Defects liability period: Overview, definition, and example
What is a defects liability period?
A defects liability period (DLP) is a specified period after the completion of construction or the delivery of goods, during which the contractor or supplier is responsible for repairing or fixing any defects or issues that arise in the work or product. The DLP is usually a standard part of construction contracts, warranties, and service agreements, ensuring that any defects that were not initially apparent during the final inspection are addressed by the responsible party at no additional cost to the client or purchaser.
During this period, the contractor or supplier is typically required to address any defects identified, which can include problems with the quality of materials, workmanship, or failure to meet agreed-upon specifications. The length of the defects liability period can vary, depending on the type of project or product but typically ranges from 6 months to 1 or 2 years after the completion of the work or delivery of the goods.
Why is the defects liability period important?
The defects liability period is important because it provides assurance to the client or purchaser that the work or product they have received will meet the required standards and specifications. It serves as a form of quality control, ensuring that the contractor or supplier takes responsibility for any deficiencies that may arise after the project has been completed or the product delivered.
For contractors and suppliers, the DLP also outlines their post-completion obligations and helps protect their reputation by providing an opportunity to address defects that could impact the client’s satisfaction. For clients, having a defined defects liability period ensures that they can hold the contractor or supplier accountable for any issues that emerge, ensuring the longevity and quality of the finished project or product.
Understanding defects liability period through an example
Imagine a company, ABC Construction, is hired to build a commercial office building. The contract stipulates a defects liability period of 12 months following the building's completion. After the building is handed over, a few months later, the building owner notices that the HVAC system is not functioning properly. Since this issue falls within the 12-month defects liability period, ABC Construction is responsible for fixing the HVAC system at no additional cost to the owner.
In another scenario, a customer purchases a batch of machinery from a manufacturer. The sales agreement includes a 6-month defects liability period, during which the manufacturer is responsible for repairing any manufacturing defects. Three months after the delivery, one of the machines malfunctions due to a defect in the motor. The manufacturer is obligated to repair or replace the machine under the terms of the defects liability period.
An example of a defects liability period clause
Here’s how a defects liability period clause might appear in a contract:
“The Contractor shall be responsible for repairing or replacing any defects or failures in the work, including materials and workmanship, that arise within the Defects Liability Period of 12 months following the completion of the work. The Contractor shall make the necessary repairs at no additional cost to the Client. The Defects Liability Period shall begin upon the issuance of the Certificate of Completion.”
Conclusion
The defects liability period is an important aspect of construction contracts, service agreements, and product warranties, ensuring that contractors and suppliers take responsibility for any defects or issues that arise after the completion of work or delivery of goods. It provides peace of mind to clients or purchasers, knowing that they can rely on the contractor or supplier to fix any deficiencies. For contractors and suppliers, it helps maintain their professional standards and protects their reputation by ensuring they meet agreed-upon quality expectations. Understanding the terms and duration of the defects liability period is crucial for both parties involved in the agreement.
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.