by Quenda Behler
Let's suppose you're hired by a local restaurant to build a
deck off the dining room so that customers can eat outside and
enjoy the view. Your bid comes in at $30,000, and the owner
After it's built, you call the building inspector for a final
inspection. When he sees the deck, he decides that it's not to
code and will never carry the weight of a bunch of tables and
customers. According to the inspector, you need to add some
beams. So you put them in and pass the inspection, but the
extra work adds $5,000 to the final bill.
At the end of the job, you hand the property owner a bill for
$35,000, and he says, "Hey, that extra $5,000 was warranty
work. You violated your implied warranty that your work will be
up to code." Since according to him you didn't do it right the
first time, he hands you a check for only $30,000.
Can you collect that extra $5,000? Bearing in mind that
different states have different rules — and even when the
rules are the same they may be expressed differently —
the answer is (as usual) that it depends.
First, you did in fact give your customer an implied warranty
that your work will 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're stuck, and that
you don't have a prayer of collecting for the extra work
necessary to get the project approved by the building
inspector? Not always.
Is It an Architect's Design?
If there were architects involved, it was their responsibility
to make sure the design conformed to the local codes. Even the
AIA (American Institute of Architects) standard contract says
that. Architects are the design professionals; they're the ones
who know how to do this.
Attempt to shift responsibility. But
some architects 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, have to eat
the $5,000 charge?
That depends on how hidden the structural flaw that created the
problem actually was. Even if the contract tries to shift
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 off the hook for the subtle engineering flaws
architects are supposed to know 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.
Useful protective clause. 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 does comply with the building plans and
design that were provided to the contractor."
"If you, as an experienced person in the
construction trade, should have realized there was a
problem with the design, then you could be held
Is It the Owner's Design?
But suppose there isn't an architect involved. Instead, the
restaurant owner draws the plan on the back of a napkin. He
says that's what he wants, and if you don't want the job he'll
find someone else. You do want the job but are nervous about
building something designed by a guy who runs a
Here's what to do: In your original contracts and proposals,
include language that specifically says you are relying on the
owner's plans and you are not assuming any responsibility for
the adequacy of those plans, or for those plans meeting
But will that language get you off the hook? Not every
Should have known better. For
example, it won't get you off the hook for the things you
should have noticed — say, that the span of the joists is
adequate only for residential use, not for commercial
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
So what should you do in this situation while you're still
negotiating with the restaurant owner? You need to limit your
implied warranty that this design will meet building code by
stating specifically in your documents that you are relying on
the owner's plans. You also need to take a hard look at whether
or not this napkin design is safe. If that deck collapses and
people are hurt, contract language might protect you from the
property owner, who was too greedy to pay for necessary work,
but it will not protect you from the injured customers.has practiced and taught law for more
than 25 years. She's the author of
Plain-English Legal Guide