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Are you liable for all construction defects?

It's a contractor's nightmare — being sued for construction defects on a project your company completed. But are you the liable party?

Most claims of construction defects involve allegations of negligence, strict liability or breach of warranty or contract.

Negligence

Negligence claims arise from incidents where contractors, subcontractors and developers are accused of not "exercis[ing] the reasonable degree of care, skill and knowledge" as is prudent in that industry. For purposes of liability, remember that contractors and developers have ultimate responsibility for any allegations of negligence by subcontractors.

Strict liability

Implied warranties of habitability impose strict liability on the parts of general contractors. This is an offshoot of products liability laws. With strict liability claims, plaintiffs aren't burdoned with the proof that developers or general contractors were negligent in building the project. Plaintiffs must prove defendants had roles in mass-producing housing or buildings. They musy also show defects exist and that damages resulted from these defects, which were created or caused by defendants.

Breaches of warranty

Purchase agreements and other contracts address any warranties related to conditions of properties and breaches of express warranties. Court precedents hold sellers and builders liable for implied warranties, i.e., structures being properly "designed and constructed in a reasonable workmanlike manner."

Breaches of contracts

Property owners may file suit against developers or contractors for privity of contract and breaching obligations spelled out in sale documents, purchase agreements and escrow instructions. Under doctrines of substantial performance, builders may be required to pay the stipulated price with deductions for reduced market values due to builders' noncompliance with specifications or plans.

If you are facing any of the above allegations, you need to learn all of the legal options available to you to defend yourself.

Source: FindLaw, "Legal Liability for Construction Defects," accessed March 02, 2018

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