Is a Contractor Required to Follow the Specifications and Instructions of the Property Owner?

A Contractor Is Required to Produce the Intended Results of a Construction Project. If the Project Specifications Are Flawed and Insufficient to Produce the Intended Result the Contractor May Be Liable For the Deficient Result Even If the Specifications Were Provided By the Property Owner and Followed By the Contractor.

Understanding Various Issues Within the Law of Defective Workmanship Including the Requirement to Produce Results

Model house with major crack in exterior wall covered with bandaid. When a contractor is hired for the purpose of achieving a specific result, the contractor is required to produce the specific result and the contractor is unexcused when the contractor knew of the result expected.  The contractor is also unexcused even if the contractor performed as per the express specifications and directives received from the property owner.

Durability and Suitability, implied by contract

Contractors are often mistaken by a belief that the legal obligations under a contract are simply to perform as specified within the contract.  This perception can lead to legal action for failure of durability or suitability of the work product; as essentially, when a contractor agrees to supply materials and perform work, the law imposes an implied term within the contract that the materials and work will be both reasonably durable as well as reasonably suitable for the job.  These implied terms were stated within Dirm Inc. v. Bennington Construction Ltd.2010 ONSC 3298, as follows:

[98]  I further conclude that, while not an expressed term of the contract between these parties, it was an implied term of the contract that the concrete finish would be durable.  Reasonable durability of the concrete has a certain degree of obviousness and as such it is a reasonably implied term of the contract: M.J.B. Enterprises Ltd. v. Defence Construction (1951) Limited, 1999 CanLII 677 (SCC), [1999] 1 S.C.R. 619 at paras. 27-29. The delamination appeared within less than one month after the pouring of the concrete.

[99]  Further, although Dirm may have complied with the specifications provided to it, in general terms, having undertaken to produce a particular result, it will still be liable even if it followed the specifications and the required result was not obtained: Steel Co. of Canada v. Willand Management Ltd. [1966] S.C.R. 746Temar Construction Ltd. v. West Hill Redevelopment Co., 1986 Carswell Ont. 778.

Expectation Obligations, design or result

As above per the Dirm case, a contractor must perform beyond just completing work in accordance to the design or specifications received; the contractor must achieve the reasonably expected result.  This obligation was explained in Alliance v. Manorcore2013 CanLII 60850, where it was said:

[99]  The Supreme Court of Canada in Steel Co. of Canada v. Willand Management Ltd., [1966] S.C.R. 746 approves the proposition in Hudson’s Building and Engineering Contracts, 8th ed. 1959 which states “Sometimes again, a contractor will expressly undertake to carry out work which will perform a certain duty or function in conformity with plans and specifications, and it turns out that the work constructed in accordance with the plans and specifications will not perform that duty or function.  It would appear that generally the express obligation to construct work capable of carrying out the duty in question overrides the obligation to comply with the plans and specifications, and the contractor will be liable for the failure of the work notwithstanding that it is carried out in accordance with the plans and specifications.  Nor will he be entitled to extra payment for amending the work so that it will perform the stipulated duty.

[100]  This case as followed in Dirm Inc. v. Bennington Construction Ltd., [2010] O.J. No. 2591 at paragraphs 98 and 99.  Both cases indicate that if a contract was to produce a particular result then the contractor can be liable even if it follows the specifications required.

The issue of who is responsible for a design flaw, such as specifications or plans, where the design was prepared by unqualified layperson whom the contractor knew was relying upon the expertise of the contractor was well stated in Complete Access Lift & Mobility Ltd.  v. Riggi, et al2010 CanLII 100648, whereas it was said:

120  1) Responsibility for Design - The Plaintiff’s position throughout has been that it faithfully performed its obligations as agreed and set out in the final contract between the parties, as amended.  That it explained the choices available to the Defendants and that the Defendants made their choices and are responsible for them.  The Plaintiff also relied upon provisions in the Contract and the “three way” agreement with M-o-D which stipulate that the Defendants were responsible for permits, architectural drawings and engineering approvals.  Plaintiff contends that since Defendants did not obtain any such permits, drawings or approvals they cannot hold Plaintiff responsible for defects that could have or should have been revealed by or in the process of obtaining same.

121  The Defendants’ argument on this point is based upon the concept of reasonable reliance.  O’Toole presented himself to them as a knowledgeable and competent highly qualified expert.  Defendants relied upon that expertise, Plaintiff knew that he was being relied on, the reliance was not unreasonable and therefor Plaintiff is liable when the contract fails to achieve its purpose.

122  The critical point in this argument is the contractor’s knowledge of the purpose for which their work is obtained. Steel Co.  of Canada v. Willand Management Ltd.1966 CanLII 13 (SCC), [1966] S.C.R. 746 is an Ontario case in which the plaintiff roofing company: a) supplied and installed a roof using materials that were precisely specified by the defendant; and b) provided a written warranty of water tightness that was also precisely specified by the defendant.  The roof failed during the warranty period due to the unsuitability of the material specified by the defendant.  Plaintiff fixed the roof and was obliged to sue when defendant refused to pay.  The Supreme Court of Canada found that the warranty was proof that the property owner had relied on the skill and expertise of the contractor, that the contractor knew of this reliance and that they should have realized that material specified by the defendant was not suited to the application.

123  Whether the contractor subjectively realizes that the material or the design or other contractually specified result is not suitable or feasible for its intended purpose appears to be irrelevant – liability arises from a duty that is imposed as a consequence of reliance.

124  As Eberhard, J. stated in the case of Comeau v. Perrault, [2002] O.J. No. 1834 (S.C.J.),after reviewing the law as set out by the Supreme Court of Canada in Steel Co. of Canada and as followed and developed in related cases:

[12]  I conclude from these cases that a contractor's duty and corresponding liability, in the circumstance where the work contracted for is not feasible given the defective and/or aged state of the work site, may be wider than the terms of the contract.  The concept of imposing a duty on the contractor appears to be impacted by the amount of reliance placed on the skills of the contractor and the existence (or non-existence) of an architect or engineer on site; the owner's knowledge of the work being performed and/or construction work in general.

[13]  The Plaintiff knew that the Defendant's purpose was to level her floors.  If level foundations could not be achieved by constructing on the old foundations he had a duty to advise her and cannot now claim that the failure to achieve level was due to the method or prior defect in the site.

125  This is a case where the work contracted was not suited to its purpose, given the specific circumstances of its intended user and the existing configuration of its location.

126  Here, the Plaintiff knew that Defendant did not have any “team” of designers, architects, engineers or other professional consultants.  He knew that the purpose of the project was to provide a safe, comfortable and convenient shower facility for Enzo Riggi in his own family home.  He knew or should have realized that the Defendants were relying on him alone to achieve this and he should not be surprised that he is liable for the cost of repairing the design error.

Placement of Reliance on Contractor

Furthermore, it is the reliance upon the contractor that imposes the duty to produce work that will perform in accordance to the intended result.  The reliance factor for contractor liability arising from a failure to produce the result intended by the property owner was explained in Jayde Mechanical Inc. v. Szabo2017 CanLII 45933 where it was said:

Whether the contractor subjectively realizes that the contractually specified result is not suitable or feasible for its intended purpose appears to be irrelevant – liability arises from a duty that is imposed as a consequence of reliance.  As Eberhard, J. stated in the case of Comeau v. Perrault, [2002] O.J. No. 1834 (S.C.J.), after reviewing the law as set out by the Supreme Court of Canada in Steel Co. of Canada and as followed and developed in related cases:

I conclude from these cases that a contractor's duty and corresponding liability, in the circumstance where the work contracted for is not feasible given the defective and/or aged state of the work site, may be wider than the terms of the contract.  The concept of imposing a duty on the contractor appears to be impacted by the amount of reliance placed on the skills of the contractor and the existence (or non-existence) of an architect or engineer on site; the owner's knowledge of the work being performed and/or construction work in general.

The Plaintiff knew that the Defendant's purpose was to level her floors.  If level foundations could not be achieved by constructing on the old foundations he had a duty to advise her and cannot now claim that the failure to achieve level was due to the method or prior defect in the site.

Duty to Warn, insufficient specifications

This duty to produce work that will serve the intended purpose contains a duty to warn the customer where a contractor knows, or ought to know, that the design or plan or project specifications are insufficient to achieve the intended result.  The Supreme Court has said that contractors are under a duty to warn with respect to designs or plans that are deficient and will detrimentally affect a construction project.  Specifically, in the case of Nowlan v. Brunswick Construction Ltd.[1975] 2 S.C.R. 523, the Supreme Court stated:

In the course of his reasons for judgment, Mr.  Justice Bugold described the president of the appellant company in the following terms:

Mr. Durette was president and general manager of the construction company at the time.  He had 22 to 24 years experience in the construction business.  His company built an average of 100 to 200 houses a year as well as having been engaged in building schools, churches and any type of building.  With his vast building experience there can be no doubt that he would be very proficient in the study and interpretation of plans and specifications.  Since the design of the house was bad this fact should or ought to have been detected by him and, in that event, was he duty bound to advise the Owners that the plans prepared by the architects were not suitable for the intended permanent work.

In my opinion a contractor of this experience should have recognized the defects in the plans which were so obvious to the architect, Arnoud, subsequently employed by the respondents, and, knowing of the reliance which was being placed upon it, I think the appellant was under a duty to warn the respondents of the danger inherent in executing the architect's plans, having particular regard to the absence therein of any adequate provision for ventilation.  Like Mr. Justice Bugold, I take the following excerpt from Hudson's Building and Engineering Contracts, 10th ed.  at p.  291, which was adopted by this Court in Steel Company of Canada Limited v. Willand Management Limited 1 at pp. 753 and 754, as having direct application to this case:

So a contractor will sometimes expressly undertake to carry out work which will perform a certain duty or function, in conformity with plans and specifications, and it turns out that the works constructed in accordance with plans and specifications will not perform that duty or function.  It would appear that generally the express obligation to construct a work capable of carrying out the duty in question overrides the obligation to comply with the plans and specifications, and the contractor will be liable for the failure of the work notwithstanding that it is carried out in accordance with the plans and specifications.  Nor will he be entitled to extra payment for amending the work so that it will perform the stipulated duty.

In the result, I agree with Mr. Justice Bugold that the contractor was in breach of its contract and liable for the failure of the work.  I would therefore dismiss this appeal with costs and affirm the judgment of the Appeal Division of the Supreme Court of New Brunswick.


Page 1 - Defect Issues, introduction Page 2 - Cause of Action, contract law or tort law Page 3 - Mitigation Requirement, reduce losses Page 4 - Mitigation, future risk of harm defect Page 5 - Who to Sue, privity of contract and vicarious liability Page 6 - Mandate to Produce, expectations overule specifications Page 7 - General Damages, aggravation and disappoinment
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