Warranty/Guaranty Provisions in Construction Contracts -

The most confusion I have seen in the discussion of construction topics concerns the concepts of “warranty” and “guaranty.” This article will address the confusion, explain the important distinctions between these two concepts, and describe how to effectively administer and enforce warranty and guaranty provisions in construction contracts.

Warranty -

In a typical construction contract warranty provision, the contractor “warrants” or “represents,” or covenants, that its work will be performed in accordance with certain standards stated in the contract (e.g., in “a good and workmanlike manner”) and otherwise be free of defects and in conformity with the design documents. While the term “warranty” or “warrants” is often used in connection with this concept, it really pertains to any provision in the contract, whether a representation or a covenant, which prescribes a standard of performance governing the contractor’s work.