Latent Defect Guarantee in EPC Contracts

This Skill Bit shows, that latent defects, hidden flaws undetectable at project handover, pose risks post-completion. The Latent Defect Guarantee clause in EPC contracts obligates Contractors to rectify such flaws, typically within a shorter, distinct period, at no extra cost to the Owner. It covers defects unseen during usual inspections, emphasizing materials, design, or workmanship issues compromising project integrity. Contractors must repair or replace faulty components, notified by Owners within the guarantee period. This clause safeguards Owners, incentivizes quality construction, but requires clear definitions, and proper documentation.

Duration approx. 4 Min.

Tier: advanced

A part of Contracts – Mastering EPC Key Clauses course.