Q. I was hired to build a concrete slab for an addition to a church. My winning bid was $65,000. When it was completed, according to plan, the building inspector decided it was not up to code and could fail. I was asked to cut out some section and add footings beneath the slab for some columns, which I did, costing me another $10,000 in material and labor. When I submitted the final bill for $75,000, the owner refused to pay more than $65,000. He said that the extra work was warranty work and that I had violated my implied warranty. What is this and can I get the extra $10,000?
A. We looked to a recent column in the JOURNAL OF LIGHT CONSTRUCTION by Quenda Behler Story for the answer to this question. She says that, first, you did in fact give your customer an implied warranty that your work would meet the building codes. “Implied” means you provided the warranty even if you never said a word about it. But does that implied warranty mean you are stuck and don't have a prayer of collecting for the extra work necessary to get the project approved by the building inspector? Not always.
If there was an architect or engineer involved, it was their responsibility to make sure the design conformed to the local codes. Even the AIA standard contract says that. Architects and engineers are design professionals; they're the ones who know how to do this.
But some architects and engineers write a clause into the building contract that says you, the contractor, are required to construct the project “according to applicable codes.” Does a clause like this in the prime contract mean that you, not the architect or engineer, have to eat the extra $10,000? That depends on how hidden the structural flaw that created the problem actually was. Even if the contract tries to shift the responsibility to the contractor, most jurisdictions will hold the contractor liable only for work that he “should have known” didn't meet code.
So, as a general rule, this kind of contract language won't get the architect or engineer off the hook for subtle engineering flaws they should have known how to avoid. Of course, the extent to which the engineering flaw was subtle—or obvious—is a question of fact that a jury or arbitrator may have to decide.
Here's a useful protective clause for your contracts. If you are offered a contract with the language described above, add a clause or an addendum that states, “The contractor is not responsible for work that does not comply with the building code if that work complies with the building plans and design that were provided to the contractor.”
But suppose there wasn't an architect or engineer involved and that the church's building committee had just designed the addition as a sketch. Here's what to do: In your original contracts and proposals, include language that specifically says that you are relying on the owner's plans, and you are not assuming responsibility for the adequacy of those plans, or for those plans meeting building codes.
But will that language get you off the hook? Not every time.
For example, it won't get you off the hook for things you should have noticed—say that there was to be a row of columns in the middle of the floor and that they would need footings beneath them. Any “patent” flaw, which is a legal term that includes both the flaws you actually did notice and those you should have noticed, is your problem. If you, as an experienced person in the construction trade, should have realized there was a problem with this design, then you could be held responsible for that problem. And if you do notice a problem along the way, you need to inform everyone about it, because no contract clause can protect you when you knowingly do something wrong.
So what do you do in this situation while you're still negotiating with the church? You need to limit your implied warranty that this design will meet the building code by stating specifically in your documents that you are relying on the owner's plans. If the church floor failed and people were hurt, contract language might protect you from the church committee that didn't know enough to design the floor properly, but it will not protect you from the injured worshippers.
— Quenda Behler Story has practiced and taught law for more than 25 years. She is the author of The Contractor's Plain-English Legal Guide (www.craftsman-book.com).