Liability of Various Parties in Construction Disputes

folder_openNews, Real Estate

Liability of Contractor to Second Purchaser

Under Alabama law, a second purchaser of a home cannot bring a claim for defects against the contractor who originally built the home. This is based on the longstanding role that the doctrine of caveat emptor applies to subsequent purchasers of a house. Boackle v. Bedwell Const. Co., Inc., No. 1980392, 2000 WL 378191 (Ala. April 14, 2000); Wells v. Clower’s Construction Co., 476 So. 2d 105 (Ala. 1985); Wooldridge v. Rowe, 477 So. 2d 296 (Ala. 1985); Lee v. Clark & Associates Real Estate, Inc., 512 So. 2d 42, 45 (Ala. 1987).

Liability of Contractor for Home Built for Personal Use

The doctrine of caveat emptor applies in cases where the seller of a home was also the original builder of the home if the builder lived in the home before selling it. O’Connor v. Scott, 533 So.2d 241, 243 (Ala. 1988); Stoner v. Anderson, 701 So. 2d 1140, 1145 n.1 (Ala. Civ. App. 1977)(“Our Supreme Court has held that a house was a ‘used’ residence where a builder had constructed it for his own personal use and had lived in it for almost two years before selling it.”).

Liability of a Developer to Owner

A developer is generally not liable for a claim of negligence and suppression brought by a residential homeowner who purchased their home from a contractor and had no contractual relationship with the developer. DeAravjo v. Walker, 589 So.2d 1292 (Ala.1991); Jones v. Whitt, 676 So.2d 313, 316 (Ala. Civ. App. 1995).

Liability of the Seller of Land

Alabama law recognizes no implied warranty of habitability related to the sale of land. Scott v. Gill, 352 So.2d 1143, 1145 (Ala. Civ. App. 1977).

Liability of Contractor for Personal Injuries or Negligent Acts of Third Parties

As a general rule, neither a premises owner nor a general contractor is responsible for the negligent acts of an independent contractor. Bell v. Sugarwood Homes, Inc., 619 So. 2d 1298, 1301 (Ala. 1993); Clark v. Jackson, 549 So. 2d 85 (Ala. 1989) (“[T]he Alabama cases hold as a general rule that a prime contractor is not liable for the acts of an independent subcontractor whom he has employed.”); Joseph Land & Co., Inc. v. Gresham, 603 So. 2d 923 (Ala. 1992); Fuller v. Tractor & Equipment Co., Inc., 545 So. 2d 757 (Ala. 1989); General Finance Corp. v. Smith, 505 So. 2d 1045 (Ala. 1987)).

Liability of Contractor or Subcontractor for Latent Defects in Products

Alabama law is generally silent on this issue, but according to 13 American Jurisprudence 2d, Building and Construction Contracts §27 (1997), and Wood-Hopkins Contracting Co. v. Masonry Contractors, Inc., 235 So. 2d 548 (Fla. Ct. App. 1970), a contractor is not liable for latent defects in products that he uses, and he is not answerable to the owner for the latent defect or liable for the amount of damage to the building caused by such defect. See also 17A Corpus Juris Secundum, Contracts § 515, p. 857 (“a builder is not liable for the result of latent defects in material purchased from a reputable dealer”), and 61 A.L.R. 3d 792 § 3, Liability of Builder or Subcontractor for Insufficiency of Building Resulting From Latent Defects in Materials Used (1975) (“a builder makes no implied warranty against latent defects in materials which he uses in construction and . . . the builder is not responsible for the insufficiency of a building resulting from such defect where he had no knowledge of the defect, acted in good faith, and exercised reasonable care and skill.”).

Liability to Parties Without Privity of Contract

Issues sometimes arise as to whether a contractor can bring suit against an owner or architect even though no contract existed between them.

Breach of Contract

Under Alabama law, one who is not a party to a contract generally cannot sue for its breach. E. C. Ernst, Inc. v. Manhattan Const. Co. of Texas, 551 F.2d 1026, 1030 (5th Cir. 1977) (applying Alabama law). However, third parties may sue on the contract if the provision is intended for their direct, as opposed to incidental, benefit. Additionally, if the contract “specifically states that a third party shall have no legally enforceable rights in the agreement, a court must effectuate the expressed intent by denying the third party any direct remedy.” Federal Mogul Corp. v. Universal Const. Co., 376 So.2d 716, 724 (Ala. Civ. App. 1979); Sheetz, Aiken & Aiken, Inc. v. Louverdrape, Inc. 514 So.2d 797, 803 (Ala. 1987) (affirming motion to dismiss of subcontractor in claim brought by architect); Sheetz, Aiken & Aiken, Inc. v. Spann, Hall, Ritchie, Inc., 512 So.2d 99, 102 (Ala. 1987) (affirming summary judgment and finding that developer had no breach of contract claim against architect with whom it had no contract).


A contractor or subcontractor may have a claim against an owner or architect for negligence even though they had no contract with them. Berkel and Co. Contractors, Inc. v. Providence Hosp., 454 So.2d 496, 501 (Ala. 1984). Alabama courts have rejected the absence of privity of contract as a defense to a negligence action. Federal Mogul Corp. v. Universal Constr. Co., 376 So.2d 716 (Ala. Civ. App.1979); E.C. Ernst, Inc. v. Manhattan Constr. Co. of Tex., 551 F.2d 1026 (5th Cir.1977), cert. denied, 434 U.S. 1067, 98 S. Ct. 1246, 55 L.Ed.2d 769 (1978); Zeigler v. Blount Bros. Constr. Co., 364 So.2d 1163 (Ala. 1978). In deciding whether to impose a duty in a construction context, Alabama courts are likely to analyze six factors: (1) The extent to which the transaction was intended to affect the other person; (2) the foreseeability of harm to him; (3) the degree of certainty that he suffered injury; (4) the closeness of the connection between the defendant’s conduct and the injury; (5) the moral blame attached to such conduct; and (6) the policy of preventing future harm. Howe v. Bishop, 446 So.2d 11 (Ala. 1984).

Related Posts