Trent Cotney, P.A.
There are a variety of warranties in the roofing industry, including warranties provided by material suppliers and warranties governing the workmanship of a roofing contractor. Often, a roofer or supplier may want to limit the warranties it provides to a customer. This article will discuss the type of warranties associated with the sale of goods such as roofing supplies and how a roofer or supplier can contractually limit or even eliminate the warranties it provides to customers.
The Uniform Commercial Code (UCC) (as adopted by Florida law) governs all transactions involving the sale of goods. “Goods” are defined under the UCC as all tangible things that are movable at the time they are identified as the goods to be sold under the contract. Therefore, the UCC does not apply to transactions involving security interests, real estate, or the exchange of services.
Furthermore, Article 2 of the UCC generally applies to merchants, or individuals regularly engaged in selling a good. For example, a transaction involving the sale of shingles from a supplier to a contractor would be governed by the UCC. The UCC would not apply to a contractor who does not sell the shingles but merely installs them for the customer. An interesting situation arises where the contractor sells the shingles and installs them. In this case, the UCC focuses on the purpose of the transaction. If the purpose was to sell the owner shingles, then the UCC will govern the transaction, but if the scope of the agreement focused on the installation of the shingles, then the common law of contracts applies to the transaction.
The UCC recognizes several different warranties. Express warranties involve explicit representations made by the seller to the buyer regarding the goods to be sold. An express warranty exists only if it is part of the agreement between the parties. For example, a written warranty in any contract or proposal, or sample models or descriptions of the goods to be sold may form express warranties.
The UCC also discusses two types of implied warranties. The implied warranty of merchantability provides the buyer of goods with the assurance that the goods are fit for the ordinary purposes for which the goods are used. The implied warranty of fitness for particular purpose arises when the seller knows that the goods are to be used for a special function. For example, if I buy tires for my car, the implied warranty of merchantability provides the reasonable expectation that the tires will withstand normal driving conditions. However, if I buy racing tires, the implied warranty of fitness for a particular purpose provides the reasonable expectation that the tires will withstand racing conditions.
To effectively disclaim UCC warranties, the disclaimer must be part of the agreement between the parties. Specific language must be used in the contract signifying that the parties agree to exclude or modify warranties. The disclaimer must be set off from the rest of the contract by a technique which would provide the reader with notice of the provision, such as bold-facing or capitalization of the
terms. Failure to make the disclaimer conspicuous may result in a court determining that the disclaimer is ineffective. Although generalized disclaimers such as “all disclaimers express or implied are waived by the buyer” may be effective in eliminating express warranties, courts have generally held that these nondescript disclaimers are not effective in modifying or excluding the implied warranties of merchantability and fitness for a particular purpose. Even though every disclaimer is subject to scrutiny, the following disclaimer has been deemed effective in excluding all express and implied warranties: THERE ARE NO EXPRESS OR IMPLIED WARRANTIES WHATSOEVER INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. Having provisions like this in construction contracts may help a contractor or supplier limit the scope of a warranty and thereby limit its liability on a project.
The majority of construction materials are readily available. However, at times, an owner may require the use of a construction material which is difficult to locate or only available from a single supplier. In this instance, several cases have suggested that the owner implicitly warrants the commercial availability of that particular material.
Although there are no reported cases where a Florida court has expressly adopted the implied warranty of availability, several non-Florida state and federal cases have extended the implied warranty of availability to the construction arena. This section will focus on the emergence of this implied warranty and discuss the ramifications for contractors and subcontractors if the warranty is adopted
in Florida.
The implied warranty of availability is similar to the implied warranty of constructability, which Florida has adopted. See U.S. v. Spearin, 248 U.S. 132 (1918); Phillips v. Jordan, 602 So.2d 1310 (Fla. 1st DCA 1992). The implied warranty of constructability provides that if the contractor complies with the plans and specifications furnished to it by the owner, the contractor will not be responsible to the owner for loss or damage that result solely from defective or insufficient plans. Similarly, the implied warranty of availability provides that when an owner specifies one supplier for a specialty or brand name material or material that is only available from one supplier, and that supplier is unwilling or unable to provide the construction material, then the government specifications are facially defective. As a result, the owner has breached the implied warranty of constructability and is liable for the contractor’s damages arising out of the defective specifications.
The difference between the implied warranty of constructability and the implied warranty of availability is that the former focuses on the sufficiency of the plans and specifications, where the latter focuses on the commercial availability of materials used in construction. Under the implied warranty of availability, the owner warrants that the supplier selected by the owner is capable of providing a specified construction material. However, case law has narrowed the scope of the implied warranty of availability by providing that the owner only warrants commercial availability. The owner does not warrant that the supplier will be able to provide the material in a timely fashion or at a specific price. Furthermore, the implied warranty only applies to owner-selected suppliers or construction materials and does not apply to supplier or material selections made by the contractor on a project. Therefore, if a contractor recommends the use of a specialty or brand name material from a single supplier, then the contractor is solely responsible for obtaining the material and assumes the risk of being unable to obtain the material during construction.
The seminal case on the implied warranty of availability is Aerodex, Inc. v. United States, 189 Ct. Cl. 344, 417, F.2d 1361 (1969). In that case, the plaintiff was the winning bidder on a project which required the plaintiff to provide missile systems for the government. The bid proposal and contract documents stated that the contractor must obtain a brand name version of a component used in the missile system from a specific supplier. However, when the component became necessary for completion of the missile system, the sole supplier of the component refused to sell the part to the contractor. The court held that the government had a duty “to ascertain and assure to bidders the commercial availability of the component from the manufacturer” or provide the bidders with a sufficient description of the component so that the component could be duplicated. Id. at 1366. Because the government breached the implied warranty of availability, the court held that the government was liable for the contractor’s damages.
The implied warranty of availability is not to be confused with Chapter 255, Florida Statutes and the sole source specification requirement. Chapter 255 provides for certain exceptions to competitive bidding where the governmental owner may specify a product or material that is only available from a single supplier. These statutes do not create an implied warranty of availability.
Although Florida has not expressly adopted the implied warranty of availability, the warranty has been implicitly adopted through Florida’s adoption of the implied warranty of constructability. Given its prevalence in other parts of the country, in the coming years, Florida will more than likely adopt the implied warranty of availability, which may provide a contractor or subcontractor with an additional claim or defense against project owners.
Generally, on construction projects, contractors provide an owner with a workmanship warranty. In addition, a contractor may supply the owner with manufacturer or material warranties after a project is completed. Although these types of warranties are provided by the contractor to the owner, the owner also provides certain warranties to the contractor during the course of construction. One such warranty is the implied warranty of constructability, also known as the implied warranty of fitness and plans or the Spearin Doctrine.
Unless the contractor is engaged in a design build project, the contractor is normally provided with a set of plans, specifications and design documents from the owner. The design documents may either be generated by the owner or at the owner’s request by an architect, engineer or other design professional. The Spearin Doctrine provides that the contractor is entitled to rely on the design documents provided by the owner. The contractor is bound to build the project according to the plans and specifications prepared by the owner or at the owner’s request. Under these circumstances, the contractor is not responsible for the consequences of design defects.
An owner implicitly warrants that if a contractor complies with the plans and specifications, which later prove to be defective, the contractor will not be liable to the owner for the loss or damage which results solely from the design deficiencies. In U.S. v. Spearin, 248 US 132 (1918), the United States Supreme Court articulated the implied warranty of constructability. In that case, the Court recognized to a certain extent the contractor is bound by the design provided to it on the project and that the contractor should not be liable for defects in that design. The Supreme Court also stated that the owner’s duty to provide accurate plans and specifications is not overcome by provisions in the contract requiring the contractor to:
1. check plans;
2. visit the site; or
3. assume responsibility for the construction until the project is completed and accepted by the owner.
Many states have adopted the Spearin Doctrine and applied its reasoning to construction projects. However, not all states follow the Spearin Doctrine, but those that do often hold the owner liable for delay damages as a result of design deficiencies. If the design documents are faulty and unreasonably delay completion of a construction project, the owner may be in breach of contract entitling the contractor to additional compensation. See Philips and Jordan, v. Dept. of Transportation, 602 So.2d. 1310 (Fla. 1st DCA 1992).
The Spearin Doctrine is an important tool that can be utilized by a contractor to defeat alleged claims for defective construction. For example, an owner may claim that the contractor defectively constructed the roof of an office building. After forensic examination, it is determined that the design of the roof was faulty. Under those circumstances, assuming the state recognizes the Spearin
Doctrine, the contractor would not be liable for structural deficiencies.
Contractual provisions in AIA documents and other construction contracts attempt to cut against the Spearin Doctrine, and courts may be less willing to look the other way when it comes to blatant design deficiencies. Therefore, the contractor should thoroughly examine all design documents prior to construction to determine their feasibility. During construction, if a design issue arises, the
contractor should notify the architect/engineer and owner’s representative of any design defect immediately. Many construction contracts allow for the request for information process (RFI) which allows contractors to request information and clarification on design-related issues from the architect or engineer of record.
By understanding and utilizing the Spearin Doctrine, contractors may be able to defeat owner claims related to design deficiencies and preserve and prosecute claims for delay damages arising out of design defects.
Author’s note: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.
Trent Cotney is an advocate for the roofing industry, General Counsel of FRSA, NWIR, WCRCA, and PBCRSMA, and a Florida Bar Board Certified Construction Lawyer. For more information, contact the author at 813-579- 3278 or go to www.roofinglawyer.com.
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