Liability for Defects in Building Materials

Defects in building materials disputes arise for several reasons, such as the poor quality of the materials or their non-conformity with the agreed specifications. To reduce material defects, the parties to the construction contract generally specify some preventive measures; for instance, the agreement requires the contractor to obtain prior approval from the employer/engineer on the manufacturer and examining the materials before using them.

The following paragraphs will demonstrate:

  • The Party liable for defects in building materials.
  • Distributing the Liability Between the Contractor and Engineer
  • Liability for using construction products that do not comply with the specifications.
  • Liability for defective materials if inspected and approved by the engineer during manufacture.
  • Terminating the construction contract or compensating the owner/employer due to defects in building materials.

Party liable for defects in building materials

The contractor and the engineer are jointly liable for the material defects, like those associated with using unsatisfactory or defective products. The basis for this responsibility is the contract of Muqawala /construction contract and the law. Article (22) of the law regulating the work of Engineering Consultancies stated the joint liability, which reads as follows:

“The licensed designer or supervisor of implementation shall be liable, jointly with the contractor, for any mistakes or defects in the projects designed by him or implemented under his supervision, even if the defect is due to the land on which the project is built or if the employer authorised the establishment of defective enterprises, for a period of (10) ten years from the date of taking over of such enterprises.

If the work of the office was limited to the design without being assigned to supervise the implementation, it shall not be liable for the defects resulting from the design. Any agreement or condition intended to exempt or reduce the guarantee shall be considered void. The liability lawsuit shall be forfeited after (3) three years from the date of detection of the error, defect or violation, without taking actions of filing the said lawsuit.”

Article (634) of the Civil Transaction Law emphasised the joint liability of contractors and engineers, which reads as follows:

“(1) Both the engineer and the contractor shall be jointly liable for a period of ten years for any total or partial collapse of the buildings or other fixed facilities constructed thereby, and for any defect which threatens the stability or safety of the building, unless the contract specifies a longer period. The above shall apply unless the contracting parties intend that such installations should remain in place for a period of less than ten years.

(2) The warranty set forth in the foregoing Article shall include any defects existing in the buildings and facilities, which endanger the safety and endurance of building.

(3) The period of ten years shall commence as from the time of delivery of the work.”

Distributing the Liability Between the Contractor and Engineer

This matter is one of the complicated disputes in construction cases since the employer is not obligated to prove the contribution of both the contractor and the engineer to the defect; instead, he requires only to prove the existence of a defect in the materials. Also, the owner could sue the contractor or the engineer, and none of them has the right to object unless either of them has compensated the employer fully. However, the party who paid the total compensation to the employer may revert part of it to the other in proportion to his contribution to the defect, if possible; otherwise, it shall be divided equally between them.

In several judgements, the Omani courts stated that the basis of contractors and engineers returning to each other is tort liability. in case no. 32/94 the Commercial Court concluded that the manufacturer, contractor and engineer are responsible for the defect in the concrete. Also, the Court held that the Primary Court judgment was wrong when it stated that the contractor could not sue the engineer as the legal basis for the contractor claim of recourse to the engineer based on tort liability.

Liability for using construction products that do not comply with the specifications

If the contractor is responsible for providing most or all of the materials, he would be jointly liable with the engineer for using materials that comply with the specifications designated in the contract. If the specification is not available, the product must be sufficient for its purpose as mentioned in the agreement or from the purpose for which the product was assigned. In this meaning, Article (629(1)) of the Civil Transactions Law states that: “If the employer stipulates that the contractor should provide the materials for the work, in whole or in part, he shall provide them in accordance with the conditions and specifications stated in the contract, otherwise in accordance with common practice.”

TThe most critical questions regarding specifications are whether the employer has the right to sue the contractor/engineer and demand compensation for using materials whose specifications differ from the agreed-upon even though they are free of defects? Can he claim compensation for possible damages that may occur in the future due to the use of lower quality materials?

Liability for defective materials if inspected and approved by the engineer during manufacture

Construction contracts usually include a provision not to exempt the contractor from liability if he had inspected the products and machinery used for construction at the manufacturing stage. Therefore, the engineering has examined the materials as part of his responsibility and has approved them; accordingly, the contractor remains responsible for any defective products.

However, if the contract is silent on the contractor’s responsibility and the engineer examines the materials and agrees to them. Does the contractor remain responsible? In case No. 32/94, the Commercial Court held the contractor’s responsibility for the defects of the materials supplied by him shall remain even if the engineer has examined these materials.

Another related questions are:

If the contractor is not responsible for the materials supply, is he bound to inform the employer of defects in such materials?

Will the contractor be exempted from liability in the event of the employer’s intervention by imposing specifications or providing defective materials?

If the contractor informs the engineer regarding defects materials, but the engineer insists on supplying them, is the contractor responsible?

Answering this question requires evaluating each case separately considering the court’s practice in similar disputes.

Terminating the construction contract or compensating the owner/employer due to defects in building materials

If the flaws to the building have resulted from using defective materials or materials that are non-compliant with the specifications, which leads to substantial damages that the employer would not accept if he became aware of it before completion of the project, then the employer has the option to terminate the contract or otherwise keep the building and may ask for compensation in both circumstances. However, if the defects were not substantial, the court may only compensate the employer for the damages.

Ali Al Rashdi

ali.alrashdi@sandalaw.om

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