Failure to respond within a reasonable time falls short of a reasonably acceptable standard of practice. By neglecting to reply to the clients in these circumstances, the defendant breached its professional duty as an architect.

No implied term in contract between architect and client regarding construction costs

by Paul Sandori

Blair v. Gren Weis Architects and Associates

Clients retained architects to design new home • no direction given about specific limits of size of the house • clients claimed cost of building design was beyond their budget and sued architect for breach of contract and negligence • no breach of contract as no implied term that would impose an obligation regarding construction costs • architects did breach professional duty for failure to reply to clients

In 2001, Edward and Mary Blair retained Gren Weis Architects and Associates (GWA) to design their new home in Oakville, Ontario. GWA delivered detailed plans to the Blairs in May 2002 and received approximately $31,000 in fees.

Ultimately, the Blairs did not use these plans. They claimed the cost of building GWA’s design was beyond their budget so the plans were of no use to them. They sued GWA for breach of contract and claimed damages of $50,000. In the alternative, they claimed the same amount based on the tort of negligence.

The Blairs claimed the parties had agreed initially that the cost of construction would be about $400,000 and later increased the budget to $550,000. In October 2002, they received quotes from contractors in the range of $750,000 to $900,000.

Gren Weis, architect and principal of GWA’s firm, testified that if the Blairs had suggested a budget of $550,000 he would have told them that would not be sufficient for the kind of home they wanted.

Justice Seppi accepted that the Blairs were initially thinking they could build for around $400,000 to $550,000 but not that they told the architect that amount was their budget. He found they were taking a “wait and see” approach as the plans were being developed. In the meantime, their concerns were for larger rooms and design details to accommodate their lifestyle.

There was no direction given to GWA about specific limits of the size of the house. In one e-mail, GWA noted that the house was going to be 4,260 square feet, plus a 2,660 square feet heated basement and 1,120 square feet garage/shop. Mr. Blair was shocked that the house was “becoming a monster”. Even then, however, the size did not trigger any comment from the Blairs about the budget.

The contract between the parties included the Canadian Standard Form of Agreement Between Client and Architect but lacked many particulars. None of the parties expressed any concern about this. The standard form also included the following provision:

This Agreement represents the entire and integrated agreement between the client and the architect and supersedes all prior negotiations, representations, or agreements, either written or oral. This Agreement may be amended only by written instrument signed by both client and architect.

When the preliminary drawings were given to the Blairs for approval, GWA recommended that they take the drawings to a contractor to get an estimate of the cost of construction. The Blairs decided not to follow the architect’s advice but rather to invite tenders for the project based on the final drawings.

The Blairs had the summer of 2001 to review the preliminary drawings. In numerous e-mails, Mr. Blair requested changes or modifications yet, at trial, he said he did not understand the extent and complexity of the design. On the contrary, the court found that in the exchanges between client and architect both parties appeared to clearly understand the specific requests for modifications.

In May 2002, the Blairs paid GWA’s final invoice subject to a minor deduction. There was no communication between the parties between May and October while the Blairs put the plans out to tender. GWA did not dispute the reduced payment nor did the firm respond to a letter from the Blairs dated October 10, 2002 complaining about the excessive cost of construction.

The Blairs had a meeting with GWA in February 2003. Mrs. Blair testified she was told that the firm was too busy to modify the plans until July 2003. Justice Seppi found that such a response was highly improbable. He accepted as more likely GWA’s evidence that the firm was busy, but still prepared to accommodate the Blairs. GWA did not hear from the Blairs after the February meeting.

The next communication from the Blairs was a letter to Gren Weis dated March 16, 2003. The letter complained that GWA had led them to believe that the house could be constructed “within a reasonable margin” of $550,000. The letter requested a reply from GWA by March 21, 2003 “with details on how you are going to remedy the situation”.

GWA did not respond within the stipulated time. On May 30, 2003, Weis wrote to the Blairs that “we are prepared to work with you in revising the scope and size of your new residence….” The Blairs did not reply. By then, they had retained a new architect.

Breach of Contract

The key issue before the court was whether a budget of approximately $550,000 was an implied term of the contract between the Blairs and the architect.

The judicial power of implying terms into existing contracts must be exercised with care, said Justice Seppi. He found that the normal reasons for implying terms were missing in this case. He said:

The agreement in the case at bar does not require a term limiting the cost of construction to give it effect or business efficacy. The term is also not necessary to avoid unfairness between the parties or to achieve a commercially rational solution. By its terms the architect agrees to provide architectural services for a certain fee structure. Though the standard form agreement allows for delineating a construction budget and estimating costs at various stages of the process, neither party to the agreement is stated to be responsible for construction budget, cost estimating services, or estimate of construction.

The standard form contract also uses terminology which suggests the task of estimating construction costs may, or may not, be included as one of the architect’s responsibilities.

The court found that GWA had fulfilled all its contractual obligations. It had followed the clients’ instructions and delivered the final plans. It was neither necessary nor appropriate to imply a term into the contract between client and architect that would impose an obligation regarding construction costs — an obligation that was not imposed or discussed between the parties when the contract was originally made.

Negligence

The Blairs also claimed that GWA breached its professional duty to them by failing to inform them of the construction costs at an early stage of the design, and by failing to ensure the design met their expectations regarding construction costs. Furthermore, they made claims regarding the scope of the architect’s duty to monitor and modify the design to ensure it met the clients’ expectations as the project proceeded.

Justice Seppi decided that GWA discharged its duty when it recommended to the clients that they obtain estimates once the preliminary drawings were completed. This was the firm’s normal practice and there was no evidence that this was not in accordance with the normal and accepted standard of care to be expected of a reasonably diligent and responsible professional architect.

However, in October 2002, GWA was informed in writing that the Blairs were unhappy with the plans but it did not respond. “…[I]t is plain and obvious that a failure to respond to a specific concern about the design falls short of what a reasonably responsible architect should do,” commented the judge. “Failure to respond within a reasonable time, and if possible to rectify the design, falls short of a reasonably acceptable standard of practice,” she concluded. By neglecting to reply to the clients in these circumstances, GWA breached its professional duty as an architect.

The court awarded the Blairs the sum of $14,461 representing the loss of certain fees paid for building permits and some rental losses caused directly by GWA’s breach of duty.

Ontario Superior Court of Justice
   S.S. Seppi J.
   March 31, 2006