Construction Law/Defects Liability Guarantee
I am Contacting you to inquire about an issue related to Defects Liability Guarantee in the case of Termination by Contractor as clause 16.2 in Fidic 1999 Red book in this case ،
The Employer substantially fails to perform his obligations under the Contract in Financial Arrangements as clause 16.2.a , So the Contractor notice to the Employer to terminate the Contract , The two parties ( The Employer and The Contractor ) agreed to Termination the Contract and Calculate all the works Executed , to be paid at contract prices ,
The Question is ,
Does the contractor is required to Submit the Defects Liability Guarantee of these works Executed , for one year from the date of Taking Over of the Works .
Thank you for this question. The answer will depend upon the timing of the events and I have tried to explain, below, the different scenarios.
If I understand the issue correctly, the termination occurred before the works were completed and, therefore, before a Taking-Over Certificate became necessary. As such the Contractor is not obliged to provide the Defects Liability Guarantee as this was, at the time of the termination, a future obligation.
Even if the works were completed I doubt that the Contractor is obliged to submit the Defects Liability Guarantee if the termination precedes the obligation for the Guarantee.
If, however the obligation on the Contractor had arisen before the termination, the Contractor will have to provide the Guarantee. Termination affects only the performance of obligations falling after the date of termination.
I hope that this assists you.
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