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Missouri Court Holds Public Owner is Liable for Issuing Defective Contract Documents

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07.10.2017
By Susan McGreevy

Although the federal courts have followed the Spearin doctrine since 1918, it took Missouri just shy of a century to come on board. Under U.S. v. Spearin, it was held that when a government entity includes detailed specifications in a contract, it impliedly warrants that if the contractor follows those specifications, the result will not be defective, and if it is, the contractor will not be responsible. In Penzel Construction Company Inc. v. Jackson R-2 School District, the Missouri Court of Appeals decided firmly that this same principle applies to Missouri public owners. "[C]ommon sense dictates that a contractor should not be penalized for doing exactly what he was required to do under another's plans." And while the fault appeared to lie with the electrical engineer, not the owner, the court found that since the contractor had no contract with the engineer, it couldn't sue the engineer. Therefore "the only way to place the parties in an equitable position would be to allow Penzel – on Total Electric's behalf – to bring a claim against the district, which may then attempt to recover from its own [designers]. . ."

This is good news for contractors who have to rely on the accuracy of plans and specs when providing bids for public work. Also encouraging was the court's ruling that the contractor didn't have to be able to prove his damages to the penny. He could use the "modified total cost approach" of asking for his total cost, minus the contract amount, and also minus any extra costs that were his own fault. 

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