Who Gets Stuck for Plan Defects?

So, you thought all you had to do was follow the plans and specifications furnished to you by the owner and could avoid problems created by any defects in the plans or specs.  Wrong!  Most contractors think that the owner warrants the sufficiency of the plans and specifications when the owner furnishes them to the general contractor.  This misunderstanding has been around for over a hundred years. 

As early as 1907, in Lonergan v. San Antonio Loan & Trust Co., 104 S.W. 1061, the Texas Supreme Court allocated to the contractor the risk of proceeding with inadequate or deficient plans or specifications even though they were provided by the owner.  This position was recently confirmed by the Texas Supreme Court and the Fifth Circuit in Interstate Contracting Corp. v. City of Dallas, where the Supreme Court answered certified questions from the Fifth Circuit, 135 S.W. 3d 605 (Tex. 2004) followed in 407 F.3d 708 (5th Cir. 2005). 

The only way the contractor can avoid the allocation of risk is to expressly negate that allocation by express language in the owner-contractor contract.  The language for the general contract could be as simple as “Owner warrants to Contractor the sufficiency and adequacy of the plans and specifications.”  So, contractors, protect yourselves by having the owner warrant the sufficiency of the plans and specs to your contract. Don’t get stuck with plan defects!