Daily Development for Monday, June 25, 2007
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri

CONSTRUCTION; CLAIMS FOR DEFECTS; PRECLUSION BY LIMITED WARRANTY:  Condominium owners may assert a breach of contract claim against the building’s developer for alleged defective design and construction even if the purchase agreement contains a limited warranty, so long as the cause of action arises from a separate contract provision. 

Tiffany at Westbury Condo v. Marelli Dev., 826 N.Y.S.2d 619 (A.D. 2 Dept. 2006). 

Plaintiffs brought suit against the condominium’s developer for breach of contract due to alleged defects in the construction of the condominium.  Although the purchase agreement contained a limited warranty and therefore precluded plaintiff’s recovery based on common-law principles of implied warranty, the court found that plaintiffs might still assert a claim based on violations of specific provisions of the purchase agreement. 

The purchase agreement contained a provision whereby the condominium building, once erected, would be in substantial accordance with plans filed with the building department.  In addition, the purchase agreement allowed the developer to substitute building materials, provided that they were of comparable value and quality as those set forth in the offering plan, which was attached to the purchase agreement.  Because these provisions, in the view of the court, were  independent of the limited warranty, the court held that the plaintiffs could assert a breach of contract claim against the developer. 

Comment: Of course, in many states, contractor interests have been able to influence the legislature to adopt rather detailed statutes relating to the preclusion of implied warranties by express warranties, and undoubtedly some of these statute bar a variety of related claims, such as breach of contract. 

Nevertheless, in many jurisdictions, the theories espoused here will provide a useful “end run” for unhappy customers. 

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