Warranty
The term 'warranty' can have a number of meanings, but in general, it refers to a legally binding assurance or promise.
Warranties may be used to provide assurance from one party to another that goods and/or services will meet certain expectations, e.g. fit for purpose, being free from defects, complying with statutory and other regulations and specifications.
A warranty can be either express (i.e. written) or implied.
A common form of warranty, and one that is paid for, is that which runs with a product, meaning that the customer of a product is given an assurance by the manufacturer that any defects or losses will be repaired or compensated during a given period. The warranty can also detail both parties’ rights and obligations in the event of a dispute.
Defects in buildings are not recoverable in tort (only as a contractual claim), as they are economic loss which are only recoverable through a contractual relationship. As a result, collateral warranties have been developed. These provide for a duty of care to be extended by one of the contracting parties to a third party who is not party to the original contract.
A typical example is an architect of a new development agreeing to a duty of care to the occupant. Privity of contract rules would prevent any liability arising between the architect and occupier without the existence of a collateral warranty.
For more information see: Collateral warranties.
Bonds and guarantees are forms of security that accompany contractual obligations and are based on either primary or secondary obligations.
For more information, see Guarantees.
Other forms of assurance that might be referred to on construction projects include:
- Fitness for purpose.
- Reasonable skill and care.
- Workmanlike manner.
- Good faith.
- Reasonable endeavours.
- Best endeavours.
- Retention.
- Duty of care.
[edit] Related articles on Designing Buildings
- Agency.
- Bonds.
- Bonds v guarantees.
- Breach of contract.
- Collateral warranties.
- Defects.
- Definition of collateral warranty.
- Difference between collateral warranties and third party rights.
- Duty.
- Fit for purpose.
- Guarantees.
- Insurance.
- Miller Act.
- Performance bond.
- Practical considerations of collateral warranties.
- Professional consultant's certificate.
- Reasonable skill and care.
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