Defects liability: Overview, definition and example
What is defects liability?
Defects liability refers to the responsibility of a party, usually the contractor, to fix or repair any defects or issues with the work or product they have delivered. This period typically begins after the completion of a project and can last for a specified time. If any defects appear within this period, the contractor is required to address them at no additional cost to the client.
Why is defects liability important?
Defects liability is important because it ensures that the work or product meets the agreed-upon standards and that any problems that arise after completion are addressed. It provides the client with peace of mind, knowing that if defects occur, they won’t be stuck with the cost of repairs or replacements. For contractors, it establishes the length of time they are responsible for their work and helps manage the expectation that the work will be free of defects.
Understanding defects liability through an example
Imagine a construction company completes a new office building for a client. After six months of use, the client notices that some of the plumbing fixtures are leaking. Because the contract includes a defects liability clause, the construction company is responsible for fixing the plumbing without charging the client for the repairs, as long as the defects are found within the defects liability period.
Similarly, if a supplier delivers faulty machinery to a manufacturing plant, and the machinery breaks down after a few months, the supplier might be required to fix or replace the machinery under the defects liability clause, provided the issue occurs within the specified time frame.
Example of a defects liability clause
Here’s how a defects liability clause might look in a contract:
“The Contractor shall remedy any defects in the work identified within 12 months from the date of practical completion, at no additional cost to the Client. The Contractor’s obligations under this clause shall cover all defects, whether they arise from faulty materials, workmanship, or design.”
Conclusion
Defects liability ensures that a party responsible for delivering goods or services stands behind their work and addresses any issues that arise. It’s a key part of many contracts, offering protection for the client and holding the contractor accountable for the quality of their work. Including clear defects liability clauses helps set expectations and provides clarity on how issues will be handled if they arise after completion.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.