Construction Today - May 2017 - 64
By Jeremy P. Brummond
Civil | COMPANY NAME
Adding Teeth to
hat is the purpose of a construction warranty? When
asked this question, many
contractors say they provide
a construction warranty to instill confidence in their work and because they do
not want to be "on the hook" for problems
with the project (caused by defective work
or otherwise) in perpetuity. Contractors
provide a warranty limited to a period of
years (or shorter) because they want to
define the time when they are responsible
for fixing problems.
Many contractors believe they have no
liability for problems with a project that are
discovered beyond their warranty period,
whether that period is one, two, three or
more years. Many contractors, however, are
CONSTRUCTION-TODAY.COM MAY 2017
generally incorrect in their understanding as to the legal effect of a
standard construction warranty.
Most courts interpreting standard warranty language - such as
"the contractor will provide a one-year builder's warranty" - find that
the language operates as a promise by the contractor to fix the work
in the warranty time period, but the language does not operate to bar
claims by owners for defective work after the warranty period.
In some states (Missouri, for example), contractors will not be able
to limit their liability for defective work to the warranty period - no
matter what language is inserted into the construction agreement.
In these states, any contractual agreement to shorten the time within
which a contractor may be sued for defective work are void and unenforceable either by statute or as a matter of public policy. In other
states (Maryland, for example), however, the parties to a construction
agreement have wide "freedom to contract" and a contractor can use
a well-drafted warranty or other contractual provision to limit claims
against the contractor based on defective work to those discovered
during the warranty period.