FAQ

FAQ: Acceptance of work and liability for defects

• H.1 How are deviations resolved before acceptance of the work?

  All alliance partners undertake to notify the alliance management team immediately if deviations from the agreed objectives (characteristics of the building or other works or services owed, deadlines, etc.) become apparent. This is intended to enable all realization partners to react quickly in order to keep the disadvantages for all alliance partners as low as possible. This obligation is not limited to their own services and areas, but extends to everything that an alliance partner performs.

  All deviations from the agreed objectives that are identified or are foreseeable before acceptance of the work shall be rectified by those realization partners who are best suited to do so, regardless of the cause and the question of who caused the deviation. The costs incurred shall be charged to the target costs 1.

  If a subcontractor of an alliance partner (or of several alliance partners) is liable for the deviation or for its consequences, this subcontractor must in principle carry out the rectification at its own expense (and thus without affecting the cost price of the alliance partners), and the alliance partner(s) concerned must assert their claims under the subcontract.

   

• H.2 How are defects fixed during the acceptance test or after acceptance of the work?

  The realization partners owe the client defect-free services within the scope of the service areas contractually assigned to them.

  The alliance partners undertake in the alliance agreement to assume the performance obligations in connection with the rectification of defects and to receive (reduced) remuneration for this in accordance with the rules on target costs 2. This agreement applies regardless of who contributed to the occurrence of the defects in question.

• H.3 Who is liable for remedying defects?

  In the event of defects, each implementation partner is obliged to carry out the defect rectification work assigned to it by the project alliance in accordance with the contractually agreed principles in return for remuneration under the target cost 2 regime.

  If a subcontractor or supplier is liable to an alliance partner (or several alliance partners) for the deviation or for its consequences, the claims for rectification of defects must be asserted against the subcontractor or supplier.

• H.4 What happens if a realization partner refuses to rectify a defect?

  This case should not actually occur, as the realization partner called in to rectify the defect is reimbursed for the costs incurred.

  If such a refusal nevertheless occurs, another realization partner or a third party called in by an alliance partner shall remedy the defects at the expense of the target costs 2.

  A refusal to do so would also constitute an intentional breach of contract and entail the corresponding consequences (in particular the obligation to pay damages).

• H.5 Why should the client pay for the rectification of defects at cost price?

  If the joint assumption of risk were to cease with the acceptance of the work, this would have the effect that a party responsible would have to be found for defects discovered after acceptance. This would in turn lead to the familiar discussions about apportioning blame. This would create an incentive during planning and execution, particularly towards the end of the implementation phase, to conceal any defects identified and to try to blame them on another partner later. This considerably weakens the principle of joint risk-bearing.

  For this reason, Factsheet SIA 2065 opts for joint risk-bearing until all defects reported by the client during the notification period have been rectified. Target costs 2 are agreed for the services to rectify the defects.

  The frequently expressed assumption that the client would not pay for the rectification of defects in the traditional models is also incorrect. Providers must take into account the costs of rectifying defects in their quotation calculation by adding appropriate risk surcharges. The client therefore pays for the rectification of defects in the traditional models as well, just less transparently.

• H.6 What deadlines apply to warranty rights?

  The Factsheet SIA 2065 recommends agreeing a special regime for the notification and limitation period in the alliance agreement (see Figure 16 of the Factsheet).

  According to this, the client should be able to give notice of all defects discovered after acceptance for a period of five years, regardless of when they were discovered (after acceptance). In addition, his contractual rights arising from the defects should expire after seven years, so that even if defects are notified at the end of the five-year notification period, he will not be under undue time pressure if, contrary to expectations, legal proceedings have to be initiated.

  The parties may also provide for longer complaint and limitation periods for individual parts of the work within the framework of mandatory statutory law.