• Limiting the Period of Liability for Construction Defects
  • August 24, 2013
  • Law Firm: Rutan Tucker LLP - Costa Mesa Office
  • Under California law, contractors may be held liable for their defective work for a period of four (4) years following the date: (i) of actual discovery of the defect and its negligent cause, or (ii) that the defect and its negligent cause could have been discovered through the exercise of reasonable diligence. As most construction defects are latent (i.e., not apparent by a reasonable inspection) and subject to delayed discovery, this “Delayed Discovery Rule” permits lawsuits against contractors many years after they have finished their work and is limited only by the ten-year statute of repose set forth in Code of Civil Procedure Section 337.15. Accordingly, most contractors assume that they are liable for their defective work for a period of ten (10) years following completion of the project. However, a recent California Court of Appeals decision holds that such liability may be shortened to as little as four (4) years for prime contractors, provided the prime contract includes provisions whereby the “Delayed Discovery Rule” is unambiguously waived by the parties.