Legal Definitions - design-specification contract

A design-specification contract (also known as a build-to-print contract) is a type of agreement where one party, the client, provides the other party, the contractor, with complete and detailed designs, blueprints, or specifications for a product, structure, or system. The contractor's primary responsibility under this contract is to manufacture, construct, or develop the item precisely according to these provided plans and specifications.

In such a contract, the contractor is generally not responsible for the suitability, functionality, or effectiveness of the design itself. Their obligation is to accurately execute the design as given. The risk for any flaws or deficiencies inherent in the design typically remains with the client who provided the specifications, assuming the contractor followed the plans correctly.

Here are some examples illustrating a design-specification contract:

• Manufacturing a Component: An aerospace company needs a specific bracket for its new aircraft model. They provide a manufacturing firm with detailed computer-aided design (CAD) files, material specifications, stress tolerances, and quality control parameters for the bracket. The manufacturing firm agrees to produce 10,000 units exactly according to these specifications. If, after production, the bracket fails a stress test due to an inherent flaw in the original design (e.g., it was designed too thin for the intended load), the manufacturing firm is not liable, provided they produced the brackets precisely as specified. Their responsibility was to build to the provided design, not to validate the design's efficacy.

• Constructing a Custom Home: A homeowner hires a general contractor to build a custom house. The homeowner has already engaged an architect who produced comprehensive architectural drawings, structural engineering plans, and detailed material schedules for every aspect of the house, from the foundation to the roof. The general contractor's contract specifies that they must construct the house strictly in accordance with these detailed plans. If, upon completion, the homeowner finds that a particular room is too small or a window placement is inconvenient, this is a design issue stemming from the architect's plans, not a failure by the contractor, assuming the contractor built the house exactly as the plans dictated.

• Developing a Software Module: A large retail corporation commissions a software development company to create a new inventory management module for their existing enterprise system. The corporation provides the development company with extensive technical specifications, including database schemas, user interface mockups, API integration points, and detailed business logic rules. The development company's contract obligates them to code the module precisely as described in these specifications. If, after delivery, the module performs slowly because the specified database structure was inefficient for the volume of data, the development company is not at fault, as long as they implemented the database structure exactly as specified in the design documents.