The “acceptance doctrine” was applied in a negligent construction tort case to dismiss a homeowner suit against the contractor that built the original homeowner. The new homeowner purchased the home under an “as is” agreement and soon after purchase discovered evidence that the roof and HVAC system were negligently constructed. Liability for injuries caused by readily observable defects is shifted by this doctrine away from the contractor and onto the owner at the moment of acceptance of the defective work by the original owner. Thomaston Acquisition, LLC v. Piedmont Construction Group, Inc., 306 Ga. 102 (2019).
As explained by the court, many states have moved away from the acceptance doctrine and now apply a foreseeability doctrine that has no privity of contract requirement. But Georgia adheres to the acceptance doctrine, which provides:
“[A]n independent contractor is not liable for injuries to a third person, occurring after the contractor has completed the work and turned it over to the owner or employer and the same has been accepted by him, though the injury result from the contractor’s failure to properly carry out his contract.”
One exception to the doctrine is that it will not be applied to bar a third party’s claim for injuries suffered as a result of a defect that is hidden from reasonable inspection. Although it lacked privity of contract with the construction contractor, the new homeowner argued it should be treated like the original owner because it is the current owner of the property. In rejecting that argument, the court stated this would undermine the acceptance doctrine’s foundational purpose of shielding contractors from liability for injuries occurring after the owner has accepted the completed work.
The court explained the reason for the doctrine is that a contractor has no authority to inspect or make changes to the property after it completes its work, and may not be authorized to even enter the premises. This reasoning was particularly applicable under the facts of the instant case, where:
“The original owner could have refused to accept the work altogether or accepted it on the condition that the appellees would repair any readily observable defects. But the original owner did not do that; it accepted the apartment complex, and upon that acceptance, all liability for readily observable defects shifted from the appellees to the original owner. After that time, the appellees had no control over the property and no authority to repair or maintain it. When the original owner sold the complex [ ] – two years after construction was completed, turned over to, and accepted by the original owner – the liability did not shift back to the appellees.”
As far as fairness to new owners, the court said subsequent purchasers can protect themselves by adequately inspecting and refusing to purchase defective property or demanding repairs by the seller before closing. Moreover, they didn’t have to purchase the property with an “as is” contract that cut off potential rights against the seller.
About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with ConstructionRisk Counsel, PLLC) representing design professionals, contractors and project owners. He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects. He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk.com Report, Vol. 21, No. 9 (Oct 2019).
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