Construction Warranty Agreement

Construction Warranty Agreement Template for England and Wales

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Key Requirements PROMPT example:

"I need a Construction Warranty Agreement for a large commercial office development in Manchester, where the main contractor needs to provide warranties to both the developer and the end-user tenant, with particular emphasis on sustainable materials and energy efficiency standards."

Document background

Construction Warranty Agreements are essential documents in construction projects within England and Wales, providing security and assurance to employers, funders, and subsequent purchasers. These agreements are commonly required for commercial property transactions, development financing, and forward-funding arrangements. The warranty provides direct rights of action against contractors, sub-contractors, or consultants, bypassing the limitations of privity of contract. The document typically includes warranties regarding design, workmanship, materials, and professional duty of care, supported by professional indemnity insurance requirements.

Suggested Sections

1. Parties: Identifies and defines all parties to the warranty agreement including the contractor/warrantor, beneficiary, and any other relevant parties

2. Background: Sets out the context of the construction project, underlying construction contract, and purpose of the warranty

3. Definitions: Defines key terms used throughout the document including Project, Works, Practical Completion, and Services

4. Warrantor's Obligations: Details the core warranties being provided regarding design, workmanship, and materials standards

5. Duration of Warranty: Specifies the period for which the warranty remains valid and any conditions affecting the warranty period

6. Professional Indemnity Insurance: Requirements for maintaining professional indemnity insurance including coverage levels and duration

7. Limitation of Liability: Sets out any caps or limitations on the warrantor's liability under the agreement

8. Assignment: Provisions regarding the ability to assign the benefit of the warranty to third parties

9. Notices: Requirements for serving notices under the warranty agreement

10. Governing Law and Jurisdiction: Specifies that English and Welsh law governs the agreement and courts have jurisdiction

Optional Sections

1. Step-in Rights: Rights of beneficiary to step into the underlying construction contract - include when required by funders or purchasers

2. Copyright License: Permission to use design documents and materials - include when design responsibilities are part of the warranty

3. Deleterious Materials: Specific warranties regarding non-use of harmful materials - include when specifically required by beneficiary

4. Novation Provisions: Provisions for novating the warranty to new parties - include when the project might be sold or transferred

5. Third Party Rights: Rights of third parties under the Contracts (Rights of Third Parties) Act 1999 - include when third party rights are intended

Suggested Schedules

1. Schedule 1 - Project Details: Details of the construction project including location, scope, and specifications

2. Schedule 2 - Professional Indemnity Insurance Details: Specific insurance requirements including coverage amounts and duration

3. Schedule 3 - Form of Notice of Assignment: Template for assigning warranty rights to third parties

4. Schedule 4 - Plans and Drawings: Relevant construction drawings and specifications referenced in the warranty

5. Schedule 5 - Underlying Construction Contract: Details or excerpts of the main construction contract relevant to the warranty

Authors

Alex Denne

Head of Growth (Open Source Law) @ ��Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Commercial Real Estate
Residential Development
Infrastructure
Education
Healthcare

Relevant Teams

Legal
Construction
Commercial
Risk Management
Operations

Relevant Roles

Construction Manager
Project Director
Contract Manager
Commercial Director
Development Manager
Legal Counsel
Risk Manager

Industries

Building Act 1984: Primary legislation governing building work in England and Wales, setting out the legislative framework for building regulations.

Construction Act 1996: Housing Grants, Construction and Regeneration Act that regulates payment practices and dispute resolution in the construction industry.

Defective Premises Act 1972: Legislation imposing duties on construction companies to ensure dwellings are built in a workmanlike manner and with proper materials.

Contracts (Rights of Third Parties) Act 1999: Legislation allowing third parties to enforce terms of contracts in certain circumstances, particularly relevant for warranty agreements.

Supply of Goods and Services Act 1982: Sets out implied terms for contracts involving goods and services, including construction services.

Consumer Rights Act 2015: Legislation protecting consumer rights in construction contracts, particularly relevant for residential construction.

Limitation Act 1980: Establishes time limits for bringing legal claims, including construction-related claims.

Building Regulations 2010: Detailed technical requirements for building work, ensuring standards of design and construction.

Building (Approved Inspectors etc.) Regulations 2010: Regulations governing the approval process and inspections of building work.

RIBA Standards: Professional standards set by the Royal Institute of British Architects for architectural practices.

RICS Standards: Professional standards set by the Royal Institution of Chartered Surveyors for construction professionals.

JCT Standard Forms: Industry-standard contract forms published by the Joint Contracts Tribunal.

Health and Safety at Work Act 1974: Primary legislation for workplace health and safety in the UK.

Construction (Design and Management) Regulations 2015: Specific health and safety regulations for construction projects.

Environmental Protection Act 1990: Legislation governing environmental protection during construction activities.

Town and Country Planning Act 1990: Controls over development and use of land, including planning permissions.

Professional Indemnity Insurance Requirements: Insurance requirements for construction professionals to cover professional negligence claims.

Public Liability Insurance Requirements: Insurance requirements to cover third-party injury or property damage claims.

Contract Law Principles: Common law principles governing formation and enforcement of contracts.

Law of Tort: Common law principles governing negligence and liability in construction.

Collateral Warranties Principles: Legal principles governing additional contractual warranties between parties not in direct contractual relationships.

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Authors

Alex Denne

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