Negligence and the loss of privity defense for architects and engineers (part two)

Adversarial relationship
Even with reduced construction obligations, the architect and the contractor are in an adversarial relationship and the owner is the principal beneficiary. According to provisions of the current owner-architect agreement the A/Es are responsible for:

  • observing contractors work to the best of their ability to ensure they perfom the work in accordance with the plans and specifications;
  • reviewing and approving materials and equipment submittals;
  • approving or denying monthly pay applications;
  • examining and approving or denying pricing for change orders;
  • overseeing the results of tests and requiring replacement if the materials or equipment are rejected;
  • rejecting defective work; and
  • inspecting the compliance of the work for substantial completion.

Contractors should be barred from bringing claims against architects, because it diminishes the architect’s authority to carry out their oversight obligations during construction.

Self-policing an unreliable policy
Some architects are reacting to this new uncertainty by scaling back their construction services detracting from the traditional checks and balances. Many aspects of substandard construction result from hidden workmanship issues that will not come to light for years (e.g. poor roof construction, insufficient subgrade preparation, laying masonry in freezing conditions, watering concrete etc.). It takes a practiced eye to spot these defects in the making and the A/E is especially suited to perform this function.

Traditionally, architects and engineers participated in the construction activity with the conviction that they needed to be present to prevent substandard workmanship and deterioration of the design intent. However, this lofty optimism has given way to the more cynical practice of defensive architecture—avoiding the role of supervisor and leaving it to contractors to self-police.

Do architects have unlimited power over contractors?
Nothing seems farther from the truth. Some justices have reasoned in claims cases that contractors should have recourse to tort law to protect themselves from architects who have power of economic life and death over them. However, that kind of a power relationship has not existed for at least 30 years. Instead, architects have structured their contracts with the owner to reduce their control over the contractor even declaring they are not the guarantors of the contractor’s work and disavowing any authority to halt the work.

Today, contractors have recourse to many authorities if they are dissatisfied with the reasoning of the A/E. They can challenge the architect’s pronouncements to the construction manager who will often give them a one sided hearing. If the contractor is dissatisfied with the outcome of that discussion, they have recourse to Article 15 of the General Conditions to the contract and can demand a formal, written decision from a principal of the A/E’s firm, thereby going over the head of the construction administrator. If not satisfied with that decision they can demand mediation and arbitration to resolve the dispute.

Contractors should be pursuing additional compensation for hidden conditions and errors in the plans and specifications under Article 15 of the General Conditions instead of suing architects and engineers for negligence. If the owner is unfairly burdened by the change order costs they will settle their differences  with the A/E based on their mutual agreement.

The demise of Privity of Contract and exceptions to the economic loss rule has made the risk-benefit of contract look precarious to design professionals. As a result, many architects and engineers have considered joining contractors in design-build relationships that will provide the security they lost in the demise of privity. Unfortunately, this leaves no one except the design-builder to oversee the standards of the plans and specifications. It would be better if there were a third party to do the watching.

(Author’s note: The reader should not conclude from this article that I do not respect the overwhelming majority of contractors who are every bit as professional as their architect and engineer counterparts. I have enjoyed working with hundreds of professional contractors who have spent years acquiring the skills and knowledge needed to pursue their professions. Further, research and conclusions in this two-part article are for informational and educational purposes only and are not intended as legal recommendations.)

Paul Potts is a technical writer and construction administrator. He has worked in the construction industry as an independent contractor and administrator for architects, engineers, and owners in Michigan. Potts can be contacted via e-mail at

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