Latent Defects: Key Issues

Author:Ms Amelia Sorohan
Profession:Arthur Cox
 
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Introduction

A construction contractor is usually liable to remedy defects in materials and/or workmanship which are apparent or patent for a limited period once a project has reached substantial or practical completion. This period is commonly known as the 'defects liability' or 'defects notification' period and will be stated in the contract. During this period, a construction contractor typically completes snagging. However, despite the expiry of the defects liability period under a contract, an employer's common law rights with respect to latent defects continue to apply. 'Latent defects' are defined as those defects which are not readily apparent or discoverable upon a standard inspection of the completed works. In other words, latent defects are concealed flaws; defects that exist, but are hidden at the time of completion.

Construction contracts commonly used in Ireland do not normally include any express reference to latent defects or state the period for which a contractor shall be liable for latent defects. In the absence of express contractual provisions, the common law regulates claims for latent defects. When a party suffers loss or damage arising from a latent defect to a building or structure, it may pursue damages by either suing in contract or tort (otherwise known as negligence), or pursuing claims under both the law of contract and negligence (known as 'concurrent liability').

Negligence

Either a builder or a designer may be found to owe another party a duty of care under negligence law, which allows a plaintiff to pursue an action in negligence in circumstances where it has no direct contractual relationship with a builder or designer. In Ireland, the time periods for commencing an action in either negligence or contract are set out in the Statute of Limitations, 1957. For an action in negligence, the time period is six years from the date that the cause of action arises.

A cause of action in negligence arises at the time when actual physical damage occurs or becomes manifest. If, as is usually the case with latent defects, there is a time lag between the negligent act which causes the defect and the damage resulting from the defect occurring, the cause of action will arise at the later date. Irish courts have held that the date at which the defect ought to have been reasonably discovered, or when the fact of the defect actually becomes known, is irrelevant for the purpose of determining when time begins to run. It is the...

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