Defects Liability in Steel Structure Contracts: What to Define

Defects liability in steel structure contracts is the period after handover when the contractor must fix defects at its own cost. It is not the same as a general warranty, and the wording matters. Define which defects are covered, for how long, how they are reported and what is excluded, before the contract is signed.

What defects liability means

A defects liability period starts at handover or practical completion. During it, the contractor returns to correct faults that arise from poor materials, workmanship or design in its scope. A related idea is a warranty, though contracts often treat the two differently, so read each clause.

Choosing the period

The period depends on the contract and the market. Define separate periods where parts differ: for example, structural steel may be covered for longer than coatings or accessories. Say when each period starts and what restarts it, such as a repair.

What to define for defects liability in steel structure contracts

• Covered defects. Fabrication errors, welding defects, wrong materials, coating failure that arises from poor preparation, and erection faults in the contractor's scope.
• Exclusions. Damage from misuse, overloading, changes made by others, lack of maintenance, accidents and force majeure.
• Reporting. How the owner notifies a defect and how quickly the contractor must respond.
• Remedy. Repair or replace, at whose cost, and who pays for access, such as cranes or scaffolding.
• Evidence. Which records decide whether a defect is covered.

Records that settle disputes

Most disputes turn on records. Keep the shop drawings, the mill certificates, the welding and inspection records and the coating reports. Our guides to mill test certificates and to steel factory quality control describe the documents. Photographs of the delivered condition, such as those taken in a pre-shipment inspection, also help.

Maintenance duties of the owner

Many exclusions depend on maintenance. A coating needs inspection and touch-up; a roof needs clear gutters. Write the owner's maintenance duties into the handover documents, and keep a log. Our guide to maintaining steel structures lists the checks.

Scope and responsibility

The party responsible for a defect depends on who did the work. If one steel structure contractor carries design, fabrication and erection, responsibility is simple. If scopes are split, define the interfaces. Our article on what a steel structure contractor provides explains the usual splits.

Responsibility for design versus fabrication

If the contractor also designs the structure, a design fault is the contractor's to fix. If the owner's engineer designs and the contractor only fabricates and erects, a fault in the design is not the contractor's liability, but a fault in making the steel to the drawings is. State this split in the contract so that a defect claim starts from a clear division of duty.

Questions before signing

1. What is the period for each part of the work, and when does it start?
2. How are defects reported, and what is the response time?
3. Which records decide a claim?
4. What is excluded, and what does the owner have to maintain?
5. Is there any security or retention linked to the period?

Contract terms differ by country and by project, so have a lawyer review the final wording. This article is general information and not legal advice.

If you would like to discuss the warranty and defects terms for a project, contact the engineering team and send the draft contract.

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