Owner Acceptance As A Waiver Of Claims

By: Juan Anderson, Income Member

There are instances where the owner’s project acceptance serves as a waiver of claims for obvious defects against the contractor. However, the defense of waiver is not easily achieved. The general contractor must establish that the owner knew about defects when accepting in order to assert project acceptance and waive a claim for defective construction. Acceptance may operate as a waiver to the defect claims if the contractor can show that the owner discussed the alleged defects, decided to proceed with work following the discussion and then paid the contractor without docking pay or notifying that payment didn’t release them from responsibility for those defects.

Waivers may also be an effective defense when the architect:

• Issues a certificate of substantial completion (as per the AIA Document A201) constituting acceptance of work; and
• Approves or certifies work as compliant with plans and specifications. (The contractor can argue the owner approved defects through its architect who should have known about defects)

A diligent contractor should always check written contracts for any waivers of claims for breach of the implied warranty of habitability to determine if waiver language is included. Waivers are enforceable when the warranty is waived by clear and specific language acknowledged by the owner.

Chicago, Illinois 312-377-1501 | Crown Point, Indiana 219-488-2590

Chicago, Illinois


Crown Point, Indiana