For Contractors and Subcontractors: What Your Warranty Doesn’t Give You

September 3, 2014

Many contractors and subcontractors believe that as long as their work lasts the length of their warranty, they're "in the clear." For example, if they provide a one-year warranty, and there are no problems with their work after a year has passed, they think that they have no liability for problems that arise or are discovered after the one-year period.

Those contractors and subcontractors, however, are generally wrong. Most courts interpreting standard warranty language find that the language operates as a promise by the contractor to fix the work in the warranty time period, but does not operate to bar claims by owners for defective workmanship after the warranty period. See, e.g., Bender-Miller Co. v. Thomwood Farms, Inc., 211 Va. App. 585, 179 S.E.2d 636 (1971).

For a warranty provision to limit a contractor's liability for defects in workmanship, the language must be absolutely clear that the contractor has no further liability after the warranty period. Even then, in some states, a court may hold the contractor responsible. In Missouri, for example, a contractor remains responsible for defects after any time limitation in its agreement until the statute of limitations (5 years from when the defect could have or should have been discovered) and/or statute of repose (10 years from completion) expires. In Missouri, contractual provisions shortening the time within which a contractor may be sued for defective work are void and unenforceable by statute. See Mo. Rev. Stat. § 431.030.

Contractors and subcontractors should consult with an attorney to discuss how best to limit exposure to defective workmanship claims. If faced with a defective workmanship claim, the matter needs to be discussed with an attorney as soon as possible to address how best to defend against these claims.