Construction Law Insights

When owner-supplied plans and specifications turn out to be defective or insufficient in a traditional design/bid/build scenario, the contractor is not liable to the owner for any loss or damage resulting from the defects according to the “Spearin Doctrine.” Rather, the owner gives an implied warranty that the plans it has furnished are adequate. Courts in virtually all states have adopted the Spearin Doctrine.

United States ex rel. Engineered Servs., Inc. v. T.H.R. Enters., Inc., Civil No. 4:14cv21 (E.D. Va. Jan. 23, 2015)

The Navy contracted with THR Enterprises, Inc. (“THR”) to upgrade the HVAC system in one of its buildings. THR subcontracted with Applied Control Specialists (“Applied”) to install the Direct Digital Control System. Applied Assigned the subcontract to Engineered Services, Inc. (“Engineered Services”).

Recently, in ProBuild v. DPR, a Charlottesville, Virginia Circuit Court allowed a subcontractor to proceed straight to litigation despite the subcontract’s ADR provisions. The matter involved a dispute that arose after the completion of a construction project where ProBuild, the subcontractor, handled the framing and installation of exterior siding for DPR, the general contractor. ProBuild made a final payment claim of approximately $1.9 million on DPR, but DPR asserted a setoff of about $1.4 million for project delays and defective work that DPR said it had to cure.

On May 14, 2015, the University System of Georgia and Corvias, as part of a financial closing, secured $548.3 million in private financing for a public-private-partnership. Corvias was chosen by the Board of Regents for the University System of Georgia to develop, construct, manage, and maintain student housing on nine campuses in Georgia as part of a 65-year partnership. 

General District Court Increases Allowed Claims to $25,000

Effective July 1, 2011, the maximum amount for which a party may bring a claim in the General District Court (GDC) is increased from $15,000 to $25,000. (Va. Code §16.1‐77.) This will provide a faster and more inexpensive way for parties to litigate disputes within that threshold.

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