7/8/2012

ConsensusDocs Updates Warranty Claims For Defective Construction Language in Six Agreements

ConsensusDocs

Effective July 18, 2012, ConsensusDocs has updated language regarding warranty claims made for defective construction. Rather than wait for a preordained revision cycle of 5 or 10 years, the ConsensusDocs Drafting Council approved that this revision go into effect today to ensure that you would have best and latest language to use on your next project. This revision applies to certain agreements that previously contained language that potentially allowed an Owner to automatically charge for the cost to correct defective construction that was discovered past the one-year correction period as a warranty claim. The purpose of the revised language is to afford the Constructor/Design-Builder/Construction Manager the opportunity to correct work that is past the one-year correction period. Potential liability for defective construction is dependent upon the facts and applicable laws applicable to the Work.

The revision impacts the contracts in the chart below:

If you have already downloaded a contract and begun a negotiation you are encouraged to input the revised language. Also, this update is only being made on the standard documents that are being delivered through the new ConsensusDocs technology platform. Several contracts on the old DocuBuilder platform are now out-of-date and YOU ARE STRONGLY ENCOURAGED TO USE THE NEW TECHNOLOGY PLATFORM WHICH IS MICROSOFT WORD COMPATIBLE. For more information, please contact us at 866-925-3627 or support@consensusdocs.org.

An example of the revised language is below in the ConsensusDocs 200 Agreement:

3.9.4 The Constructor’s obligations and liability, if any, with respect to any Defective Work discovered after the one-year correction period shall be determined by the Law. If, after the one-year correction period but before the applicable limitation period has expired, the Owner discovers any Work which the Owner considers Defective Work, the Owner shall, unless the Defective Work requires emergency correction, promptly notify the Constructor and allow the Constructor an opportunity to correct the Work if the Constructor elects to do so. If the Constructor elects to correct the Work, it shall provide written notice of such intent within fourteen (14) Days of its receipt of notice from the Owner. The Constructor and shall complete the correction of Work within a mutually agreed timeframe. If the Constructor does not elect to correct the Work, the Owner may have the Work corrected by itself or Others, and, if the Owner intends to seek recovery of those costs from the Constructor, the and charge the Constructor for the reasonable cost of the correction. The Owner shall promptly provide the Constructor with an accounting of the correction costs it incurs.

To review a redlined sample of the revised language, please sign-in to your account at www.consensusdocs.org and click on the “Preview” link associated with the contract.