Project Owners Can Effectively Combat Contractors' Efforts To Use The Spearin Doctrine As A Sword With Strategic Planning Beforehand

• Published date: 01 June 2022
• Subject Matter: Corporate/Commercial Law, Real Estate and Construction, Contracts and Commercial Law, Construction & Planning
• Law Firm: Thompson Coburn LLP
• Author: Ms Rose Tanner and Paul Sonderegger

Contractors across the country can use the over 100-year old Spearin Doctrine'which places liability for construction defects on the party who either mandates specifications or is given discretion'as an offensive weapon to recoup damages. Recent case law has been handed down that clarifies and sets forth scenarios when a contractor can use the Spearin Doctrine as a sword. Through careful planning, project owners and developers can draft construction contract terms and conditions that can effectively negate contractors' ability to utilize the Spearin Doctrine offensively in lawsuits.

Background

Defendant contractors or subcontractors have traditionally used the Spearin Doctrine as a shield to liability for the failure of a project's design. See United States v. Spearin, 248 U.S. 132, 136 (1918). The Spearin Doctrine provides that, when an owner provides mandatory design plans and associated specifications, an implied warranty attaches as a matter of law, and the contractor cannot be at fault when the design fails. Spearin also states that an owner cannot prevent a contractor from using the Spearin shield by including general contract clauses, such as broadly requiring the contractor to examine the site or check the plans pre-construction.

A majority of states have adopted the Spearin Doctrine, including Missouri. See Penzel Constr. Co., Inc. v. Jackson R-2 Sch. Dist., 544 S.W.3d 214, 226 (Mo. Ct. App. 2017). Penzel recognized that the Spearin Doctrine is not limited to its original use as a shield; it can also be used as a sword by contractors against owners. In Penzel, the contractor's use of the Spearin Doctrine in its breach of contract claim resulted in a $800,000 jury verdict award to the plaintiff contractor. The Missouri Court of Appeals affirmed this judgment. Penzel Constr. Co., Inc. v. Jackson R-2 Sch. Dist., No. ED 108821, 2021 WL 3040984, at *27 (Mo. Ct. App. July 20, 2021), reh'g and/or transfer denied (Aug. 23, 2021). For additional discussion of Penzel, see Missouri appellate court opens the door to Spearin claims by contractors against public entities (thompsoncoburn.com).

Drafting construction contracts to avoid the Spearin sword

Owners can avoid the Spearin sword by giving contractors contractual discretion or responsibility for the design. A recent federal court decision highlights how important it is for owners to carefully draft their contractual documents. In BAE Sys. Ordnance Sys., Inc. v. Fluor Fed. Sols., LLC, No. 7:20-CV-587, 2022...