It’s never fun getting sued, especially when you didn’t do anything wrong. That was the situation for Otis Elevator in a recent case. In this post we’ll look at the problem created by poorly drafted plans and specifications. In the next post we’ll review the impact of contract language that says the architect is the final decision maker on all issues.
A small airport was expanding and needed to add four escalators. All bidders were asked to bid according the architect’s plans and specifications. The plans did not make clear the width of the steps and Otis Escalator, along with another bidder, submitted a bid based on a 32 inch step width. Otis was selected as the lowest bidder, but before the contract was finalized, Otis’ shop drawings were reviewed and approved by the general contractor and the architect. The shop drawings made clear that Otis was installing a 32 inch step. At no point during submittal and review did the architect or general contractor object to the proposed step width.
Otis ordered the escalators and the general contractor constructed the areas around the escalators to accommodate the 32 inch stair width. When the work was nearly complete, the owner objected to the stair width, claiming that the escalators’ steps were supposed to be the same width as the existing escalators, 40 inches. A meeting was held and the general contractor wrote the owner afterwards concluding that the escalators complied with the contract documents.
The owner disagreed and threatened the general contractor with liquidated damages. The general contractor then changed its position and told Otis that the escalators did not conform to the contract. A change order was issued and Otis agreed to do the work, but did so under a reservation of rights. The general contractor refused to pay Otis for the additional work and Otis sued.
How did the court decide?
The court decided that the contract documents were ambiguous because they did not specify the width of the escalators. The general contractor argued that certain tick marks and dots on the drawing, in addition to the scale, showed that the escalator should have been 40 inches wide. The court disagreed, finding that the scale was off 3 to 3 ½ inches.
The court concluded that the plans were ambiguous and Otis was well justified in submitting a bid for a 32 inch step. The court also found it significant that both the contractor and the architect approved Otis’ plans that clearly showed a 32 inch stair width. Based on these conclusions, the court found that Otis did not breach the contract and was entitled to be paid for the work performed in installing the 40 inch escalator.
Make sure your bid complies with the plans and specifications. And, keep any approvals of your shop drawings to defend again challenges that your work is incorrect. But, also know that you may still get sued for doing the work that was approved.