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Guarantees in construction – just a paper exercise?

A trend is emerging in which guarantees on produces used in construction are being rendered invalid by the inclusion of onerous clauses which limit the exposure of the manufacturer, supplier or insurer to the detriment of the building owner and/or tenant.

It is not unusual for guarantees or warrantees available on the market today to contain restrictions that not only fall outside of what is regarded as clear and fair, but that are often neither practical nor achievable.

Two common examples include the stipulation that annual maintenance and inspections should be carried out, at the client’s cost, and the requirement that the building should not exceed a specified temperature range.

This type of clause is included as a paper exercise and, in the worst-case scenario, exposes people to the unnecessary risks of working at height, something which is actively discouraged by the Health and Safety Executive.

Clauses mean client is unable to claim

Such is the nature of these restrictions, that they are often agreed to without anybody in the procurement chain (from the funder, developer, architect, quantity surveyor and legal team along with the main contractor, roofing contractor and finally the tenant) realising until the claim on the guarantee/warranty is made.

“The existence of punitive clauses has even been identified in relation to insurance-backed guarantees, which may involve payment of a premium, and are generally considered to be more robust”

When a problem does occur and the team checks the guarantee or warranty, the existence of punitive clauses often means that they have failed to comply with the terms and conditions and as such, even though the headline guarantee period was 25 years, the building owner or tenant is unable to make a claim.

The existence of punitive clauses has even been identified in relation to insurance-backed guarantees, which may involve payment of a premium, and are generally considered to be more robust.

However, it is often the case that these documents do not offer any protection over and above what can be achieved under a standard, free guarantee.

Awareness of clauses is crucial

Awareness of the existence of this type of practice is the first step to being able to effectively avoid being caught out.

Copies of all manufacturers’ warranties should be requested and inspected prior to specifying materials; this way those involved in the process can make sure they comply with the terms required.

But it is also important to realise that there are robust guarantees available on the market that are worth the paper they are written on, providing the project team does not deviate from the specification.

The specification is there to protect the client. It provides best practice recommendations which, when adhered to, ensure the system has been installed as intended, as per the guarantee or warranty.

If individual components are changed, or the system is installed contrary to the manufacturer’s guidelines, then the same claim cannot be made.

Vital to follow guidelines on roofs

This is of particular relevance in the roofing industry, where lives are at risk if ‘non-fragile’ systems are only partially tested and are not installed as intended. 

The profiler, rooflight manufacturer or panel supplier cannot claim non-fragility unless the installed assembly, including the profiles, rooflights, fasteners and sealants, has been successfully tested in its entirety.

“The specification provides best practice recommendations which, when adhered to, ensure the system has been installed as intended, as per the guarantee or warranty”

When the cladding contractor or main contractors choose to change a specification and install replacement components, which they have selected, it is incumbent on them to test the revised system in full, at all purlin spacings.

If the system has not been tested as a whole then it must be deemed fragile. Any claim to the contrary is unsubstantiated.

Guarantees should serve as a declaration of accountability, confirmation that a job has been carried out to the highest possible standard and a promise that, if a problem does occur, it will be put right.

The industry should be pushing for meaningful guarantees at every stage of the project, not looking for ways to get out of being held accountable for sub-standard practice.

Brian Watson is group development director for CA Group

Readers' comments (1)

  • Very interesting article. Always ask to see the detail behind a 'headline' guarantee; and always read the small-print.

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