There are two basic types of construction defects: defects that occur during the design of a home or building, and defects that occur during the building phase. As a general principle, an architect or engineer is usually responsible for defects in the design of a construction project. A builder, usually a contractor or subcontractor, is usually responsible for defects caused by a failure to conduct work according to design specifications.
A construction defect can cause a variety of problems.
This article discusses who will be responsible for construction defects. First, we'll describe some key legal concepts that are useful in evaluating liability in particular situations. Second, we'll identify situations that might result in responsibility for particular parties.
The law of construction defects is largely based on contract. Think about how many contracts might be involved in a single construction project. The owner of a building enters into a contract with an architect to design plans for a renovation. The architect enters into a contract with an engineer to review drawings to make sure they comply with engineering principles. The owner then contracts with a general contractor to implement the plans. The general contractor contracts with a dozen subcontractors to assist in implementation.
Every one of those contracts will probably have provisions indicating which party will be responsible for which type of defect. So, when construction contracts are negotiated, it is critical for the parties to pay close attention to the liability provisions. The result of all of this negotiation is usually that liability is passed down the chain. In other words, the owner will require the general contractor to accept responsibility for defects. The general contractor will then require each of the subcontractors to accept responsibility for defects.
This passing of liability is often done with “indemnification” provisions. If a subcontractor indemnifies a contractor for certain liability, it means that the subcontractor guarantees that if the contractor is later sued, the subcontractor will pay for any judgments that are rendered against the contractor. As a result, subcontractors often carry insurance policies protecting them from liability for defects. So, at the end of the day, many lawsuits resulting from construction defects are paid for by insurance companies.
As the discussion above illustrates, liability is often passed down to subcontractors under the terms of the network of contracts that accompany a construction project. But specific situations can lead to liability for any party involved in a construction project. Below, we'll spotlight a few of these scenarios.
General contractors and subcontractors are generally held liable on the theory of negligent construction.
If someone is injured due to a construction defect, they likely have the right to sue the liable party. See Liability for Injury Caused By a Construction Defect to read up on the legal issues that follow.