Warranties and the UCC

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Author Message David Axt, AIA, CCS, CSI Senior Member Username: david_axt Post Number: 839 Registered: 03-2002 Posted on Thursday, March 22, 2007 - 04:29 pm:    There has been some discussion at my office about warranty requirements in the specs actually limiting the owner's rights under the Uniform Commercial Code. For example if we say that the product must have a 2 year warranty we actually may be cutting the warranty period short by 4 years since UCC warranty requirements are 6 years. Can someone please explain further. Thanks! Robert W. Johnson Senior Member Username: bob_johnson Post Number: 141 Registered: 08-2004 Posted on Thursday, March 22, 2007 - 04:42 pm:    Look at PRM 5.16.3, 5.16.3.2, 5.18, 5.18.1-10. John Bunzick, CCS, CCCA Senior Member Username: bunzick Post Number: 685 Registered: 03-2002 Posted on Thursday, March 22, 2007 - 04:42 pm:    You very well may be limiting the owner's recourse by specifying a warranty clause, but not becaues of the UCC. The uniform commercial code will only affect transactions between the contractor and the manufacturer, not between the contractor and the owner, because construction is not considered a commercial transaction. The terms of the contract and the statute of repose in effect in your state would govern the overall warranty on a construction project. The Project Resource Manual has an extensive discussion on warranties in section 5.18. Anne Whitacre, FCSI CCS Senior Member Username: awhitacre Post Number: 492 Registered: 07-2002 Posted on Thursday, March 22, 2007 - 08:35 pm:    David: don't the people in your office have enough work? why are they talking about this stuff? Wayne Yancey Senior Member Username: wyancey Post Number: 327 Registered: 05-2005 Posted on Friday, March 23, 2007 - 11:15 am:    David, I searched the UCC but could locate the 6 year period of which you spoke or any mention of warranties for that matter. Please send a link to the appropriate Article(s). Anne is correct. Your co-workers have way to much time on their hands. Thanks George A. Everding, AIA, CSI, CCS, CCCA Senior Member Username: geverding Post Number: 278 Registered: 11-2004 Posted on Friday, March 23, 2007 - 11:34 am:    Re: Time on hands... Well, at least they realize such things exist. Most people where I've worked were not even remotely aware of the UCC, or what warranties mean. Maybe David needs to direct these folks to the PRM and to suggest they study for the CDT. David, sounds like you have some future specwriters out there; if they become specwriters, they'll never have too much time on their hands. John Bunzick, CCS, CCCA Senior Member Username: bunzick Post Number: 686 Registered: 03-2002 Posted on Friday, March 23, 2007 - 12:19 pm:    The 6 year period you are looking for is most likely the statute of repose. It is 6 years in a number of states, but is not uniform across the country. Nothing to do with the UCC, under which warranties can be estabished simply by including information on them in sales literature, catalogs or invoices. Phil Kabza Senior Member Username: phil_kabza Post Number: 241 Registered: 12-2002 Posted on Saturday, March 24, 2007 - 02:18 pm:    Back to David's original question. It is possible to unwittingly limit an owner's rights through inclusion of certain warranty requirements in construction specifications, though per the above comments, the limitation doesn't stem from the project state's commercial statutes based on the UCC. The unsought limitation stems from inclusion of terms and conditions in the published warranty. The owner may be better served without reference to a specific warranty time period or specific failure characteristics, and especially if the language references a "manufacturer's standard warranty." The owner may be entitled to sue for damages unencumbered by the limitations of the warranty. When including warranty provisions in a section, it is common to include a "does not limit other Owner's rights" provision. I've presented the warranty portion of the PRM to five CDT workshops this year. I look forward to a future edition of the PRM that moves the UCC and purchasing warranty discussion into a separate chapter so that it can be removed from CDT material; it's CCS level stuff, and even then, many of us don't run into it often in practice. I don't know a compelling argument to include it along with basic construction warranty education. Robert W. Johnson Senior Member Username: bob_johnson Post Number: 142 Registered: 08-2004 Posted on Saturday, March 24, 2007 - 02:55 pm:    I respectively disagree with Phil's opinion about the coverage of warranties in the PRM and in relation to CDT. I think that warranties are an important consideration for all the participants in the design and construction process and are an important subject for all the participants to have a basic understanding of the warranty provisions of the UCC, of the AIA/EJCDC documents, government projects, and manufacturer's warranties and how they apply and don't apply in the various relationships of the various participants. This would include the Owner, A/E, contractor, subcontractors, and suppliers as well as lawyers, insurance advisors, etc. It is important for all the participants to understand their roles, responsibilities, and rights under warranties. It would be my experience that many of the participants don't have that basic understanding and have major misconceptions about warranties. I believe that warranties is a much bigger issue beyond just specifications. Anonymous   Posted on Tuesday, March 27, 2007 - 04:48 pm:    What purpose does UCC have in the context of the PRM and construction industry if, as one previous poster asserts: "The uniform commercial code will only affect transactions between the contractor and the manufacturer, not between the contractor and the owner, because construction is not considered a commercial transaction."? Why all the importance about the UCC in the PRM? Seems to me as though more attention should be spent on warranties that specifiers have to deal with, than on the UCC. What am I missing here? Robert W. Johnson Senior Member Username: bob_johnson Post Number: 143 Registered: 08-2004 Posted on Tuesday, March 27, 2007 - 06:19 pm:    I think what you missing is what the PRM and the CDT program are about and who they are for. From the PRM on its benefits (Page xxviii): ...the PRM is designed to be an accessible resource for all project participants, including owners, architects, engineers, design-builders, contractors, construction managers, product representatives, financial institutions, attorneys, regulatory authorities, and facility managers. In this respect, it serves and reflects the need for mutually dependent processes of design, construction, and facility use." CDT Description from CSI Website: "The Construction Documents Technology (CDT) Program provides a comprehensive overview for anyone who writes, interprets, enforces, or manages construction documents. Project architects, contractors, contract administrators, material suppliers, and manufacturers’ representatives are all realizing the advantages of being Construction Documents Technologists. By being able to understand and interpret written construction documents, CDTs perform their jobs more effectively. By understanding the roles and relationships of all partipants, CDTs improve communication among all members of the construction team. CDT Exam Overview CDT candidates must demonstrate their knowledge of CSI's recommended practices in the following subject areas: The construction process * Construction contract types * Modifications and substitution procedures Contractual relationships * Rights, duties, and responsibilities * Contract provisions * Relationship and organization of construction documents Use of construction documents * Organizational formats * Interpreting construction documents" The PRM and the CDT program is for all the participants, about the total process, and includes the relationships among all the participants including the relationship between contractor and manufacturer. Phil Kabza Senior Member Username: phil_kabza Post Number: 243 Registered: 12-2002 Posted on Tuesday, March 27, 2007 - 09:06 pm:    I'm pretty hesitant to ignore Mr. Johnson's sage advice and promise a complete reread of the PRM warranty material after my last class tomorrow. CSI's broad intentions for the CDT are notable and significant, and I support them. But presenting the UCC-based warranty material intermixed with construction contract warranty material and traditional legal term definitions, as it is presented in the PRM, is unnecessarily painful. Students are completely overwhelmed by it. I've tried a couple of reorganizations of my own instructional material, and I'm not satisfied yet. I'll try for V.3.0 for next year.