Masonry Magazine September 1964 Page. 11
The Law of Contracts In Relation to Mason Contractors
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your negligence. Does this third party have a claim against you?
In the past, it was the general rule that a contractor could not be held liable for negligence in construction after the acceptance of the work by the owner.
1. There was no contract between the contractor and a third person, and therefore the contractor owned no duty in performing the contract other than to the owner.
2. There would be no end to a contractor's litigation with a third person, if liability did not cease when the work contracted for was accepted.
3. A wise and conservative public policy confines a contractor's liability for negligence in construction of a complicated structure to the owner.
Dissatisfaction with this rule of non-liability led to the use of various exceptions by the courts. The courts have held the contractor liable where the (product) of the work was regarded as inherently dangerous, or where the courts found that the contractor deliberately concealed defects in the work. Gradually, like the English language, the exceptions overshadowed the rule.
Fifteen jurisdictions, however, have recently rejected the rule and its exceptions, and adhered to the decision in the landmark case, Hana v. Fletcher, 97 App. D.C. 310, 231 F. 2d 469, cert. den., 351 989 (1956). In this case, the plaintiff, a tenant, sued the contractor and the owner for injuries received where an iron railing gave way seven years after the contractor repaired it. In overruling the lower court and rejecting the defense that there was no contract between the contractor and the plaintiff, the court stated that a contractor is liable for injuries to a third person occurring after the completion of his work and its acceptance by the owner, where the work is reasonably certain to endanger third persons when negligently prepared or constructed.
The Nevada courts have recently adopted this view (Coseriff Neon Co. vs.Matthews, 371 Pac. 2d 819 (1961)). In this case, the contractor built a brick pylon onto an existing cement base, but did not connect the inside steel rods to the base. The owner accepted the brick pylon, and the plaintiff, a sign contractor, installed a sign on the brick pylon. The next day it collapsed, and the sign was totally destroyed. The plaintiff recovered against the contractor, even after the acceptance of the contractor's work by the owner, on the theory that the contractor is liable for foreseeable injuries caused by his negligent construction.
The adoption of the modern view does not have the effect of making the contractor absolutely liable to third persons without negligence. Thus, one important limitation on the rule is that a contractor is not liable if the defect is obvious, and the owner knows of it, or should have known after reasonable inspection. One court has stated that rule should be limited to the extent that if the owner discovers the danger, or if it is obvious to him, his responsibility supercedes that of the contractor.
Still another problem which frequently arises in dealing with the interpretation of construction contracts is the firm offer puzzler. To put a typical firm offer case, suppose that while the general contractor is preparing a lump sum competitive bid, a subcontractor states that he will hold his subbid open for a specific period, or until after the general contract is awarded. Since he is reputable, and makes the lowest subbid, the general uses it in preference to others in making up his bid, but does not inform the sub that he has done so. The general is awarded the contract. A few days later, the sub notifies the general that he must withdraw his subbid because of a rise in prices.
Was the general justified in relying on this sub's bid? What remedy does he have against the sub? A simple and direct answer of the common law is that he is out of luck- he should have given consideration.
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