Q. We signed a contract to provide architectural colored pre-cast panels for a high-profile project. The contract's specification called for the finished product's exterior surface to be a light tan color, with a lightly sanded surface texture.
We met with the architect and owner several times while the bidding process was underway. We provided photos from our recent projects that featured a similar look and finish.
Our problems began after they awarded us the project. We cast a test panel using our normal production technique. When the architect arrived at the site, he rejected the panel because it wasn't exactly the finished texture he expected. In the last few months, we have cast two or three different versions, but the architect has yet to find one acceptable.
We have reached an impasse, and the architect is threatening to litigate for non-performance and hold us accountable for any delays. Any suggestions?
A. You may classify the situation you describe as a potential non-performance of a performance directive. It's important that you solicit legal council to review the contract's language and its ramifications.
Producers often find that conforming to a poorly written or very broad specification can become an almost impossible task. In this type of dispute, the measure of culpability isn't based on whether the task is too difficult or just impossible to achieve. Judgment is normally determined by what both parties contemplated when the contract was signed. Most courts would interpret your accepting the contract to suggest that you thought you'd be able to exercise ingenuity in achieving the project's objective.
But the legal system does provide some protection. In Interpreting Construction Contracts: Fundamentals Principals for Contractors, Project Managers and Contract Administrators, authors H. Randolph Thomas and Ralph Ellis described a similar circumstance in which the producer on a project had legal protection.
The book's authors write that a performance specification is defective if the requirement task is either an absolute impossibility, requiring something beyond the state of the art, or commercially impractical, as the work could be accomplished at great cost.
But the burden of proof is on the producer or contractor who agreed to perform the task or supply the product. They must show that the difficulty was far beyond what was expected. They must also show that they have considered alternative methods or technologies.
In the case of Blount Brothers Corp. v. United States, the architect on a large project was dissatisfied with the color of an aggregate selected for the decorative concrete panel. Trying to solve the impasse, Blount Brothers searched a five-state area looking for a suitable aggregate. When this failed, they asked the owner's agent to provide a suitable option. The agent also couldn't find one. Even so, the owner sued Blount Brothers for non-performance, claiming blount was unable to procure the satisfactory aggregate.
The court ruled in favor of Blount, saying they had met the burden of establishing legal impossibility by proving the contract specification as it was written was defective.
Source: H. Randolph Thomas and Ralph D. Ellis, Interpreting Construction Contracts, Fundamentals Principals for Contractors, Project Managers and Contract Administrators, ASCE Press, 2007.