Subcontract Warranty Provisions

One of the provisions that is often included in a subcontract agreement is the subcontractor’s warranties. These provisions essentially bind the subcontractor by an implied promise to perform the subcontract work in a skillful and workmanlike manner. Fairbairn Lumber Corp. v. Telian, 92 A.D.2d 683 (3rd Dep’t 1983). In Fairbairn, plaintiff’s mechanic’s lien was found to be invalid and, thus, the complaint was dismissed due to plaintiff’s failure to perform certain work in a workmanlike manner. The defendant was awarded its costs to repair plaintiff’s work.

However, a construction contract does not warrant perfect results or guarantee satisfaction with the subcontractor’s performance. For example, in Milau Associates v. North Avenue Development Corp., a tenant sought recovery against a general contractor that built a warehouse for damage to the tenant’s textiles that were being stored in the warehouse due to water damage from a burst underground water pipe installed by a subcontractor. 42 N.Y.2d 482 (1977). The Court of Appeals, agreeing with the Appellate Division, held that the record was devoid of any evidence that the pipe installed was unfit for its intended purpose and, thus, denied the tenant’s claim.

Express warranties included in a subcontract agreement generally include phrases such as: “the work is guaranteed to be done in a workmanlike manner according to standard practices” (See Guidetti v. Pratt Plumbing & Heating, Inc., 55 A.D.2d 720 (3rd Dep’t 1976)) or that “all work under this subcontract shall be of good quality, free from faults and defects and in conformance with the Contract Documents”. See Milau Associates, supra.

Furthermore, pursuant to AIA Document 401, § 4.5 (2007 Ed.), express warranties may also guarantee the work to be free from defect for a specified period of time or guarantee that the materials used are of good quality and new.  The subcontract agreement may specify that the work is to comply with a specified code and that if the work fails to meet the code, the subcontractor may be liable for breach of contract. See Guidetti, supra.

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