Does your warranty work the way you want it to work?
Here is another simple contract hint to remember next time you consider updating your construction agreements. Almost every builder includes an express warranty for labor and workmanship. But is it working the way you want it to?
More often than not, I read construction agreements that lack a properly effective warranty clause. It doesn’t matter if you are a home remodeler or a commercial general contractor, chances are that your warranty clause could use a second look.
Most warranty clauses state the obvious: “Contractor expressly warrants its labor and workmanship for one year from the date of substantial completion.” Without diving into the need to define all of these terms (you should), the main point of this post concerns the effect of this clause. Have you considered what this clause does?
Many contractors probably use this clause as a means of reassuring the customer that they will fix any defects in their labor. But, if this is the case then the warranty merely provides two means for the customer to come after the contractor later – for breach of contract and breach of warranty.
Use the warranty to the advantage of both parties by developing the provision to lay out the procedure for curing defects. The clause is better off if it carefully lays out the procedure for the following:
- timely notifying the contractor of defects
- providing the contractor the opportunity to return to the property and inspect defects before action is taken
- providing the contractor the opportunity to cure any agreed upon defects
- waiving any loss and damages for failure to provide the agreed upon opportunity to inspect and cure
