Construction contracts often contain confusing and sometimes misleading clauses, including one notorious clause referred to as a call back warranty. The misleading part of a call back warranty is that many contractors believe they are legally liable for a construction project for one year after the completion date. However, circumstances can arise that give property owners more time to take legal action for one or more violations of a construction contract.
By working with an experienced construction attorney, you get the answer to the question, “How long is a general contractor liable?”
What is a Call Back Warranty?
As a common clause in a construction contract, a call back warranty establishes a period in which a property owner has the legal right to “call back” the general contractor to address one or more construction issues. The call back period typically starts when a construction project has reached the “substantially completed” stage. Although call back warranties commonly last for one year, property owners have the right to increase the length of time that they have to request a contractor to remedy any flaws and defects from a construction project.
Because call back warranties are a part of virtually every type of construction contract, they have become a standard practice for both contractors and property owners. The AIA 201 standard contract form includes a clause that states the following:
“If, within one year after the date of Substantial Completion of the Work… if any of the Work is found to be not in accordance with the requirements of the Contract Documents, the Contractor shall correct it promptly after receipt of notice from the Owner to do so… The Owner shall give such notice promptly after discovery of the condition. During the one year period for correction of Work, if the Owner fails to notify the Contractor and give the Contractor an opportunity to make the correction, the Owner waives the rights to require correction by the Contractor and to make a claim of breach of warranty. If the Contractor fails to correct nonconforming Work within a reasonable time during that period after receipt of notice from the Owner…, the Owner may correct it.”
What Are the Legal Obligations Under a Call Back Warranty?
Breaching a construction contract provision that defines the call back warranty period requires the legal expertise of a business and commercial lawyer if the breach in the construction contract impacts a business. A call back warranty for both homeowners and commercial property owners present the duties and obligations of both parties in case of defective work completed by a contractor. The property owner must inform the contractor about the defect and the contractor has the legal responsibility to repair the defect if the call back occurs within the period established by the call back warranty clause.
How Can a Contractor Be Legally Obligated for a Call Back Warranty After One Year?
Although one year is a common period for a call back warranty, a construction contract can include a clause that increases the amount of time a property owner can call back a contractor to address a construction defect. It is not out of the question to establish a call back warranty that lasts five or more years. Even if a call back warranty lasts for just one year, the property owner still retains the right to file a claim for breach of contract that is determined by a state’s statute of repose and statute of limitations.
Knowing how long a general contractor is legally liable can help you determine whether you need an attorney to resolve a construction dispute.