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I am a building contractor. One of my clients, a nationalized bank has included a clause of defect liability in the agreement and also refers to guarantee. Please inform what means by defect liability, guarantee and warranty period?

- by Sanjeev Reddy, Hebbal

Defect liability period means, the period in which quality of construction is tested/verified. This period would be generally 6 months including rainy season. During defect liability period the builder will be liable to rectify any defects noticed in the construction, like seepage of water structural, cracks in the walls. The purchaser will retain a portion of the consideration amount which will be released only after the lapse of defect liability period.

Guarantee is a contract which is personal in nature between individuals, companies, firms. Guarantor would always be a third person, who is liable to compensate in case of any loss suffered. The word surety is also used instead of guarantee. This practice is prevalent mostly in financial transactions and performance contracts.

The word warranty is used in case of sale of goods. The Warranty is extended by the company / manufacturer to the purchasers / end users. The company undertakes to set right any defects noticed in its products during specified period called warranty period.


These are all the legal questions answered by Advocate S.Selvakumar in various magazines, in various occasion including realestate reporter monthly.