Building Law - Claims against Builders or Suppliers for Poor Quality Goods or Services

06/06/2016

When a Builder or other person provides goods or does work which is defective, what remedies does the Purchaser have?  That is, what can the Purchaser of goods or services do to recover his/her loss arising from those defects?

Examples of such situations are the following:

(a)      A Home Owner contracts with a Builder for the Builder to erect a home;

(b)      A Builder asks a manufacturer to make goods to order which the Builder then uses to build a home; and

(c)       A Builder purchases goods such as window frames for use in the building of a house which goods are defective or of poor quality.

In some or all of these situations, the builder/seller/supplier has certain obligations to provide goods or services of good quality.  If the goods or services are not of that quality and the purchaser suffers a loss, then the purchaser of the goods or services may be able to recover that loss.

The legal sources of the obligations to provide goods or services of good quality are the following:

(a)      Legislation in New South Wales which implies terms into Home Building Contracts.  This Legislation is the Home Building Act, 1989.  In that Legislation, the specific terms in relation to quality are fairly complex, but include terms such as that:

(a)      work will be performed in a proper and workmanlike manner; and
(b)      work will comply with the law.

(b)      The Australian Consumer Law (the “ACL”).  The ACL implies into Contracts for the supply of goods or services up to $40,000 in relation to those goods or services which are not acquired for personal use various terms in a variety of different areas. Those terms include the following:
(i)        that goods not have faults; and

(ii)       that goods do what one would expect them to do.

(c)       The New South Wales Sale of Goods Act.  The Act regulates the supply of goods and sets out implied terms that:

           (i)        Goods are of merchantable quality, and

           (ii)       Goods are fit for their purpose. 

(d)      The General Law.  The General Law regulates the supply of goods and services.  In the General Law there are implied terms in relation to the supply of goods that goods will be of merchantable quality or fit for their purpose.  In relation to the supply of services, there are implied terms that the Contractor will perform work under a Contract with all proper care and skill and secondly that the work will be reasonably fit for the intended purpose. 

As a result if any of these terms which are in contracts for the supply of goods or services are breached and there is a loss suffered by the Purchaser, the Purchaser may be able to recover some or all of their loss from the supplier. 

If you have any enquiries in relation to issues raised by this article, please feel free to contact Richard Watson of Watson and Watson, Solicitors.  We can advise you on the law, help you make claims for recovery of losses and prepare documents or materials for use in Court proceedings which may arise as a result of your loss.