Reprinted with permission from the August 12, 2025, edition of The Legal Intelligencer. © 2025 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
In construction, deviations from design specifications are expected. However, distinguishing acceptable deviation from actionable nonconformance involves nuanced engineering and legal considerations. Differentiating between a deviation, deficiency and defect becomes crucial for ensuring performance, resolving disputes and achieving successful outcomes. This practical guide helps industry professionals better understand how to navigate and resolve performance issues that occur during project execution when things don’t go as planned.
Deviation
A deviation is a variation from a specified characteristic or procedure. Industry-standard tolerances define the acceptable variations in construction, including material properties, component and assembly dimensions, and workmanship. Design specifications, especially for complex construction projects, must address relevant trade tolerances and ensure the compatibility of tolerances at the interfaces of different building systems.
The first step is to understand the nature of the deviation and the relevant tolerance standard, and to verify the technique and reliability of measurement or quantification of the deviating condition. From both engineering and legal perspectives, construction that deviates from a specified characteristic or procedure but remains within the applicable tolerance meets the project requirements. These conforming deviations require no further action.
When construction is found to deviate beyond the applicable tolerance, termed a nonconforming deviation, interdisciplinary collaboration is critical to strategize a path toward resolution. Engineering assessments must be aligned with contractual obligations, and legal strategies must be informed by technical realities.
Deficiency
An engineering assessment is necessary to determine how a nonconforming deviation has affected safety, serviceability or durability compared to the specified requirements and whether remedial action is needed. This detailed technical analysis examines the construction and the intended specified performance and considers the inherent robustness of the component, which stems from simplified or prescriptive engineering methods used to expedite design and construction detailing for efficiency and economy.
Often, an engineering assessment can show that a nonconforming deviation has little or no impact on the intended performance, making remedial action unnecessary. When an engineering assessment reveals that a nonconforming deviation reduces performance below the specified level, remedial action must be taken to restore performance. We’ll use the terms tolerable nonconforming deviation and deficiency to distinguish the former from the latter.
While engineering may tolerate certain deviations, contracts often do not. Most construction agreements include strict compliance clauses; failure to meet design specifications constitutes a breach. Whether the deviation results in financial liability depends on “materiality,” meaning whether the damage affects the value received by the owner and the extent of the damage.
Additional legal concepts to consider include:
- Deviation Approval Protocols: Construction contracts typically require the contractor to notify the owner of any deviations, allowing for assessment and a determination of their materiality in terms of function and contractual compliance. Contracts often give the owner (or its engineer/architect) the authority to accept or reject deviations.
- Notice to Cure: A deviation exceeding tolerance is considered a deficiency. The owner can reject the work and issue a notice to cure. The contractor may be required to correct the work or pay damages to compensate the owner for the diminution in value caused by the deficiency. Owners must allow contractors to address deficiencies before pursuing remedies.
- Economic Waste Doctrine: The relief an owner may receive for a deficiency depends on its materiality. De minimis deficiencies may have little effect, or the cost to repair or replace may far exceed the benefit. When the cost to correct is disproportionate to the benefit granted to the owner, a court may invoke the economic waste doctrine and limit recovery to the lesser of the repair cost or the diminution in value, rather than allowing tearing out the work and rebuilding it.
Case Study 1: Cast-in-Place Concrete Construction
During construction of an approximately 90,000-square-foot cast-in-place transportation facility, sections of a 10-inch concrete one-way slab were found to be thinner than specified and to have less concrete cover over the reinforcement than specified—two distinct nonconforming deviations. The owner expressed concerns about the structural integrity and long-term durability of the entire concrete slab. Contractually, the contractor’s work was required to strictly conform to the design specifications. About 20% of the thickness and over 40% of the concrete cover did not meet contractual requirements. Establishing a technical baseline for the as-built slabs was essential to resolving these issues.
A rigorous engineering analysis based on as-built slab thickness and reinforcement positions demonstrated that the slabs had sufficient flexural and shear strengths at critical sections to satisfy both the building code and project-specific load requirements. Regarding durability, a probabilistic, performance-based assessment of time to corrosion revealed that only 9% of the as-built slab area experienced reduced durability performance compared to the specifications. Additionally, analysis showed applying a silane sealer every 10 years could reduce corrosion risk, providing a practical and technically sound solution.
The analysis convinced the owner that the slabs did not need to be demolished and that a more practical “fix” could be used. What remained was a dispute over useful life and damages for alleged reduction in useful life and increased maintenance costs.
Defect
A defect refers to work that is unsatisfactory, faulty or deficient because it does not conform to the design or contract specifications, fails to pass inspection or meet other standards or criteria for testing, or has been damaged before the owner takes possession. Legally, a defect may be any nonconformance with contract documents, regardless of whether it affects performance.
Defects are differentiated in the law as patent or latent. Patent defects exist at the time of acceptance and can be discovered through reasonable inspection. Latent defects are not readily discoverable at acceptance, so they remain hidden and may only become apparent over time.
Statutes of limitation and repose govern the timeframes within which claims can be brought and vary significantly by jurisdiction. Failing to file suit within the applicable statute results in forfeiture of claims. An important factor is the date of accrual, which typically coincides with the date the defect is discovered or when, using reasonable diligence, it should have been discovered. Understanding the date of accrual is crucial because it dictates when a statute of limitations commences and when it expires.
Warranties and Remedies Construction contracts include express warranties covering materials and workmanship, with remedies such as repair, replacement for monetary damages. Depending on the specific provision, warranties may be the exclusive remedy for an owner in the event of a defect or may supplement other implied warranties and common law rights. For example, a warranty may provide that all work must be good quality, new and free of defects or that it will meet certain technical standards specified in the contract. If a contractor breaks that promise, it will lead to a claim for breach of warranty.
Key legal concepts include:
- Scope and Duration of Warranty: What work is covered, and for how long? Contracts often establish a limited warranty that covers only certain types of work for a limited duration. Understanding these limitations is essential to protecting one’s rights.
- Remedies: Contracts may provide specific forms of relief for defective work. These remedies may give the owner the right to stop work and reject (and not pay for) defective work or accept defective work at a reduced price. Alternatively, it may require the contractor to perform corrective actions, such as repairing or replacing defective work, or pay damages if another contractor is hired to perform remediation. Damage remedies are typically measured by the difference in value between the contracted performance and the actual performance delivered.
- Failure of Essential Purpose: If a warranty remedy fails to resolve the issue, broader contractual remedies may be pursued. Other provisions in the construction contract may require the contractor to perform work according to the contract documents and a prevailing standard of care. A contractor’s failure to perform may lead to other contractual remedies or common law causes of action, including breach of contract, negligence or violation of the standard of care.
Case Study 2: Hydroelectric Power Equipment
A critical component (discharge ring) failed to meet its 40-year fatigue life requirement, cracking shortly after installation. Despite repeated alleged repairs by the manufacturer, the defect persisted. The owner pursued damages under the warranty, arguing that the warranty remedy— i.e., the repair—failed in its essential purpose because the underlying design and manufacturing were so defective that the repairs did not and could not satisfy the 40-year fatigue life requirement.
Conclusion
Navigating performance issues in construction requires more than just identifying when work does not conform to plans or specifications; it demands a collaborative, informed approach that links engineering realities and legal obligations. Distinguishing between deviations, deficiencies and defects is crucial for determining whether remedial action is necessary and what remedies are available. Ultimately, resolving these issues will require an early technical investigation, clear contractual understanding and strategic legal positioning. By recognizing the relationship between tolerances, performance expectations and legal consequences, construction professionals can better manage risk, protect their clients’ interests, and avoid unnecessary conflicts and economic waste when things don’t go as planned.
This article was co-authored by Charles Russo, a principal at Russo Consulting, who focuses on forensic structural investigations and resolving construction-related disputes. He may be reached at charlie@russoconsultingllc.com.