International Construction Law Review
DEFECTS LIABILITY AFTER THE CONTRACT HAS BEEN TERMINATED BY THE CONTRACTOR
WOLFGANG BREYER
Partner, Breyer Rechtsanwälte, Stuttgart, Germany Visiting Professor at the University of Vienna for International Construction Law
I. THE DEFECTS LIABILITY OF THE CONTRACTOR
Clause 4.1 of the FIDIC Red Book (hereafter, “Red Book”), “Contractor’s General Obligations”, states that the contractor shall execute and complete the works in accordance with the contract and with the engineer’s instructions, and shall remedy any defects in the works. This obligation exists not only during the Defects Notification Period, it exists throughout the carrying-out of the works. The expression “defect” is not explicitly defined in the different FIDIC forms. In several common law jurisdictions “defect” is defined by reference to conformity with the contract.1 Thus, “defect” means that the work or the material does not comply with the requirements stated in the contract.2
To remedy defects and damage during the Defects Notification Period is one of the main obligations of the contractor. The Defects Notification Period is defined as the period for notifying defects in the works or a section under sub-clause 11.1 of the Red Book (Completion of Outstanding Work and Remedying Defects), as stated in the Appendix to Tender (with any extension under sub-clause 11.3 of the Red Book (Extension of Defects Notification Period), commencing from the date the works or section is completed as certified under sub-clause 10.1 of the Red Book (Taking over of the Works and Sections).
All work referred to in sub-clause 11.1 (b) of the Red Book shall be executed at the risk and cost of the contractor, if and to the extent that the work is attributable to the contractor. If any defect or damage is attributable to any other cause than stipulated in sub-clause 11.2 of the Red Book, the contractor is obliged to rectify all defects or damage notified by the employer too, but is also entitled to payment.
If and to the extent that the works, section or a major item of plant cannot be used for the purposes for which they are intended by reason of a defect or damage, the employer is entitled under sub-clause 11.3 of the Red Book to an extension of the Defects Notification Period.
1 Baker, Mellors, Chalmers, Lavers, FIDIC Contracts: Law and Practice (2009), 3.454.
2 Halsbury’s Laws of England, Vol 4 (3), Section 95: Defects.
Pt 3] Defects Liability after Termination by Contractor
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