Defects will occur in buildings. It is one of the great certainties in construction, the equivalent of death and taxes in life more generally
But when does the contractor have to make those defects good and what are its duties?
Defining a Defect
Generally a defect is
anything which renders the [works] unfit for the use for which it is intended, when used in a reasonable way and with reasonable care
The standard form construction and engineering contracts define defects differently:
- any defects shrinkages or other faults [appearing] within the relevant Rectification Period due to any failure of the Contractor to comply with his obligations under this Contract [JCT DB 2016 clause 2.35]
- a part of the works which is not in accordance with the Works Information, or a part of the works designed by the Contractor which is not in accordance with the applicable law or the Contractor’s design which the Project Manager has accepted [NEC3 clause 11.2(5)]
- any defect in or damage to any part of the Works and which arises either from any defective materials, workmanship or design or from any act or omission of the Contractor during the defects period except where the defects arose from designs provided by the Purchaser or Engineer in relation to which the Contractor disclaimed responsibility under clause 13.3 [MF/1 rev 6 clause 36.2]
There are two types of defect: patent and latent.
- Patent defects are defects that are visible or capable of being discovered (observed and observable).
- Latent defects are not reasonably discoverable and often come to come to light after completion and even after the defects period.
Any client needs to ensure that the works meet the required contractual standards for goods, design and workmanship. This can be done in a number of phases:
The contract administrator must identify visible defects and exercise her powers before completion and ensures that issues relating to quality and defects do not wait until the defects period.
The contract administrator/client may:
- ask the contractor to remove work, plant, goods or materials that fail tests or inspection [eg JCT DB 16 cl 3.13.1, NEC3 cl 42.2, MF/1 cl 23.5]
- exclude the value of defective work from interim certificates [JCT DB 16 cl 18.104.22.168, NEC3 cl 50.2]
- terminate the contractor’s employment for failure to rectify defects [JCT DB 16 cl 8.4.3, NEC3 cl 91.2, MF/1 cl 35.8(c) and 49.1(d)(iii)]
- have to confirm that she is satisfied with the works [MF/1 cl 13.2]
- confirm the performance of the works through testing before and after completion [JCT DB 16 cl 3.1.2, NEC3 cl 40, MF/1 cl 23, 28 & 35].
Obvious or ‘patent’ defects should prevent the issue of the certificate of completion.
Accordingly, the date of completion, all work should conform to the requirements of the contract.
During Defects Period
The contractor is required to either:
- make good defects at its cost (a defects liability or rectification period), or
- keep the works in a specific state of repair and is paid for all maintenance that does not arise from a defect (a maintenance period).
There is a subtle difference (read more) between these two: the second is more time-consuming but results in additional fees for the contractor. A maintenance period should always make exceptions for fair wear and tear as the works are not meant to stay pristine for a year or more.
In Pearce & High v Baxter, the court said (with some reservations) that the JCT Minor Works wording
can be regarded as giving the contractor a right to make good defects at his own expense, and a licence to enter the property for that purpose
To ‘encourage’ the contractor to return to the project and make defects good, most construction contracts allow the client to withhold some of the money due to the contractor until the end of the defects period, either by a final stage payment or retention.
After Defects Period
Once the defects/maintenance period has come to an end, the client can bring a claim for breach of contract for any defects which become patent during the limitation period. The client’s claim is for damages to put it in the position it would have been in if the contractor had carried out the contract properly.
Quote at top from article by Harrison Consult quoting Professor Anthony Lavers. Definition of a defect from Yarmouth v France (1887) 19 QBD 647. See also Tate v Latham  1 QB 502 where a defect meant the absence of an item essential to complete the works – even if the works were operable without the item. Pearce v Baxter  CLC 749 at 751.