You hire a contractor to fix your roof. Contractor subcontracts with Bubba to do the work. Bubba sets your house on fire. It is a complete loss -- an $800,000 loss. Someone must pay, right.
Bubba obviously is negligent, but Bubba has no insurance. Contractor says that he is not liable for Bubba's negligence because Bubba is a subcontractor. And, Contractor is right. Under Tennessee law, the negligence of a subcontractor is not imputed to the principal. Of course, the parties to the contract can change that responsibility.
But wait, you say. My contract was with Contractor -- I never agreed to allow Bubba to do the work. Too bad, Contractor says. Our contract does not contain any provision that prohibits subcontracting. Therefore, Contractor can, under Tennessee law, subcontract the work and escape liability.
One last hope. According to the Tennessee Supreme Court, every contract for the performance of services contains an implied duty (not warranty) to perform the work in a "careful, skillful, diligent, and workmanlike manner." A contractor cannot escape this contractual duty by delegating the work to a third party. Of course, the parties were free to include in their contract a waiver of this "non-delegable" duty, but they did not.
This case is not the first case to recognize an implied duty in contracts -- that occurred in 1987. But, it is an important decision as it is another Tennessee Supreme Court case recognizing an implied duty.
Of course, the parties to the contract can always waive duties implied by law.
See Federal Insurance Company A/S/O Robert and Joanie Emerson v. Winters, et al.
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