If you’ve never heard of the terms “Design Specification” or “Performance Specification” or you’ve heard of them but don’t know what they mean or why they matter, then you have probably never been involved in a dispute or litigation relating to defective specifications or inadequate designs.

A “Design Specification” sets forth in detail the materials to be employed and the manner in which the work is to be performed. The contractor is required to follow them as one would a road map and without deviation.  A “Performance Specification” describes an end result, an objective or standard to be achieved and leaves the determination of how to reach the result to the contractor

These terms are legal terms that are derived from a long-standing legal concept known as the implied warranty of specifications.  It’s also referred to as the “Spearin Doctrine,” because of a landmark ruling of the U.S. Supreme Court that set out the rule relating to the implied warranty in the context of a government construction contract.  Since that ruling, this doctrine has been adopted by virtually every state and is applied to both public and private construction projects.

Here’s what it says:

“Where one agrees to do for a fixed sum, a thing possible to be performed, he will not be excused or become entitled to additional compensation because unforeseen difficulties are encountered…But if the contractor is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible for the consequences of defects in the plans and specifications.”

United States v. Spearin, 248 U.S. 132 (1918)

In other words, the owner impliedly warrants that if the contractor completes the work in accordance with the owner’s plans and specifications but there is a deficiency or failure, the owner, not the contractor, is responsible.

This is why it matters whether a particular component of the design at issue is determined to be a “design specification” or a “performance specification:”

  • In general, the implied warranty of specifications applies only to design specifications, and not performance specifications
  • There can be exceptions to this general rule where the contractor has some participation in the design or control over the means and methods
  • The determination of whether a particular work item is a design or performance specification is a factually-intensive one and made on a case-by-case basis

Many claims relating to defective specifications or design hinge upon whether the specification at issue was a design or performance specification.

I’ll be discussing the legal significance of design v. performance specifications and factors affecting the allocation of risk of defective specifications in a webinar sponsored by The Construction Specifications Institute.  The webinar is Tuesday, April 3rd at 2:00pm Eastern time and registration is open to anyone.  Click here for more information or to register.

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