December 10, 2009
CM 385: Section 1
How Can A Contractor Avoid Liability for Defective Work?
Every contract created produces a margin of risk and a platform for success. Depending on how one manages the risk assumed, one may either excel and shine in the glory of success or drown and disappear in the raging waters of error. Nevertheless, to become great one must take that step of faith into the flailing wind. As said by Leo F. Buscalglia, “The person who risks nothing – does nothing, has nothing, is nothing, and becomes nothing. He may avoid suffering and sorrow, but he simply cannot learn… and grow… and live.” (Buscalglia, 2009) The contractor who is bound to the owner must understand the risk assumed regarding defective work. This understanding will create a critical eye for the contractor that will help mitigate risk. To begin, the contractor must recognize what a defect is and the different categories that a defect may be classified as; the various categories will provide opportunities for the contractor to have future claims barred after acceptance. The two main classifications for defective work are known as: patent defects and latent defects. According to the Steven H. Gifis, the author of Law Dictionary, a patent defect is a “defect that could be recognized upon reasonably careful inspection or through the use of ordinary diligence and care.” To assist in avoiding claims against the contractor due to patent defects, a contractor will create a punch-list, which list will include specific items that need to be checked; and if needed, corrected, prior to the sale of the project. Usually the contractor will walk through the project with the owner to identify any corrections needed. Upon acceptance of the work by the owner, which can be manifest by payment or taking possession of the project (i.e. substantial completion), any future patent defect claims cannot be brought against the contractor. The defect should...