Understanding Decennial Liability In Relation To Construction Contracts

By | March 8, 2011

Everyone in the construction industry talks of “decennial liability” but most of them have not got a clue as to what it means. Decennial liability is liability for stipulated occurrences over ten year periods of time. This is particularly applicable as a strict liability under French Civil Law for construction works. Even Common Law countries like the United Kingdom, the United States and Canada have a system of decennial liability underwritten by insurance. The extent and exposure of the parties liable may differ from country to country but the principle is the same.

What is Decennial Liability?

As described in the foregoing paragraph, this is liability that is imposed by law on construction activities for a period of ten years. Any damage or collapse to a constructed structure will require to be reinstated to its original position by the persons responsible. The liability in respect of the part so reinstated will continue to remain for another ten years while the rest of the structure will be subject to the period of liability remaining. As an example, if one part of a building collapses due to a failure in one pile after five years of its completion and the parties concerned repair and reinstate this portion by underpinning the pile and restoring the damaged part. The liability for this part will continue for another ten years while the unaffected parts will be subject to the remaining five years of the period of liability.

Who is held liable?

Article 1792 -1 of the French Civil Code gives a broad brush definition of “builders” as (1) architects, contractors, technicians or other persons bound to the building by a contract of hire or work, (2) any person who sells, after completion, a work which he built or had built (3) any person, who, although acting in the capacity of agent for the building owner, performs duties similar to those of a hirer out of work. The consultants (the one responsible for design and also the one responsible for supervision) and the contractor are jointly and severally liable for any collapse. Therefore, it would mean that the designer (architect or engineer), the supervisor and the contractor are equally exposed to the issues of liability insofar as their respective involvements are concerned. The French law extends the liability to developers and leasing agents as well, who in turn will extend the liability to the first category of people. In Abu Dhabi it is mandatory that supervision of building works should be carried out by a licensed engineering office. Thereby the Abu Dhabi Law on “Organising Building Works” makes designers and/or supervisors liable both for safety during construction and for a period of ten years thereafter. Articles 880 to 883 of the UAE Civil Code attaches, mandatory ten years liability on the contractor, designer and supervisor. Similarly Articles 602 to 697 of the Kuwaiti imposes decennial liability on the contractor and a division of design liability in unclear terms. Saudi Arabian Rules for Implementation of the Tender Regulations – Article 30 and the Oman BCEW Conditions for public works makes the contractor liable for ten years with a requirement for the contractor to review the design of the works. Does this mean that the designer and supervisor is not held liable? According reliable sources not so, they are equally liable according to their interpretation of the law. In the State of Qatar main contractors, design consultants and supervisors are liable under Article 711 of Law No. 22 of 2004 of the Civil Code. Therefore, generally it is the designer (who designs the building), the main contractor (who constructs according to the design provided) and the supervision consultant (who is expected to ensure construction according to the design) are all liable under the Laws cited in this paragraph.

It seems unreasonable to hold the supervision consultant, where he has no involvement or say in the design but supervises the operations to ensure construction according to designs and specifications supplied to him. It would seem that the original intention would have been that the design consultant himself supervises the construction works. However, this is not so in the Middle East. Therefore, it will be up to consultants undertaking supervision work to challenge this concept by proving that they had acted with absolute skill and care and it is not their negligence, lack of care or diligence that caused any damage. The burden of proof will be on them (reverse burden), because the owner does not need to prove fault.

What is the law?

The French Civil Law could be described as the trigger for decennial liability, aimed at protecting the interests of building owners. The Spinetta Statute enacted in France in the year 1978 guarantees the protection relied upon. Articles 1792 and 1792-4-1 of the French Civil Code make it a strict liability on builders for construction works up to ten years from acceptance of the works. There is no need upon the owner to prove fault when any damage of a defined nature occurs in order to claim usually repairs. The Articles of the Laws of the different countries cited in the last paragraph to a great extent states the law, except in Bahrain where the liability is for five years. The UAE’s Civil Code, Federal Law No. 5 of 1985 contains extensive clauses to cover construction work and Articles 880 to 883 impose upon the contractor and the designer strict joint liability for ten years covering any defect in the building designed by the architect and constructed by the builder. It is important to note that Article 880 (1) also makes the supervision consultant liable.

The decennial liability period starts when the works are taken over at the end of the contractual defects liability period on the issue of the defects liability (in some contracts maintenance) certificate. Any defects of whatsoever nature that would appear during the contractual defects liability period do not come within the ambit of decennial liability. Decennial liability starts only after all contractual liabilities are extinguished.

Does that mean that there is no contract in place and the contractor and the consultants are absolved from any further liability?

Not so – decennial liability is a legal requirement and has to be honoured whether included in the contract or otherwise.

What is the extent of liability?

The extent of liability extends to all buildings or any other structures against total or partial collapse and/or a defect threatening stability or safety of the structure.

There is no specific definition of a building or structure in the Laws attributed to Decennial Liability in the Middle East. The NHBC Insurance in the UK though covers specific events so described therein.

Michael Grose and Laura Warren point out in respect of Decennial Liability under the Qatari Code, that liability attaches notwithstanding that the collapse or defect is caused by sub-surface conditions or that the building owner approved the defective work and that buildings or structures, the life cycle of which is less than ten years, attract liability for the duration of that life cycle.

The question often arises in respect of infrastructure projects which has a combination of buildings, structures (like bridges, underpasses, overpasses, culverts etc). Where does one draw the line? I believe that in applying the law one must give it’s simple meaning as perceived from the wording in the Law. A building is simple as defined but the problem of interpretation arises when dealing with a structure. Is road a structure? Probably someone will come up with an answer or seek the courts intervention. In this context it is relevant to refer to Article 880 (2) of the UAE Civil code which translated into English states that “the obligation to make compensation shall remain regardless of whether any defect or collapse arises out of a fault in the land itself or that the employer consented to the construction of the defective buildings or installations. Under Article 1792 of the French Civil Code the damages on a work must, either endanger the strength of the building or affecting it in one of its constituent parts or one of its elements of equipment, render it unsuitable for its purpose.

Is it insurable?

In Europe and the Americas there are insurance companies providing decennial liability insurance. In the United Kingdom for instance all contractors take out the NHBC insurance to cover this risk. I also found an insistence on some owners in Saudi Arabia for contractors to provide such insurance. Under French Law Article L 241-1 a builder must be covered by compulsory liability insurance (assurance de responsabilite obligatoire) and must be covered by compulsory insurance against damage under Article L 242-1. The French law is very strict on these insurances and imposes a punishment of a six months prison sentence and/or a fine of €75,000.

It will be a prudent action on the part of investors in the Middle East dependant on foreign contracting firms for almost all their major construction needs, to insist on providing such insurance. The problem really will arise in the administration after the works is complete and the contractors have left the country. The logistics of the administrative arrangement will have to be meticulously worked out.

Time for bringing a claim

In common law countries the Statute of Limitations will provide the time limit with which a claim should be brought. In the UK for contractual claims it is six years from the first occurrence of the event. In the USA it depends on each States laws.

According to Article 714 of the Qatari Civil Code, claims for compensation must be commenced within three years of the collapse or discovery of the defect. Similarly Article 883 of the UAE Civil Code makes it mandatory for a claim to be brought within three years from the collapse of the building or discovery of the defect.

References:

Bundschuh, G – Risk Brief – Design and Construction (February 2009) – Ames & Gough (downloaded 07.03.2011)
Dimitracopoulus A – Architects Liability Under UAE Law (September 2004) (downloaded 07.03.2011)
Grose, M and Warren, L – Decennial Liability under the Qatari civil code – (October 2007) – Clyde & Co (downloaded 07.03.2011)


28 Comments

Mohammed Awad on March 10, 2011 at 8:05 am.

Normally the liability of the parties to any contract ceases by the expiry of the contract’s duration or the performance of the agreed obligations, this is also applicable to the liability of contractors. When the contract expires, the contractor is no more liable to carry out any new works, or to provide any technical support or any of the obligations arising from the contract.

However, the law may extend the liability of the contractor for construction defects, this liability will normally start at the end of the agreed maintenance period and continue for 10 years.

The laws applicable in many countries impose this liability on contractors, including the countries of common law origin such as Sudan, this reflects the importance of decennial liability and its role in construction industry.

Reply

Haris Deen on March 10, 2011 at 9:35 am.

Yes; Mr. Awad,
You as a lawyer understood the concept exactly as I have explaned. You are absolutely right all contractual liability for construction and defects paten and latent during the contract period, i.e up to the issue of the defects liability (or maintenance in some contracts) certificate. But the legal liability as contained in the law is not extinguished and the parties to whom such law is applicable will be held liable for the stipulated damages and for the stipulated period.

Reply

Mohammed Awad on March 10, 2011 at 12:41 pm.

Thank you very much Dr. Haris for your reply to my comments and also for the article itself. As you know, there are many parties involved i.e the contractor, the supervision engineer and the design engineer, I compared different laws together (including the laws of Sudan and Qatar) the parties are the same.

Mainly the contractor is responsible under the concept of decennial liability but the supervision engineer and the design engineer can also be involved.

The contractor and the supervision engineer are liable together under decennial liability for any construction defects, the engineer who prepared the deign or part of it will be liable for the defects attributable to design, whereas the supervision engineer is responsible for defects related to construction method.

The contractor is responsible for defects relates to the execution of the work but not the design unless the defect is so clear that he should have discovered.

It is very important to refer to the particular provisions of the pertinent law to determine the exact scope of decennial liabilty.

Reply

Hemantha Mendis on March 12, 2011 at 2:34 am.

Hi Dr Deen,
Very interesting and important topic. It will be very useful for me. At present I am employed as the Contract Administrator with the Gladstone Port Corporation Civil Projects Team. We are responsible of managing Deepening of the shipping Channel of the Gladstone Harbour to facilitate Berthing of Large LNG Carriers. I am mainly responsible for the construction of the Dredging Basin that comprises a 8.2 km Bund in the Sea.

I will pass this information to my project team.

Hope you are keeping well !!!!!!

Reply

Adelito Bunyi on March 13, 2011 at 10:12 am.

Hi Dr. Haris,
Thanks for sending this interesting blog.
Is the liability limited to structural damage or collapse?
We had a project in Qassim (KSA) where the owner came to us (Contractor) just before the elapse of the 10-year period. The problem was spalling in some roof beams and slabs, which was starting to collapse, caused by breach in the roof waterproofing. The waterproofers investigated and they sent a report that it was the fault of the MEP whose roof equipment anchors pierced their membrane. The MEP people in-turn said their contract obligations and liability has long expired with the DL period. After months of going-around in circles, the Contractor did the concrete repair, the equipment pads, and the restoration of waterproofing.

Cheers and regards.

Reply

Dr. Haris Deen

Haris Deen on March 13, 2011 at 11:34 am.

Dear Adelito,

Nice to hear from you. The liability is in respect of structural damage and also on collapse. There is no need for the structure to collapse to claim liability as long as there is structural damage. I recall a case in Medina, Saudi Arabia (1979) where there was structural damage to the roof of a sewerage treatment plant built by Taylor Woodrow Construction. The damage occurred after six years of construction completion and Taylor Woodrow had to come back and re-construct the roof.

As for the M&E Sub-Contractor, he has no liability as far as the Employer is concerned. But remember, the design consultant and the supervision consultant are equally liable along with the contractor and this is strict liability which does not need proof of whose fault it was. I hope this clarifies your concerns.

Reply

Troy Dias on March 13, 2011 at 10:32 pm.

Dear Dr. Dean,
Thanks for the article. I have a question regarding UAE Civil Code. Unfortunately I don’t have it with me now but if my memory serves me right Article 880-883 only states the contractor and the designer are jointly liable for total or partial collapse of a building for ten years (minimum – if we want we can increase but cannot reduce it). If that the case, I think the supervision consultant (or the Engineer under FIDIC) is not liable under these provisions.

Reply

Haris Deen on March 14, 2011 at 8:40 am.

Thanks Troy.
You have read Article 880 and 881 of the UAE Civil Code in the right context. The true wording as translated from Arabic does not seem to indicate any liability on the supervision consultant. However, the exclusion contained in Article 881 – “If the architect has not supervised the construction work, he is answerable solely for the defects of the design”. Strictly applied (as translated) this might mean that the supervision consultant is excluded from the equation of liability. Perhaps, one of our readers conversant in Arabic might shed some light on the exact meaning of Article 880 (1) as written in Arabic.

Reply

Ameen Azwer on March 16, 2011 at 12:07 am.

Assalamu Alaikum!

Dear Dr. Haris,

1. Last year I was working for a contractor who was constructing a high rise building in Qatar. The client insisted on issuing ‘Decennial Liability Insurance’ at the commencement, whereas contractor stressed that it should be issued at the completion of the project. This led to a serious dispute and the contractor was preparing to go for an arbitration. I left the company at that point so was not aware of the outcome. Was the contractor correct?

You have emphasised that “Decennial liability starts only after all contractual liabilities are extinguished.” When is the ideal time to issue the certificate?

2. Is it possible to increase or decrease the period of Decennial Liability?

3. “Any damage or collapse to a constructed structure will require to be reinstated to its original position by the persons responsible.”

Should an employer wait until a damage or collapse occurs? Is the contractor exposed to a claim if a defect was discovered and there is no damage yet?

4. What’s time limit for a claim after a damage (one year, two years)?

Reply

Dr. Haris Deen

Haris Deen on March 17, 2011 at 11:32 am.

Ameen, Thank you for your queries for which I respond as follows:

1. To a great extent the Contractor is correct, because, there is no need for the Contractor to incur any expense more than required at the construction contract stage, because the contract itself will take care of his liability during the contract period. He will need to provide the Decennial Liability Insurance (and it will only be effective) after contractual liabilities have been fulfilled and extinguished. Any prudent Employer should insist that the provision of the decennial liability insurance is a pre-condition for the issue of the Defects Liability (Maintenance) Certificate. Thus it is (not so much as an ideal time) but is in the interest of both parties (safeguard for the Employer and less expensive for the Contractor) to issue the Insurance cover at the same time when the completion certificate is issued.

2. No. The period of liability is as stated in the Law of the Country in which the works are executed. Decennial means occuring in ten year periods. Some countries like Bahrain have a lesser period.

3. Please read my article fully for an answer to this.

4. Please read my article fully for the period of limitation.

Reply

Troy Dias on March 20, 2011 at 11:50 am.

Whist I still maintain my opinion that BQ should not use to identify the Scope of Works, in the same context I further disagree with you that BQ quantity should be used for the purpose of valuing variations.

Generally, in relation to the valuation of variations, standard forms include two important provisions; (a) variations should be measured and (b) valued using rates and prices contained in the Contract (if applicable). Thus, in both omissions and additions, quantities should be measured using the Contract Drawings and the revised Drawings. On the same token and in extreme cases, you could deduct more than the Contract Price in case of a variation. For example in a curtain walling contract (lump sum price of 5 million) with BQ includes only one item for curtain walling (1,000 m2 and 5,000 per m2) and CA instructed to change the curtain walling to cladding (rate = 5,050 per m2). In this case, if the measured quantity is only 1,050 m2, then actually the Contract Price will be increased by 52,500 as the omitted value exceeds the Contract Price.

Reply

Troy Dias on March 20, 2011 at 11:56 am.

Sorry – just noticed – my above comment is not related to this article.

Reply

Amal Jayasuriya on March 21, 2011 at 11:11 am.

BUILDING CONSTRCUTION INDUSTRY
DECENNIAL LIABILITY FOR BUILDINGS
The above law is prevailing in France and the Middle East countries like e.g UAE allows the “Builder” to be liable to the owner or the developer for damages for any structural defects of a building upto 10 years from the time of final hand over.
Decennial Liability being part of the Law of the country is above any contracts that parties enter into for construction works, which means liability of the builder is guaranteed by the law and this cannot be altered by way of any contracts of which may become unlawful if found to be contradicting with the country’s laws. Hence, the government of a country who has this law shall enforce it on all construction contracts that fulfill the criteria.
The purpose of this article is to highlight multiple issues that need clarification on the Decennial Liability law from the point of an Architect / Builder as this law forces major liability on Architects and Builders as interpreted by the law.
• The term builder is used to interpret the construction team which during the recent past is headed by the Architect. Thereby, Architect was vested the full responsibility of delivering the project to the client. The management of contractors, supervising the works was part and parcel of the responsibilities of the architect.

However, it is a common fact that with the modern projects, parties to the project are many with varying responsibilities and different types of procurement systems are used to engage specialists in many fields which contribute to the project. In this scenario it has been noticed that the Architect has lost most of the control of the project and sometimes limited to preparation of construction drawings. As a result, the liabilities of each party will be limited to the services provided.

This shows that in modern projects it will be extremely difficult to establish the liability for a certain defect as all services are inter-related.

However the basic interpretation in the law is very broad and will legally cover all parties as being responsible.

• Law explains that the liability is limited to 10 years in the case of buildings which are intended to have a life span of more that 10 years, However, this may not be applicable to buildings which is intended to last less than 10 years. This concept is extremely ambiguous.
1.1 What is a “building”
This is explained as any man built element, hence will include roads/dams/infrastructure projects ect. However different issues persists in these types of project which needs further investigation when enforcing Decennial Liability.

1.2 Life span of a building
This concept of life span has many aspects. To name a few,
• Economical lifespan
• Structural lifespan
• Aesthetical lifespan
• Functional lifespan
The law is applicable for buildings having a lifespan of more than 10 years. Hence, the concept of lifespan is very critical in enforcing the law.
It is a common fact that 99% of the developers or clients do not emphasise the lifespan of their building needs. The modern market driven economy is pushing consultants and contractors to be ever more economical in their works and constructions to ensure that the project becomes financially viable and as a result will be a profitable investment to the developer. Hence the lifespan of a building is critical in design stage to ensure that the project becomes economically feasible.
Then, to make all this happen who decides the lifespan. is it the Developer, Architect, Structural Engineer? With the lack of clarity on this matter, it will most probably be the structural engineer who will design the structure which will last to a generally accepted lifespan.( Structural Lifespan)
But, as far as the architect and developer are concerned, more emphasis will be on the Economical lifespan and the Functional lifespan, which will decide whether a building will be in use in future.
Another aspect of designing buildings is that all buildings are designed for a purpose or a specific function. As a result designer is fully responsible for the developer to ensure that the building serves the purpose which it was intended to. Hence the emphasis is more on the functional lifespan while the building is at the design stage thereby the responsibility of the Architect is restricted to the extent where the building is used for the intended function. Which means, if the developer decides to change the function due to commercial interests or any other reason, the Architect’s responsibility for the building may become unenforceable. This is common to all consultants, including structural.
Hence, it is clear that the concept of lifespan of the building may become a controversial issue when enforcing Decennial Liability.
The above issues needs more clarification in terms of to what extent the Decennial Liability Law addresses the above matters.

The following article is an extract on the Decennial Liability which also emphasizes some more issues.
Filed in Construction Industry, Contract Administration on Jan.29, 2010
By Lisa Dale & Steven Hunt

Since the advent of Dubai’s construction boom circa 2002, fuelled by the relaxation of restrictions on property ownership by foreign nationals, thousands of new residential property units have been completed by developers and handed over to their new owners for occupation. This relatively recent phenomenon of home ownership on any significant scale has heightened the need for both contractors and developers to understand their potential legal exposure to home owners when defects begin to appear in the properties that they have either constructed or sold to them.
Property defects can range from major structural defects that threaten the stability of a building, and in some cases cause its partial or total collapse, through to more minor non-structural defects such as a leaky roof or loose floor tiling. In this article, we explore the principles of decennial liability and latent defects under the laws of the United Arab Emirates (“UAE”) and Dubai, and address the issue of contractors’ and developers’ liability in respect of each. This article does not seek to address either contractual liability or tortious liability, both of which also require consideration as circumstances dictate.
Decennial liability
Decennial liability is a form of strict liability arising from the French Civil Code. It has been widely adopted in Middle East civil code jurisdictions, including the United Arab Emirates, Kingdom of Saudi Arabia, Kuwait and Qatar.

The UAE Federal Civil Code: Supervising architects and contractors liable to Developers
The source of decennial liability in Dubai is to be found in the UAE Federal Civil Code¹ (“Civil Code”), in Articles 880-883. In summary, these Articles provide that the contractor and the supervising architect (which, where the context permits, can mean the supervising engineer) are jointly liable to the employer for a period of ten years from the date of delivery of the work if:
The building constructed or installation erected suffers total or partial collapse; or
There is a defect which threatens the stability or safety of the building.
The available remedy to the employer is compensation, and the obligation to compensate arises notwithstanding that the collapse or defect arises out of a defect in the land or that the employer consented to the construction of the defective buildings or installations. This all applies unless the contracting parties intended that the installations should remain in place for less than ten years.
It is not possible for the supervising architect or contractor to “contract out” of decennial liability or to limit his liability. However, it should be emphasised that where the role of the architect is simply to prepare plans and not to supervise their execution, he is liable only for defects in the plans.
The “no fault” concept of decennial liability contained in the Civil Code is somewhat onerous for supervising architects and contractors when compared with many common law jurisdictions, where liability will generally only attach to architects and contractors if they have failed to perform their professional obligations in accordance with the requisite standards of professional skill and care.
It is clear from the foregoing that the supervising architect and contractor is liable only to the developer, as the employer, under the decennial liability provisions contained in the Civil Code. Subject to what we say below regarding a contractual extension of liability under Article 254 of the Civil Code, the architect and contractor are not liable to the home owner under the principles of decennial liability as there is no direct contractual relationship between them.
Dubai’s “Strata Law”: Developers liable to home owners?
Whilst the Civil Code provisions relating to decennial liability described above impose potential strict liability only on supervising architects and contractors, there are provisions in Law No (27) of 2007 on Ownership of Jointly Owned Properties in the Emirate of Dubai (the so-called “Strata Law”) which, in the context of strata developments, apparently extend the concept of decennial liability to developers towards home owners and Owners’ Associations. Article 26(1) of the Strata Law states (in translation):
“In compliance with the construction contract provisions in [the Civil Code] the Developer remains liable for 10 years from the date of completion certificate of the building to repair and cure any defects in the structural elements of the Jointly Owned Property notified to him by the Owners’ Association or a Unit Owner.”
Articles 880-883 of the Civil Code, which contain the decennial liability provisions described above, are the only Articles in the Civil Code that specifically refer to a 10-year liability period for structural defects in relation to construction contracts (hence the term “decennial”). The implication is, therefore, that although the statutory remedies differ, the effect of Article 26(1) of the Strata Law is to extend the application of decennial liability to developers vis-à-vis the owners of their properties in strata schemes and their Associations (the latter with regard to the common areas in such schemes). We are not aware that this has yet been tested before the Courts or any arbitration tribunal. At the very least, however, the effect of Article 26(1) is to extend a developer’s liability for latent defects in the structure of the property beyond the original contracting purchaser of his property to all persons who own that property within the first 10 years of its completion. Latent defects generally are discussed further below.
Latent Defects
The examples referred to earlier of loose tiles and leaky roofs fall within the realm of latent defects. Simply put, latent defects are defects which are neither discovered nor capable of being discovered at the time of issuance of the certificate of practical completion for the building. They may be of a structural or non-structural nature.
The UAE Federal Civil Code: Contractors liable to developers; developers liable to purchasers
There are no provisions in the Civil Code that specifically deal with latent defects in relation to muqawala (construction contracts). However, the Civil Code does recognise the principle of latent defects elsewhere, for example in Article 544. This relates to sale of goods, but the principle has broad application, including arguably in respect of construction related issues.
Article 544 of the Civil Code deals with “old” (pre-existing) defects in goods sold and defines such defects as follows:
“(4) for a defect to be regarded as old it must have been latent, and a latent defect is one which cannot be observed by an external inspection of the goods, or which would not be apparent to the ordinary man, or which could not be discovered by any person other than an expert or which would only be apparent upon testing.”
Thus, by virtue of the construction contract, a contractor is potentially liable to the developer for latent defects appearing in the property that he constructs; and by virtue of the property sale contract, a developer is liable to a purchaser for the same latent defects. One mechanism that a developer might employ in order to make the contractor directly liable to the purchaser is founded upon the provisions of Article 254(1) of the Civil Code which states (in translation):
“It shall be permissible for a person to contract in his own name imposing a condition that rights are to enure to the benefit of a third party if he has a personal interest, whether material or moral, in the performance thereof.”
In other words, a construction contract may contain an express provision that, depending upon its precise drafting, effectively enables a purchaser (as an interested third party) to directly enforce remedies for defective property against the contractor. This would not, however, necessarily relieve the developer from his own liability to the purchaser.
Conclusion
In this article we have sought to explain the remedies that are available as a matter of general law under the UAE Federal Civil Code when property defects occur after the property has been handed over by the developer to the home owner. We have looked at both decennial liability and liability for latent defects, in the context of both a contractor’s and developer’s exposure for the same.
Of course, a construction contract or property sale contract will usually contain express warranties regarding defects, which often provide wider rights to the purchasing party than those afforded under the Civil Code. A review of the contract is therefore also important, alongside the provisions of the Civil Code.
Finally, in this article we have not explored the remedies available when property defects occur, the role of insurance or the applicable limitation periods within which claims need to be brought. Each of these factors are also of relevance and must be considered when a party, be it the contractor, developer or home owner, is involved with a claim for defective property.
——————————————————————————————————————————

Reply

Haris Deen on March 22, 2011 at 11:46 am.

Thank you very much Amal, nice to hear from you from far away Namibia:

Although, I do not wish to contradict what you have stated at length, I believe that you have gone about it on the wrong track.

There are three factors you have described in connection with “DECENNIAL LIABILITY TO BUILDINGS” which needs to be responded to. They are:

1. The Decennial Liability Law is prevailing in France and the ME Countries.

Response: Decennial liability is not only prevalent in France and ME Countries it is also a case of law in the United Kingdom, Canada and some States in America.

2. This law “allows” the ‘Builder’ to be liable to the owner or developer for damages for any structural defects of a building upto 10 years from the final hand over.

Response: No sir, it does not ‘allow’ the builder but makes the liability mandatory on the Contractor who builds and the Designer who provides the design jointly and severally. In most parts of the world the Designer (Architect or Engineer depending on the project) also supervises the works as such the liability is comprehensive. The difficulty arises where the supervision consultant is different from the design consultant, like in the ME. That is why Article 882 of the UAE Civil Code makes the Architect solely answerable for the defects in his design where he has not supervised the construction.

You have also assumed that the 10 years liability is only for “buildings”. This suggests that you have not read my article well enough or misunderstood what is stated therein. Article 880 of the UAE Civil Code makes it absolutely clear that “where the object of the enterprise contract consists in the erection of buildings or of any other fixed edifice …..” (emphasis mine). Therefore it would appear that it is not only ‘buildings’ per se that are covered but a variety of construction works that would be defined as structures.

3. The term builder is used to interpret the construction team.

Response: It appears that you have misunderstood the broad categories of people given in Article 1792 of the French Code under the definition of “builders”. It does not mean that all of them or for that matter every one of them will be liable. It will apply only apply to the “Designer” and the “Builder” who is bound to the building by a contract of hire or work. The contract for design is only with the Architect or Engineer as the case may be. The liability is upon these people.

4. Modern projects have several parties with varying responsibilities, thereby the Architects control is lost, as such liabilities of each party ‘will’ be limited to the services provided.

Response: Yes! You are right. Modern projects have several parties including a project manager, with varying responsibilities. But their liabilities are limited to their scope of work and covered by their own professional liability insurance. The Decennial Liability does not extend to these other people. That is to people other than the designer and constructor which include the supervisor in certain countries.

Apart from the above your reference to Article 254 of the UAE Civil Code has no relevance. It only applies to contracting arrangements allowing a person to “contract in his own name with regard to obligations which he stipulates to be in favour of a third party, if he has any personal or material or moral interest in the performance of such obligations”. This will apply only if a contractor undertakes the responsibility of another party to a contract. This will allow for any assignment or other arrangement to be made during or at the time of entering into a contract.

Your reference to UAE Law No 27 of 2007 amended in 2010 is correct. This is in line with the French Civil Code 1792 section (2) or (3).

Article 544 of the UAE Civil code has been cited out of context, therefore I would not comment.
Thank you for pointing out some of the UAE Civil Code general law provisions, which are useful but relevant to my article on Decennial Liability.

Reply

Mohammed Awad on March 29, 2011 at 2:06 pm.

With regard to the duration of Decennial liability and the ability of the parties to agree to a longer period of liability, it is very important to refer to the terms of the pertinent law applicable to the contract so as to determine the exact duration stated by the law (in some cases the duration of the liability can be less than 10 years e.g in case of temporary buildings intended to be removed after 9 years, the liability period will be 9 years).

The law may allow the parties to extend the duration of this liability by mutual agreement.

Reply

Thaddee H Madilo on April 18, 2011 at 1:37 pm.

Hi Dr Haris Deen
my question is in construction contract how the liability of each of the parties involved showing legal rights and responsibilities.
thanks

Reply

Aarti on May 17, 2011 at 9:51 am.

Dr Harris Deen

Thanks for this article. There is reference to the Qatari Civil Code Law No 22 of 2004, how does the Contractor submit a decennial Liability in Qatar and what is the insured amount.

Reply

Dilan on June 2, 2011 at 11:31 pm.

Dr Haris Deen,
The Tender document for new building in Qatar has state, contractor is liable for the Decennial liability, on the Appendix to tender. However a Tenderer has put a condition on his offer as follow;
“The offer has excluded the Decennial liability”.

My understanding is, if the client accept the offer, the contract will be void.

Because;
Contract will has form, just after the offer has been accepted by the Client. The offer excluded the Decennial liability.Hence the Contract is excluding Decennial liability.
According to Article 415 on Qatar Civil code, Contracts which are exclude Decennial liability are void.

Am i correct?

Reply

Haris Deen on June 12, 2011 at 10:53 am.

Dear Dilan,

There are two issues arising out of your question:

If the tenderer submitted a tender different to tender requirements – in your case excluding decennial liability when the tender requirements states otherwise – It will be a non-conformimg tender and should be rejected as it would not be fair on the other tenderers who submitted conforming tenders.

On the other hand decennial liability is a legal requirement. Any contract containing clauses excluding legal requirements will be invalid.

Reply

Dr. Haris Deen

Haris Deen on June 12, 2011 at 12:17 pm.

Dear Dilan,
Thank you for or query.

Imposition of penalty or liquidated damages has nothing to do with civil law common law. It is question of choice.

Penalty is not any calculated amount of loss damage. Therefore, proof of loss or damage is not required to impose penalty.

Liquidated Damage is a pre-estmated cost of damage or loss that the Client / Employer might incur as a result of delay that would liquidate the Client / Employer from his losses. To impose liquidated damages proof of loss or damage might be required.

Reply

Elaine on June 8, 2011 at 1:25 pm.

Dear Dr Deen,

Will the provisions of the Civil Code relating to decennial liability apply if the engineer or the contractor does the design/construction of the works, for free i.e. there is no consideration?

Reply

Dr. Haris Deen

Haris Deen on June 12, 2011 at 11:47 am.

Dear Elaine,
Thank you for your query,
Decennial Liability is a legal requirement, and would apply in respect of services undertaken by a consultant which is relied upon by the Client irrespective of lack of monetary consideration. The consultant as a professional has a duty of care to his client whether he does the service for a fee or for free. Both the designer and the contractor who executes the work will still be held liable.

Reply

Haris Deen on June 12, 2011 at 11:48 am.

Dear Elaine,
Thank you for your query,
Decennial Liability is a legal requirement, and would apply in respect of services undertaken by a consultant which is relied upon by the Client irrespective of lack of monetary consideration. The consultant as a professional has a duty of care to his client whether he does the service for a fee or for free. Both the designer and the contractor who executes the work will still be held liable.

Reply

Hassanr on September 12, 2012 at 10:06 am.

We are sub contractor for a marine port. We are doing a design and supervision of installation of a corrosion protection system.
The main contractor has included in the subcontract agreement that we (subcontractor) shall provide a 10 year warranty under the dicennial liability requirement.

1. Are sub contractors liable for this type of liability?
2. Can subcontractors get insurance for it?
3. If we are NOT liable – and we sign the contract with the clause, is the clause legally binding?
HS

Reply

Dr. Haris Deen

Dr. Haris Deen on September 12, 2012 at 2:01 pm.

Yes, sub-contractors’ works are subject to decennial liability. The sub-contractor must provide this under collateral liability to the contractor as he has no contract with the client. Yes, insurance can be obtained.

Reply

Hashim on March 17, 2013 at 3:54 pm.

Dear Dr. Deen,

I think I came to this wonderful post a little late and I really hope you can respond to my query.

I am thinking about the Joint & several Liability part between the Contractor and a Designer (particular to UAE Civil Law Articles 880-883).

What happens if a building collapses purely due to Design Issues. Will the Contractor get a chance to prove that he could not have identified the short coming in design? Or the Joint Liability can be used by the Client to get his money from the Contractor, leaving latter responsible to get it from the Designer?

Also, I would like to know your opinion on the applicability of Article 291 in this regard.
“If a number of persons are responsible for a harmful act, each of them shall be liable in proportion to his share in it, and the judge may make an order against them in equal shares or by way of joint or several liability.”

Best regards

Reply

shoaib on November 19, 2014 at 1:42 pm.

Superb

Reply

Dr. Haris Deen

Dr. Haris Deen on November 19, 2014 at 3:46 pm.

Thank you Shoib, Please keep reading and raising any query you might have on contractual issues, I will be pleased to respond to the best of my ability

Reply

Leave Your Comment

Your email will not be published or shared. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>