## Facts

- A public school district retained an architectural firm to design a new school and to prepare plans, drawings, and specifications for inclusion in bid documents.
- The district solicited construction bids using the architect’s design documents.
- A general contractor relied on the architect’s plans and specifications in preparing its bid, was awarded the contract as the lowest responsible bidder, and entered into a construction contract with the district incorporating the architect’s documents by reference.
- The contractor alleged the design documents represented that certain systems were constructible using normal, reasonable construction methods, but the contractor later discovered special methods were required.
- The contractor claimed it incurred substantial additional costs and sought recovery for purely economic loss (no personal injury or property damage).
- The contractor sued the architect for negligent misrepresentation, alleging justifiable reliance on negligently prepared plans and specifications.

## Issues

1. Whether a contractor may recover purely economic losses from an architect for negligent misrepresentation in plans and specifications when there is no contractual privity.
2. Whether the economic loss doctrine bars a negligent misrepresentation claim for purely economic damages where the claim is pleaded under Restatement (Second) of Torts § 552.
3. Whether an architect supplying plans and specifications for bidding is within the class of professional “information suppliers” subject to § 552 liability to a limited class of intended users.

## Decision

- The Supreme Court of Pennsylvania reversed the dismissal and remanded.
- The court adopted Restatement (Second) of Torts § 552 as Pennsylvania law governing negligent misrepresentation claims for pecuniary loss caused by justifiable reliance on negligently supplied information.
- The court held that § 552 provides a limited exception to the economic loss doctrine for professionals in the business of supplying information for others’ business transactions.
- The court held privity is not required where the plaintiff is within the limited class of persons for whose benefit and guidance the information was supplied and whose reliance was intended or known.
- Accepting the pleaded allegations as true at the demurrer stage, the contractor stated a viable § 552 negligent misrepresentation claim against the architect.

## Legal Principles

- Pennsylvania recognizes negligent misrepresentation liability under Restatement (Second) of Torts § 552 for pecuniary loss caused by justifiable reliance on information negligently obtained or communicated in the course of a profession or business.
- The economic loss doctrine does not bar a properly pleaded § 552 claim; § 552 operates as a narrowly defined exception for negligent misinformation by professional information suppliers.
- Design professionals who prepare plans and specifications for use in soliciting and evaluating contractor bids may be treated as supplying information for the guidance of others in business transactions under § 552.
- Liability under § 552 extends only to a person or limited class of persons for whose benefit and guidance the information is supplied, and only for the type of transaction the supplier intends or knows the information will influence.
- Lack of contractual privity between the information supplier and the relying party does not preclude § 552 liability when the reliance is within the contemplated scope.

## Conclusion

The court permitted a contractor to pursue a negligent misrepresentation claim against an architect for increased construction costs based on reliance on allegedly defective bid documents, adopting Restatement (Second) of Torts § 552 and recognizing a limited exception to the economic loss doctrine for professional information suppliers despite the absence of privity.


Bilt-Rite Contractors, Inc. v. The Architectural Studio, 581 Pa. 454, 866 A.2d 270 (Pa. 2005)