A project owner is in the best position to gain familiarity with the physical conditions at a project site. The owner has ample opportunity to investigate those conditions and, if necessary, seek expert evaluation. The owner then hires professionals to prepare design documents that reflect and accommodate those conditions.

A contractor has a limited opportunity to gain familiarity with the site conditions. Bidding within a short time frame, frequently with constrained access for site inspection, the contractor must rely on the owner’s representations and design. But, as the contractor progresses with the work, the contractor learns more. To what extent does the contractor have a duty to alert the owner to possible shortcomings in the owner’s design?

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 have had no duty to warn.

Another case this week involved a contractor’s attempted recovery under the differing site conditions and changes clauses. There was no differing site condition. There may have been changed work, but the contractor neglected to get written authorization prior to proceeding with that work. And in the third case, a contractor was not responsible for the ramifications of a faulty post-construction survey commissioned by the project owner.