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Tag: implied obligation

Apr 28, 2022

A Century Later: Implied Duty of Good Faith and Fair Dealing Still Going Strong

Parties to construction contracts are often surprised to learn that they are bound to implied unwritten contract obligations in addition to the written terms of their contracts. Courts in the United States began to recognize certain implied contract obligations about 100 years ago in circumstances where application of the common law rules of contract formation and interpretation would lead to results that the parties to the contract clearly did not intend.  As a result, the courts required that the implied contract obligations be consistent with and necessary to carry out the express terms of the contract, such that it could… Read more

Jan 7, 2015

The Spearin Doctrine: Determining Who Bears the Construction Risk of Design Errors

All owners, contractors, and subcontractors should carefully negotiate contract clauses that govern their relationships. In addition, all construction participants should be aware of the many implied obligations in construction contracts. An implied obligation is one that is not expressly stated in a contract but implied, by courts, arbitration panels, and dispute review boards. One such implied obligation is the implied warranty of the adequacy of the plans and specifications, also known as the Spearin Doctrine. Before the turn of the 19th century, the law generally placed all construction risk on contractors, except in the event that their contract expressly stated… Read more