The construction industry is largely governed by contracts. Mr. and Mrs. Smith contract with Reputable Construction, LLC to build a single-family home. The rights and responsibilities of both parties are generally determined by the contents of the contract, as enforced by North Carolina law. The contract could include express warranties – specific stipulations providing an assurance of some particular item or service in relation to the contract. An express warranty could also be provided orally, in conversations between the Smiths and Reputable Construction. North Carolina also recognizes implied warranties in construction contracts – warranties neither explicitly included in the written contract nor orally discussed. Implied warranties place additional requirements on construction companies, and provide avenues of recourse to the parties to the construction contract event of a defect or breach.
This blog will be Part One in a two-part series. Part One will focus on the implied warranties that protect purchasers. Part Two will focus on implied warranties that protect contractors and subcontractors.
The Implied Warranties Protecting Purchasers
- Implied Warranty of Merchantability. This warranty applies to goods purchased from a merchant and assures the purchaser that the goods are fit for the ordinary purposes. This warranty does not extend to services, such as the installation of goods. For example, this warranty would assure the Smiths that the windows they purchased for their home will be fit for the ordinary purposes for windows. Conversely, it would not provide any assurances as to the installation of the windows.
- Implied Warranty of Fitness for a Particular Purpose. This warranty applies to goods purchased and assures the purchaser that the goods provided are appropriate for a particular purpose (to the extent the seller has reason to know of the particular purpose). Similar to the implied warranty of merchantability, it only applies to goods. Using the example of the windows, the Smiths informed Reputable Construction, before the parties enter into the construction contract, that they are professional musicians, and thus will need soundproof windows to contain the noise from their jam sessions. This warranty assures the Smiths that Reputable Construction will order windows that can perform this particular task.
- Implied Warranty of Habitability. This warranty applies exclusively to residential construction contracts, and assures the purchaser that the home is fit for human occupancy. This warranty extends beyond the initial purchaser to subsequent purchasers, and also applies in residential lease agreements. Pursuant to this warranty, the Smiths are assured that Reputable Construction will provide them with a home fit for human inhabitation.
- Implied Warranty of Workmanship Or Workmanlike Quality. This warranty assures the purchaser that the construction company performed its duties consistent with the prevailing standards in the locale and the home is sufficiently free of major defects. Reputable Construction, upon instruction of the particular purpose by the Smiths, orders and installs soundproof windows. Within months of moving in, the Smiths notice the windows are misaligned. If the Smiths discover the window misalignment was caused by Reputable Construction’s failure to provide adequate support in the foundation of the home, this warranty may provide the Smiths with an avenue to recover damages from Reputable Construction.
Importantly, the implied warranties are limited by statutes of limitations. If the Smiths believe Reputable Construction breached the implied warranty of workmanship, they have a limited window of time in which they must file a complaint. The particular time limit varies depending on the type of alleged wrongful conduct and the type of harm caused.
If you have questions regarding a construction dispute, please call us at (704) 457-1010 to schedule a consultation. For more information regarding our firm, attorneys, and practice areas, please visit http://www.lindleylawoffice.com/.