Contractor Material Warranties
Material Warranties Are Not Implied Against Contractors
Often, contractors (and subcontractors) enter into contracts pursuant to which they are obligated to not only install construction materials, but also to furnish those construction materials. Sometimes when a problem arises with the materials used, the other party to the contract will assert that the contractor breached an implied warranty to furnish materials that were defect free. But, can a contractor be held liable for breach of an implied warranty to furnish defect-free materials, assuming that the contractor only purchased those materials from a supplier?
As an initial matter, it is important to keep in mind the difference between express warranties and implied warranties. A contractor grants an express warranty when the contract expressly provides the warranty. An express warranty may be given in a written contract or an oral contract. Thus, a contract for construction may provide an express warranty stating that the contractor will furnish materials that are free of defects. Such a provision is not unusual, but if it is in your contract, it should be there because you want it there and you understand its ramifications.
Implied warranties become a part of the parties’ agreement even though the parties did not expressly agree to them. Sometimes implied warranties exist because a statute imposes them and other times because case law imposes them. For example, Florida Statute, section 672.314 creates an implied warranty as to the quality of goods that are a subject of a contract for the sales of goods sold by a merchant. That statute is often the basis for the claim that the contractor owed a duty to deliver materials that are free of defects. This was the case in Lonnie D. Adams Bldg. Contractor, Inc. v. O’Conner, 714 So. 2d 1178 (Fla. 2d DCA 1998).
In that case, the owner alleged that the contractor furnished defective or faulty windows. The court noted that case law had established an “implied duty to perform the contract in a workmanlike manner, that is, to install the windows properly.” But, that was different from the owner’s allegation that the contractor was required to furnish defect-free windows. That duty, if it were to exist, would have arisen by virtue of section 672.314. The court said:
We find no legal basis for such. In this regard we note that the implied warranties [of section 672.314] do not generally pass from a contractor to an owner, because a contractor is viewed as a provider of services, not a merchant.
Accordingly, the court held that the contractor was not under an implied duty to deliver defect-free windows.
If you are a contractor (or subcontractor) who furnishes materials as an incident to your contract for construction services, it is possible that the materials you furnish are not subject to the statutory implied warranty of merchantability. However, a careful review of the facts is necessary in order to fairly evaluate your particular situation. We have found that it is far less expensive to avoid warranty liability by using the right contracts and controlling the representations that you make than it is to defeat a warranty claim after performance. Since warranty liability is a matter largely within your control, you may want to discuss the subject with experienced counsel.
If alternatively, you are an owner, or agent for an owner, you need to be certain that any contract entered into with a contractor or subcontractor furnishing materials includes an express warranty regarding the quality of those materials. Absent such an express warranty, you may be without any recourse against your contractor for the installation of defective materials.