A project owner is in the best position to gain familiarity with the physical conditions at the project site. The owner has ample opportunity to investigate those conditions, including expert evaluation. The owner then hires professionals to prepare design documents which reflect and accommodate those conditions.
Prior to commencing work, a contractor has a limited opportunity to gain familiarity with site conditions. But as the contractor performs the work, the contractor becomes very knowledgeable about the site. The contractor may discover features of the site which call into question aspects of the owner’s design. To what extent does the contractor have a duty to alert the owner to possible shortcomings?
A Tennessee project owner recently sued its contractor for breach of the warranty of workmanship. The owner alleged the contractor learned of saturated soil which rendered the owner’s design inadequate. A workmanlike performance, said the owner, would have included a contractor warning to the owner. A court ruled the contractor had no reason to know of the problem. But the court stopped short of saying the contractor would never have a duty to warn.
What should a contractor do in this situation? If there is a condition which differs materially from representations in the contract documents, the contractor should give notice. But what if there were no applicable representations? Should the contractor soldier on in compliance with the design documents? If a contractor questions the adequacy or suitability of the design, isn’t the contractor somehow assuming responsibility or potential liability? I welcome your comments.
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