In our legal practice, we see many cases where post-delivery discussions arise about the quality of the work performed. Clients often argue that a contractor did not do a good job and is therefore liable for the resulting damages. That conclusion is sometimes too short-sighted. Even if it is established that the work was not done properly, in some cases a contractor is not liable.
For example, the improper execution of the work may be the result of incorrect drawings, calculations or specifications or an unsuitable foundation on which the contractor had to (continue to) build. In such a case, the legislator considers it unreasonable for the contractor to be liable for damages incurred. The client must then bear the damage himself. This principle is different under the law if the contractor should have noticed the inaccuracies and warned the client. In such a case, the contractor may still be liable even though the "primary mistake" was not made by the contractor.
Duty to warn?
In a decision dated June 16, 2021, the Limburg District Court ruled that the client had to bear the damage resulting from the contractor's improper execution of the work himself. A contractor had built an extension to an existing house. Over time, cracks appeared in the walls of the extension due to subsidence of the extension. An expert determined that the soil at the location of the extension was not sufficiently load-bearing and that the extension was therefore subsiding. The land was owned by the client. The proceedings revolved around the question of whether the contractor knew or reasonably should have known about the defect in the ground and should have warned the client about it (see Section 7:754 of the Civil Code on the duty to warn). The court found in favor of the contractor because of the following circumstances:
- the contractor did not see anything abnormal when excavating the soil;
- no further circumstances were found either, on the basis of which the contractor should have conducted further investigation, after all:
- the house dated from 1977 so the contractor was entitled to assume that the soil around it had sufficiently sunk in;
- the foundation of the extension was of the same type as that of the existing building
- similar problems had not occurred in the immediate area before.
It follows that the duty to warn was interpreted by the court as a duty to investigate. Under that duty to investigate, the contractor must review and evaluate all information and matters coming from the client. In doing so, an arbitrator or judge applies the criterion that the contractor must warn of errors that a diligent and knowledgeable professional in the same trade or field of the same size and degree of specialization (the "mate") should notice upon that examination. Here, it is important that a contractor must be aware of the state of the art and generally known standards and rules in his field. In practice, incidentally, this duty of investigation does not go so far as to require a contractor to verify all calculations provided or review a design.
What should the warning look like?
If you as a contractor warn, that warning must be clear, explicit and reasoned. To prove this, it is wise to put the warning in writing. This can be done, for example, in a report of a construction meeting. In that case, pay close attention to the wording and make sure the report is adopted. It is also important for a good warning that the client is given sufficient information about the consequences of possibly ignoring the warning. A standard provision in an offer will often not suffice for this; it is better to at least repeat the warning in an order confirmation or in a separate e-mail. The word "warning" does not necessarily have to be used; this is the clearest.
Tightening warning duty by Building Quality Assurance Act
After the introduction of the Building Quality Assurance Act, the law will stipulate that a warning by the contractor must be in writing and unambiguous and that the contractor must point out to the client in a timely manner the possible consequences of the inaccuracies/errors for the proper performance of the contract. From the effective date of this law (now scheduled for July 1, 2022), you will be bound by this stricter warning obligation, even for contracts entered into before that date! Deviation is allowed, but only for professional principals in an agreement.
That the violation of a duty to warn in practice can have major consequences for a roofing company is evidenced by a ruling by the district judge of the North Holland District Court on July 7, 2021. This case involved puddle formation on a flat roof and a roof edge affected by that puddle formation. It was established that the puddling was caused by a (too) minimal slope. The roofing company defended itself by arguing that this slope was a design choice of the clients. The subdistrict court gave short shrift to that contention. If it was a clients' choice at all, the contractor's duty to warn should have required it to inform its consumer-clients of the adverse consequences of that choice. The contractor failed to show that it did so and was ordered to pay all damages.
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Conclusion
If, as a contractor, you see errors or inaccuracies in data or items provided by or on behalf of a principal, you must alert the principal. In such a case, be careful to warn appropriately and make sure that the principal is aware of the adverse consequences if the warning is ignored. If you fail to do so then you may potentially be liable even though the primary mistake was not made by you.
