– April 11, 2023

Defects in works briefly explained

Defects in buildings are not uncommon. Therefore, it is important to react in time in such a case and to assert any claims. But when is the right time and what claims can actually arise?

When is a work defective?
Any deviation from the contract for work is considered a defect. The relevant criteria for the severity of the defect are the appearance, the extent or the concrete characteristics of all features of the corresponding work. In principle, therefore, a defect exists if there is a deviation between the actual and the contractually agreed condition of a work or if a presupposed characteristic is not present. 

It is important to note that minor defects in the work, such as slight scratches, cannot be qualified as a defect in the work, since such defects neither restrict nor eliminate the usability of a work. It is therefore fundamental that the work lacks an agreed characteristic or one that is presupposed even without an agreement (such as, for example, that a door can be opened and closed). In addition, a work may be defective if it deviates from statutory provisions and may therefore not be used. 

If the requirements for a defect in the work are fulfilled, the buyer must prove that it is in fact such a defect. According to Art. 367 para. 1 CO, he must inspect the work after handing it over for its condition and immediately notify the contractor of any defects. 

It is best if this is done directly with the contractor and possibly even an acceptance or defects protocol is drawn up. If there are hidden defects in the work that only appear later, these must be reported immediately after their discovery in accordance with Art. 370, para. 3 of the Civil Code (BGE 118 II 142). If this is not done, the work is deemed to be approved and all claims arising from defects in the work lapse. 

What to do if a work defect occurs?
The buyer has various options as to what he can do in the event of a defect: 
According to Art. 368 para. 1 CC, the buyer may refuse acceptance in a worst-case scenario if he cannot reasonably be expected to accept the work. This is basically the case if the work suffers from such significant defects or otherwise shows major deviations from the contract that it is unusable for the orderer. Payments that have already been made can be demanded back and the contract for work can be terminated retroactively. 

The second possibility, according to Art. 368 para. 2 CC, is to demand a price reduction in the case of minor defects or deviations from the contract. It is also permissible to demand rectification of the work without a corresponding payment of wages for it. The contractor must be given a period of time to rectify the defects. If the defects are not remedied within this period, a period of grace may be set and then the rights arising from default under Art. 107 et seq. of the Swiss Code of Obligations may be exercised. OR, such as withdrawal from the contract. The Federal Supreme Court has also affirmed a claim after the refused rectification leads to the fact that this may be carried out by a third party at the expense of the contractor (BGE 107 II 50).
An exception to this is Art. 368 para. 3 CC. Accordingly, in the case of works that were erected on his land and can only be removed with considerable disadvantages, the purchaser is only entitled to the rectification claims of Art. 368 para. 2 CC. 

In all three cases, the client may also claim damages for consequential harm caused by a defect if the contractor is at fault. For this, too, the defects must be notified in good time in accordance with Art. 371 CO. 

Note: If there is a contract for work and services in which something else has been agreed, this contract takes precedence over the law and these rules do not apply. 

Assured or agreed characteristics are missing
The contractual work and its target state result from the respective properties that have been agreed or warranted. They arise from the fact that the contractor and the client make their concurring declarations of intent, which may be express or tacit. If an entrepreneur declares that a certain property is to be included in the work, this is called an assurance. This can be given by the contractor himself or demanded by the client. If an assurance has been given, it is agreed and thus also binding. 
In addition, the agreement between the contractor and the client can also be formulated negatively, i.e. in such a way that certain properties of the work are excluded. Minimum requirements can also be defined. 

Presupposed characteristics are missing
The buyer may always expect certain features to be present in the work, without any special agreement being necessary. For example, in the case of a residential building, it may always be expected that the windows are tight and the walls are straight. Normally, presupposed qualities are understood to mean the normal condition and usability of a work. Therefore, the question always arises as to what the agreed and actual purpose of use of the work is. 

If a work lacks the usability or the normal quality (or even both), there is basically also a defect in the work. 

When is there no defect in the work?
In particular, there is no defect in the following cases: 

  • Ancillary obligations are not fulfilled

A defect in the work must always relate to the work itself. If, for example, the floor was slightly damaged or dirty during the construction work, this is an incidental damage and not a defect in the work. In order to determine whether a primary or a secondary obligation has been breached, the contractually stipulated scope of the work must be taken as the measure. 

  • Unfinished work

If a work is not completed by the contractor at all, the legal situation is initially unclear and disputed. The prevailing doctrine is that such a work cannot be delivered and cannot be accepted by the client. Therefore, no defects can be asserted. However, there is a claim for performance against the orderer.

  • The completely different work

Even if the work delivered to the buyer is not the work that would have been owed to him, but a completely different work, this does not constitute a defect in the work. This is because it is no longer even a work in the sense of the agreed contract for work. This leads to a wrong delivery and not just to a poor performance, as would be the case with a defect in work.

If you have any questions regarding service contracts, our lawyers will be happy to advise you.