What is a design professional’s legal responsibility for an enhancement to her original design?  What if the enhancement is necessitated by a design error and omission?  Welcome to world of betterment, not necessarily a better world, but almost certainly a bettered one.

What is betterment? 

If you are looking for a Texas court or statute to define “betterment”, you will have a long and frustrating search.  While there are cases that reference jury instructions about betterment and there are Texas statutes that discuss “improvements”, there is no definitive case-law or statutory definition of betterment as it applies to construction projects in the State.  To overlay another layer of confusion on the issue, some designers and construction professionals refer to betterments as “value-adds”, “improvements” or just plain “upgrades”.  

So, what is betterment?  At its core, a betterment is a change that is above and beyond the original design, whether that design is expressed in specific details or through the overall design intent expressed in the construction documents.  

Betterment has been tied to the notion of unjust enrichment and restitution.  Like it sounds, unjust enrichment occurs when one person obtains a benefit from another by fraud, duress, or the taking of undue advantage.  Restitution is a measure of damages frequently applied when unjust enrichment occurs. It involves restoring property or money taken from the plaintiff. Put a little more graphically, restitution requires the defendant disgorge any benefits that would be unjust for him to keep. 

Betterment takes these concepts of unjust enrichment and restitution and spins them slightly.  In betterment, the defendant, many times the design professional, seeks to prevent unjust enrichment to the plaintiff, many times the owner, by subtracting costs for items that were not part of the original construction documents or design intent.  

Who pays for betterment? 

Following the logic of unjust enrichment, the party who receives the benefit of the betterment should pay for it.  That is, unless the contract between the parties provides differently, in which case the contract provisions will likely control.  

As most lawyers will tell you, there are fundamental disconnects between how different parties view betterment and who should pay for it.  Part of the disconnect begins with representations, alleged or real, that the owner believes the design professional made during the early stages of the design process.  Those representations can range from express statements like, “the building will last longer than the Parthenon”, to a failure to inform the owner of shortcomings with the design, like a failure to tell an owner that the specified roofing material will not withstand the extreme heat of Texas summers.  

Another disconnect occurs in identifying which enhancements are truly betterments and which are necessary to make the design function properly.  The contract between the parties may also provide additional obstacles, restricting available arguments about how betterment is defined or calculated.   

Who carries the burden of showing betterment?

Whoever raises the betterment issue, has the burden of proving it.  In the construction context, that is typically the design professional.  The burden consists of not just providing that certain changes are betterments, but also determining the value of the betterments. At times, the calculations can be simple, as when an owner asks that PVC pipe be upgraded to stainless steel pipe.  At other times, when the betterment is needed to correct an error or omission in the original design or construction, the calculation is more complex.  In those instances, the typical measure of damages is “lost opportunity cost”, the difference between the cost of the improvement if incorporated into the project at the time the error was found and the cost of the improvement if it had been incorporated into the original design.  

In determining whether betterment exists and how to value it, open communications with the owner (or the party receiving the unjust enrichment) are essential.  Retaining counsel early may also assist in better understanding the parties’ rights and whether the contract alters the commonly understood meaning and typical application of betterment.

 We are here to help you

Our attorneys in Dallas and Austin, working remotely during the pandemic, are available to answer any questions you may have about your contractual or legal rights and to help you navigate these uncharted waters.  Contact us at info@gstexlaw.com if you have any questions.

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