Limitation period in latent defects

Abstract

Under traditional contract, a contractor is responsible for the quality of material and workmanship either being expressed in the contract document or by implication. Contractors often believe that the latent defects is no longer their responsibility after the job is handed over to the employer or subsequent owner. On the part of employer or subsequent owner, the action taken against the contractor sometime was already too late since it may take year for them to discover the latent defects that occur. Much worse, an employer or subsequent owner does not realise the duration given to him under the statute to take an action. Once claimed barred by the statute, the contractor is no longer liable to the employer or subsequent owner. The objective of this study is to determine the recoverability of damages for latent defects caused by contractor under traditional contract. The research is done by analysing the law cases involved with limitation period and latent defects. Based on the research, it was found that if the aggrieved party wish to bring an action under the law, claim under contract and tort shall be brought six (6) years from the cause of action accrues. The cause of action for contract start from the date of breach, if it involved fraud, the right of action shall not start until the fraud is discovered. As for claim founded under tort, there are three (3) possible date of accruals which are, one, the installation date of the defective works; two, the date latent defect discovered or; three, the date of actual damage. As long as it is still within these duration, the employer or subsequent owner may pursue claims against the contractor for damages, provided the defects are as a result of the contractor's breach of contract.