An article published in several sources entitled “How to navigate the subtleties of Contract Warranties” has some implications for consulting engineers.
Written by Christopher E. Hirst of the Vancouver law firm Alexander Holburn, Beaudin + Lang, together with Norm Streu, president and chief operating officer of the LMS Reinforcing Group, the article discusses the case of the Greater Vancouver Water District v. North American Steel and Pipe Ltd.
The GVWD and its consultants had prepared design and specifications for the materials which North American Steel and Pipe supplied.
The steel pipes proved to be faulty because of their design, but the court found North American, who had relied on the consultants’ design, liable for damages.
The article deals with complex issues of assigning risk in contracts, but the authors point out: “What makes this case particularly interesting or, perhaps alarming depending on your point of view, is that North American was found liable for supplying a pipe that had been constructed in accordance with the design supplied by GVWD even though that design was defective. In essence, North American agreed, perhaps unknowingly, in the warranty provisions to assume the design risk associated with the GVWD’s design.”
The article was originally written on behalf of the Vancouver Regional Construction Association for a news feature in Business in Vancouver. It now appears on the Alexander Holburn, Beaudin + Lang website. Click here.