to cases involving delays due to design changes. Rather, the court focused its decision on the “no damages for delay” and “written requests for time extension” clauses in the contract. Specifically, the court concluded: “We observed that the Spearin Doctrine does not invalidate an express contractual provision.”
What’s the lesson for contractors? First, make sure you know and understand the “governing law” for your particular dispute, whether it is federal law or state law. Second, make sure you read your contract to understand the notice provisions and changes clause. Finally, make sure you are documenting any impacts of delays caused by defective specifications or plans.