Differing & Unforeseen
Conditions
Differing Site Conditions- actual
conditions differ from the
representation made in the contract
documents (MSP airport)
 Unforeseen Condition- unusual
situation not reasonably anticipated
based on contract documents

Differing & Unforeseen
Conditions
Contractor is awarded damages for
differing site conditions
 Contractor NOT awarded damages
for unforeseen site conditions unless
they rise to the level of practical
impossibility, commercial
senselessness, or there is contract
language transferring risk (common)

Differing & Unforeseen
Conditions
If the contract is silent, then ONLY
unforeseen conditions can arise
 Unknown physical condition of an
unusual nature that differs
materially from those ordinarily
encountered (buried tank example)
 Doesn’t cover weather, economic
condition, market factors, etc.

Differing & Unforeseen
Conditions

Owner is liable only if
Risk transfer clause is executed a priori
 Objective or practical impossibility
 Tort claim arises
 Ambiguous contract could be
interpreted as differing (not
unforeseen)

Differing & Unforeseen
Conditions

Unforeseen site conditions clause is
standard in most contracts. Can be
invoked if
Condition is unknown to contractor
 Condition is unusual
 Condition is materially different

Differing & Unforeseen
Conditions
Objective or practical impossibility
was covered in chapter 8
 Nondisclosure- owner has a duty to
report (widely recognized by most
courts) soil borings is example
 Tort claim- additional contract
clauses to deal with torts (fraud,
negligence, misrepresentation)

Differing & Unforeseen
Conditions
Ambiguity- need interpretation of
whether the condition is unforeseen
or differing (transfer clause
eliminates distinction in most cases)
 Prebid site inspection- required in
most contracts. Visible conditions
cannot be later claimed as
unforeseen or differing

Warranties



Special contract guaranteeing quality or
performance
Express warranties- expressed by the
terms of a contract, generally written,
with guarantees contained in the contract
(subs supply many)
Implied warranties- added into a contract
by law. Must no law to act on the
warranty (3-day revocation period)
Warranties

Express warrantycan be oral, but hard to enforce
 Oral is unenforceable beyond one year
 Installer versus supplier warranties
 Many owners prefer distributor or
manufacturer warranty because less
likelihood of default (roofs, windows)

Warranties

Types of implied warrantiesSpearin warranty- owner “implies” the
plans and specs are complete and
sufficient for construction
 Contractors warranty- “good and
workmanlike” standard of construction
 Merchantability of goods warranty
 Fitness for Purpose warranty

Warranties

Contractors warrantyGood and workmanlike manner
 Case law interpretation
 Different jurisdictional standards
 Habitability standard prevails
 Roof and window leaks are examples

Warranties

Merchantability of GoodsUCC statute
 Sale of goods by manufacturers and
commercial sellers
 Like quality and performance for goods
used for similar purpose
 Used for appliances, HVAC equip,
hardware, etc.

Warranties

Fitness for Purpose Warranty
UCC statute
 Similar to merchantability warranty, but
for a specific purpose
 No “like quality standard” exists
 Sold for a specific use
 Some types of pumps, conveyance
systems, etc.
