Implied Warranties


Thursday, September 21, 2017

No matter what the terms of your written contracts there will always be warranties about the quality of your work.
An implied warranty is a promise that something that is sold is fit for the proper purpose for which it is sold. It doesn’t need to be written down in a contract because it is ‘implied’ by law.
Implied warranties are automatically added into any contract (written or oral) between a seller and a buyer, even if they don’t agree on the term. This is to impose minimum standards of quality on sellers, dealers and manufacturers.
For example, when buying a car, the Fair Trading Act (Australian Consumer Law) creates ‘implied warranties’.
Implied warranties require vehicles sold to:
  1. Be of satisfactory quality;
  2. Be fit for the purpose for which they were bought;
  3. Be the same as any description of the goods prior to the sale; and
  4. Be the same as any sample of the goods that was offered to the buyer before the sale.
Most construction contracts have an express warranty that is written in the contract saying that the builder/contractor will fix any problems resulting from the work for a certain amount of time after the work is done. But what if there is no warranty clause? These contracts also have implied warranties.
Like in a buying/selling contract, implied warranties in a construction contract may not be dependent on any promises between the builder and the person building the property. For example, section 11 of the Building Contracts Act 1991 (WA) stipulates that in all contracts for building that the builder must fix any defects that occur within four months of the date of practical completion. The date of practical completion is when the work is completed, except for any defects which don’t prevent the building work being reasonably capable of being used for its intended purpose.
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