Implied Warranty Obligations in Construction Law
In construction law, there are express warranties and implied warranties. Express warranties are straightforward; they are written in the contract expressly. Implied warranties are implied by law and therefore are applicable even if not spelled out specifically in the contract.
Implied warranty by contractor
A contractor warrants to the project owner that the work will be performed in a "workmanlike" manner and free from defects. While Louisiana courts have not adopted a universal definition for the term "workmanlike," courts have applied an objective industry standard.
Louisiana courts have made clear that implicit in every building contract is the requirement that the work shall be performed in a good, workmanlike manner, free from defects in material and workmanship. Davidge v. H&H Construction Co., 432 So.2d 393 (La.App. 1st Cir. 1983). The Louisiana Civil Code reinforces this concept, stating: "If an undertaker fails to do the work he has contracted to do, or if he does not execute it in the manner and at the time has agreed to do it, he shall be liable in damages for the losses that may ensue... ." La. Civ. Code article 2769 (Contractor's liability for non-compliance with contract). The general measure of damages in these circumstances is the cost of repairs.
Implied warranty by owner
On the flip side, the owner warrants that the plans provided to the contractor are sufficient to build the project. Thus, contractor's implied warranty is dependent on the owner making good on its implied warranty. The owner's implied warranty has roots in federal case law dating back a century and became Louisiana law almost 60 years ago.
Louisiana Revised Statute § 9:2771 states: "No contractor, including but not limited to a residential building contractor as defined in R.S. 37:2150.1(9), shall be liable for destruction or deterioration of or defects in any work constructed, or under construction, by him if he constructed, or is constructing, the work according to plans or specifications furnished to him which he did not make or cause to be made and if the destruction, deterioration, or defect was due to any fault or insufficiency of the plans or specifications." Therefore, a contractor is not liable for any defects if the contractor performed in accordance with the furnished plans and the furnished plans were the cause of the defect. Implicit therefore is the owner's responsibility to provide sufficient plans to the contractor.
The federal counterpart to La. Rev. Stat. § 9:2771 is the Spearin doctrine, which speaks to the same implied warranty but more directly states the responsibility of the owner to provide sufficient plans to the contractor. The doctine gets its name from the Supreme Court case, United States v. Spearin, 248 U.S. 132 (1918), which held that owner of any construction project impliedly warrants that the information, plans, and specifications being provided to the contractor are sufficient to build the project. Therefore, if the contractor constructs the project in strict accordance with the plans and specifications provided by the owner, the contractor cannot be held liable if a loss or damages result.