South-Western Legal Studies in Business

Indiana Abandons Traditional Acceptance Rule Regarding Contractors' Liability
Description The Indiana high court held that the state would abandon the acceptance rule. Under that rule, once the buyer or owner of property has accepted a contractor’s work, the contractor is not liable in negligence to third parties for defects. Henceforth, contractors will be liable if defective work is the proximate cause of injuries suffered.
Topic Torts
Key Words Negligence; Acceptance Rule; Contractors; Third Parties
C A S E   S U M M A R Y
Facts The Hamms hired Forster, an independent contractor, to install an entrance ramp into their house to make it wheelchair accessible. After the ramp had been installed, Peters was delivering a meal to the Hamms home. He slipped and fell on the ramp, suffering serious injuries. He sued Forster for negligence. The trial court dismissed the suit, holding that under the acceptance rule, which provides that contractors do not owe a duty of care to third parties after the owner has accepted their work, Forster could not be held liable for Peters’ injuries. Peters appealed.
Decision

Reversed. The state of Indiana hereby abandons the acceptance rule. Hence, a builder or contractor is liable for injury to third persons as a result of the condition of work performed, even after completion and acceptance by the property owner, where it is reasonably foreseeable that a third party would be injured by such work due to the contractor’s negligence. It will be determined at trial if Forster’s work was the proximate cause of the injuries suffered by Peters.

Citation Peters v. Forster, 804 NE2d 736 (Sup. Ct., Ind., 2004)

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