WHERE AT THE END OF THE DEFECTS LIABILITY PERIOD THE ARCHITECT DRAWS UP A DEFECT LIST AND, AFTER THESE DEFECTS HAVE BEEN ATTENDED TO BY THE CONTRACTOR, PREPARES ANOTHER LIST, WILL THE CONTRACTOR BE OBLIGED TO MAKE THESE DEFECTS GOOD?
Most forms of building contract include a defects liability period. The purpose of the defects liability period is to allow the Contractor an opportunity of making good his own defects. Whilst it may not be obvious to many Contractors, these clauses bestow a benefit upon them. In this context ‘Keating On Building Contracts' 5th Edition at page 247 states:
"The contractor's liability in damages is not removed by the existence of a defects clause except by clear words, so that in the absence of such clear words the clause confers an additional right and does not operate to exclude the contractor's liability for breach of contract...... But it is thought that most defects liability clauses will be construed to give the contractor the right as well as to impose the obligation to remedy defects which come within this clause."
In other words defects in construction work amount to a breach of contract entitling the Employer to claim damages H W Nevell (Sublest) -v- William Press and Son (1981). In the absence of a defects clause and where defects in the work appear after practical completion the Employer would be within his rights to employ others to make good the defects and to charge the Contractor with the cost. The presence of a defects clause gives the Contractor the right to remedy his own defects, the cost of which should be less than would be the case if others carried out the work.
Hudson's ‘Building and Engineering Contracts' 10th Edition at page 394 says:
"Since maintenance work can be carried out much more cheaply by the original contractor than by some outside contractor brought in by the building owner, defects clauses in practice confer substantial advantages on both parties to the contract."
Most forms of contract require the Employer's Agent to prepare a schedule of defects after the end of the defects liability period.
A question often raised is whether a Contractor is obliged to make good defects if the Agent, having issued a schedule with which the Contractor has complied, produces a second schedule which lists more defects. When answering the question the comments made earlier should be borne in mind. Defects in the Contractor's work amount to breaches of contract for which the Employer is entitled to damages and is not excluded by the defects clause. All the defects clause does is to give the Contractor the right to make good defects.
In terms of the JBCC Principal Building Agreement what puts an end to the Contractor's obligation to remedy patent defects is the issuing of the certificate of final completion.
Clause 26.6 provides that "A certificate of final completion issued in terms of 26.0 shall be conclusive evidence as to the sufficiency of the works and that the Contractor's obligations in terms of 2.0 and 15.0 have been fulfilled other than for latent defects."
After the issue of this certificate the Contractor is only liable for latent defects, i.e. defects which a reasonable inspection of the works by the Principal Agent (at the end of the defects liability period) would not disclose.
Eyvind Finsen in "The NEW Building Contract" comments at page 88 on the importance of the certificate of final completion as follows:
A certificate of final completion is the architect's written confirmation that the contractor has completed everything that he contracted to carry out, including variations and additional work contained in architect's instructions, and has done so to the complete satisfaction of the architect. It moreover signifies that the work is free from all defects, save for possible latent defects.
The certificate shall be conclusive evidence that the contractor has discharged all his obligations, and it cannot therefore be impeached by the employer. Nor can it be withdrawn, because, having issued it, the architect has become functus officio. It will not avail the architect to say that he inadvertently overlooked certain patent defects; he will be deemed to have condoned these defaults, and the contractor cannot be compelled to attend to them.
The architect carries a very heavy responsibility in issuing a certificate of final completion, and he may be held liable if he negligently overlooks anything. It should therefore be issued only after the works have been thoroughly and meticulously inspected and checked against the various contract documents and instructions. As he may be held vicariously liable for negligence on the part of the other agents, he should ensure that they have made similar inspections and checks before he issues the certificate of final completion.
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