## Facts

- R.R. Beaufort & Associates, Inc. (Beaufort) built a residence in 1983 and sold it to Beaufort’s cousin, Debra Cronin.
- Soon after Cronin bought the home, she noticed large cracks in the garage floor; Beaufort poured a new garage floor that same year.
- In 1985, Cronin sold the home to the Nichols (plaintiffs), who built an addition onto the house that year.
- In 1988, the garage floor caved in.
- In 1991, additional cracking appeared in the walls of the addition, the kitchen, and the garage.
- The Nichols hired an engineering firm, which concluded the home’s foundation had been built on unstable soil that included voids and organic material that decomposed over time, causing settlement, cracking, and collapse.
- The Nichols sued Beaufort in 1994, alleging negligent construction, negligent violation of building-code requirements, and breach of implied warranties.
- Beaufort moved for summary judgment, arguing the Nichols lacked contractual privity because they purchased from Cronin rather than directly from Beaufort.
- The Superior Court granted summary judgment for Beaufort, and the Nichols appealed.

## Issues

1. Whether subsequent purchasers of a home, lacking contractual privity with the builder-vendor, may sue the builder in negligence for latent structural defects allegedly caused by negligent construction.
2. Whether a builder-vendor owes a duty of reasonable care, including compliance with applicable building codes, to subsequent purchasers who foreseeably may be harmed by latent defects.
3. Whether claimed losses tied to physical damage to the house itself (repair costs and related property damage) may be pursued in negligence, or are barred as purely economic loss.

## Decision

- The Rhode Island Supreme Court reversed the grant of summary judgment for Beaufort.
- The court held that lack of contractual privity does not bar subsequent purchasers from bringing negligence claims against a builder-vendor for latent structural defects.
- The court concluded that a builder-vendor who constructs a residence for sale owes a duty of reasonable care in construction, including compliance with building-code requirements, to later purchasers who may foreseeably be injured by latent defects.
- The court ruled that the Nichols had presented triable issues on negligent construction and negligent building-code violations, making summary judgment improper.
- The case was remanded for further proceedings consistent with the opinion.

## Legal Principles

- A builder-vendor’s duty in tort turns on foreseeability and standard negligence principles; contractual privity is not a required element for a later purchaser’s negligence claim based on latent structural defects.
- A builder-vendor who builds homes for sale must exercise reasonable care in construction; that duty extends to subsequent purchasers when harm from latent defects is reasonably foreseeable.
- Building-code provisions may define the standard of care in residential construction; proof of code violations may support a negligence claim (and, depending on the circumstances, may function as negligence per se or strong evidence of breach).
- Physical injury to real property caused by negligent construction can support tort recovery even when the damage is to the structure itself; the absence of a direct sales contract does not automatically convert such claims into contract-only remedies.
- Implied warranty theories remain more closely tied to the sales transaction and are not extended as broadly as negligence claims to all later purchasers.

## Conclusion

Nichols v. R.R. Beaufort & Associates, Inc. holds that subsequent home purchasers may sue the builder-vendor in negligence for latent structural defects and related building-code violations even without contractual privity; the Rhode Island Supreme Court therefore reversed summary judgment for the builder and remanded for litigation on the merits.


Nichols v. R.R. Beaufort & Associates, Inc., 727 A.2d 174 (1999)