Warranty Provisions

Jan. 1, 2024
Contracts must be interpreted thoroughly to avoid absurd results

By Jon Straw

You are responsible for things within your control. Be careful if assuming responsibility without control.

On a public works contract for a public owner in Washington, the contractor constructed and installed a pipeline to convey overflow wastewater toward a diversion structure and storage tank. Nine months after substantial completion, the owner discovered the pipeline had fractured, allowing soil and other debris into the pipe.

More than a year after substantial completion, the owner demanded the contractor repair the pipeline. The contractor understandably refused to perform the repair work since the cause of the fracture was due to a design flaw, not installation. Notably, the owner prepaid the contractor to perform the repair work, and the contractor timely repaired the pipeline.

More than four and a half years after substantial completion, the owner sued the contractor alleging breaches of contract and warranty, and sought clawback of the payment for the repair work. The contractor defended under the Spearin doctrine, which holds that where “a contractor is required to follow plans and specifications furnished by the owner, the [owner] impliedly guarantees that the plans are workable and sufficient.”

The Spearin doctrine is an implied warranty by the owner that if the contractor follows the owner’s design and the contractor does not provide any additional design-related work, the contractor is not responsible if the result does not work. This is because, in a traditional design-bid-build contract, the contractor does not control the design. In other words, the party controlling the causation of the problem is responsible for that same problem. The same concept is true for indemnity.

In this case, the contract included a provision entitled “Correction of Work or Damaged Property,” under which the owner could reject and demand correction of any work performed by the contractor. The contract defined “work,” to include “the labor, materials, equipment, supplies, services, other items, and requirements of the Contract necessary for the execution, completion, and performance of all work within the Contract by the Contractor to the satisfaction of [the Owner].”

The contract further provided, “Contractor will not be required to provide professional services which constitute the practice of architecture and engineering except to the extent provided for in the technical specifications and drawings.” The contract also included a standard “warranty” clause providing one-year warranty of the work from the date of substantial completion.

The owner argued the clause requiring “Correction of Work or Damaged Property” supplanted the implied Spearin warranty and the trial court agreed. On appeal, the contractor rightfully prevailed. King County v. Walsh Construction Company II, LLC, 27 Wash.App.2d 156 (July 3, 2023).

Although it is possible for an express warranty to supplant the implied Spearin warranty, in this case the language of the “warranty” clause and scope of the “work” was for installation only, not design.

When interpreting contracts, courts strive to give meaning to all parts and avoid absurd results. With this in mind, the appellate court reasoned that the “warranty” provision with its one-year time period would be meaningless if the contractor, under the “correction” clause, was also required to correct defective work for an unlimited time and regardless if the contractor had performed the alleged defective work.

The appellate court held the contractor did not expressly warrant the entire project, including design, so the implied Spearin warranty remained intact. On Nov. 8, 2023, the Supreme Court of Washington denied review of the appellate court opinion; so, this is the final court decision on this matter.

In other instances, the language of the contractual language was held to expressly warrant the entire project (including design), even when the contractor providing the warranty performed no design work. In one other case, the contractor guaranteed a roof would be “kept in perfect condition for a term of 10 years.” In another case, the contractor guaranteed “the satisfactory operation of all materials and equipment installed under the contract.”

The language of the contract matters because parties may contract around default rules. RB

About the Author


Jon Straw is a partner with Kraftson Caudle, PLC, a law firm in McLean, Va., specializing in heavy-highway and transportation construction. Straw can be contacted via e-mail at [email protected].

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