In Justin Sweet’s authoritative work Defects, the term “defect” is defined as “a failure of the completed project to satisfy the express or implied quality or quantity obligations of a construction contract.”
The question of whether a defect is patent or latent is determined objectively. A latent defect is one that would not be apparent in the course of a reasonable inspection. A particular defect may be latent to the casual observer, but patent to a construction professional, such as an architect or engineer. In a commercial context, there are cases that suggest that a defect is patent if it is reasonably discoverable with the benefit of such skilled third-party advice.
The Omani perspective
The Fédération Internationale des Ingénieurs-Conseils (FIDIC) Conditions of Contract for Construction, more commonly known as the FIDIC Red Book, is commonly used for building and engineering works designed by the employer in Oman. (This article references the 1999 first edition.)The provisions in the Red Book dealing with latent defects are generally consistent with the position under Omani law, essentially that contractors may be liable for latent defects discovered after the performance certificate has been issued by the employer.
Many of those familiar with the construction industry in the Middle East region will be familiar with the term “decennial liability.” In particular, many will be familiar with a requirement that, in relation to works performed under a construction contract, a contractor and an architect remain legally liable for a period of 10 years after the completion of the works.
A number of countries in the Middle East have similar legal provisions in that regard. Generally, neither a contractor nor an architect can contract out of the liability. The liability is a form of strict liability. There are some differences of opinion among the legal profession as to what extent (if any) a claimant needs to prove fault or causation against a contractor or architect, but it is clear that there is no obligation on a claimant to prove negligence, or a failure to achieve an industry standard, etc. To put it another way, there is no requirement to demonstrate the contractor or architect was “negligent,” but there are some differing views as to what extent (if any) there is a need to show that some action or inaction by the contractor or architect caused or contributed to the loss and damage.
In most parts of the Middle East, where there is a law imposing decennial liability, it only applies where the relevant structure has collapsed or suffers a major structural defect. The law in Oman is far more extensive. The relevant provisions of Sultani Decree 29/2013 (the “Civil Code”) are typical of what might be found in other jurisdictions in the Middle East, in that liability is limited to total or partial collapse, and defects affecting the stability or safety of the works.
However, the Engineering Consultancy Law promulgated by Sultani Decree 27/2016 (the “Engineering Consultancy Law”) provides that decennial liability extends to any defect, not just defects leading to collapse or those affecting stability or safety. This would suggest that the contractor and the engineer remain liable for ten years for even minor defects.
In summary, decennial liability is broader in Oman than elsewhere in the Middle East, and can cover defects, both patent and latent, that are neither structural nor safety-related. It is important that, when drafting contracts, contractors and consultants consider how best to allocate risk and protect themselves from claims. It is also critical that parties to construction contracts keep good records to protect themselves from such claims, including photographs of works, and any relevant warranties given by manufacturers and suppliers.
