Monthly Archives: June 2017

Owner’s implied warranty of drawings and specifications under Missouri law. Penzel Construction Company, Inc., v. Jackson R-2 School District. Missouri Court of Appeals, Eastern District (2017), by Hugh Anderson

Summary: Under the Spearin doctrine, now approaching its centennial, a public owner makes an implied warranty in every  construction contract that the government’s drawings and specifications are adequate for the contractor to perform the work required by the contract. Originally a federal legal principle, the Spearin doctrine has been followed or adopted in most jurisdictions […]

Continue reading

Contractor’s right to cure before being terminated for cause. Milton Regional Sewer Authority v. Travelers Casualty and Surety Co. United States Court of Appeals for the Third Circuit (2016), by Hugh Anderson

Summary: The contractor on a public works project in Milton, Pennsylvania, struggled to perform adequately in the early stages of the work. The frustrated owner suspended the work, and in response the contractor offered in writing to correct any failures in the work. The owner declined that offer and instead terminated the contract for cause, […]

Continue reading

Does termination for convenience preclude the owner from entitlement to liquidated damages? Old Colony Construction LLC v. Town of Southington. Supreme Court of Connecticut (2015), by Hugh Anderson

Summary: A termination for convenience typically results in the contractor walking away from the project with payment for work rendered, and no concerns about further liability to the owner. The EJCDC standard termination for  convenience clause does not mandate the freedom from further liability; to the contrary it intentionally reserves Owner’s other rights and remedies. […]

Continue reading

Owner’s right to withhold retainage during dispute. FTR International, Inc. v. Rio School District. California Court of Appeals (2015), by Hugh Anderson

Summary: The contractor, FTR, constructed a school under a $7.34 million contract with the Rio School District. The contract required retainage of 10%. When the work was completed and the school opened for classes, the school district was holding $676,436 in retainage. According to the controlling California payment statute, the project owner is required to […]

Continue reading

Structural engineer’s liability to homeowners’ association for structurally unsafe building. Pointe at Westport Harbor Homeowners’ Association v. Engineers Northwest, Inc. Court of Appeals of Washington (2016), by Hugh Anderson

Summary: Many states recognize some version of the economic loss rule, which provides that losses that are merely economic in nature must be recovered in a breach of contract action, not in tort (negligence). Breach of contract claims generally require a direct contractual relationship between the two parties. The common adjunct to the economic loss […]

Continue reading