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Article 49 The subcontractor’s obligation to finish the subcontract works and correct defects

Defect Correction Period

49.1 The Defect Correction Period is the period after Taking-Over ¹⁴in which the Subcontractor is obliged to correct Defects in Design, materials or workmanship of the Subcontract Works attributable to the Subcontractor. In the absence of an agreement to the contrary, this period is one year in length.¹⁵If there is sectional Taking-Over, the Defect Correction Period of one year starts with the Date of each Taking-Over. If individual items of Plant which forms part of the Subcontract Works are repaired or completed during the Defect Correction Period, a new one-year Defect Correction Period for those items shall start on the Date of repair or completion of the Plant in question. In no event, unless otherwise agreed, will the Defect Correction Period continue for more than two years after the Date of the last Taking-Over. Unless otherwise agreed, all individual Defect Correction Periods will stop at that Date.

49.2 The Main Contractor shall give Notice to the Subcontractor of any Defects during the Defect Correction Period as soon as reasonably possible upon such Defects becoming apparent. Similarly, the Subcontractor shall as soon as reasonably possible give Notice to the Main Contractor upon becoming aware of Defects. During the Defect Correction Period the Subcontractor is obliged to maintain such goods, materials, Equipment and manpower on the Site only as is necessary to correct known Defects. The Subcontractor is not obliged to correct Design errors, material choices or workmanship Defects attributable to third parties (other than its own subcontractors or suppliers) or the Main Contractor or the Employer, nor is the Subcontractor obliged, without a Variation, to vary or improve Subcontract Works that comply with the Subcontract.

49.3 The Main Contractor shall provide the Subcontractor every opportunity and access to complete any outstanding work and correct any Defects specified in the Punch List or any Defects in the Subcontract Works not so specified but which have been notified by the Main Contractor to the Subcontractor or its Representative during the Defect Correction Period.

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Normal wear and tear not included

49.4 Normal wear or tear or damage to the Subcontract Works caused by the Main Contractor’s or the Employer’s occupation and/or use of the Subcontract Works or any part thereof and/or non-compliance by the Main Contractor, Employer or third parties with the operation or maintenance manuals supplied (if any) shall not be the responsibility of the Subcontractor, nor shall the Subcontractor be obliged to repair such wear, tear or damage.

Consultation

49.5 The Parties shall consult with each other and shall agree the time or times when the Punch List items and/or Defects are to be completed and/or remedied, and, subject to the provisions of Article 49.1, the Defect Correction Period to apply to corrected work. The Parties shall consult on the best method for remedying any Defect, which can include, at the Subcontractor’s option, repairing the Defect, replacing defective items, or reperforming defective work.

Software issues

49.6 In the case of a software Defect, the remedy may consist of a software patch, update, upgrade or new software version. If the Cost of remedying the Defect is disproportionate to the nature of the Defect or its magnitude, the Subcontractor shall have the option of offering an abatement of the Subcontract Price.

49.7 The Subcontractor shall not be liable for Defects in software (i) in case of insignificant deviation of the software from the agreed characteristics; (ii) if the Defect cannot be reproduced by the Main Contractor in the presence of the Subcontractor; or (iii) if the Defect is in freeware, shareware or open source software.

Joint inspection

49.8 The Main Contractor and the Subcontractor shall carry out a joint inspection of the Subcontract Works at least 14 Days prior to the expiry of the relevant Defect Correction Period to confirm the condition of the Subcontract Works, and the Main Contractor shall immediately give Notice to the Subcontractor of any outstanding Defects required to be made good or work required to be executed by the Subcontractor in accordance with the Subcontract. If there is no such Notice given, the Subcontract Works shall be considered to be in accordance with the Subcontract.

Searches for Defects

49.9 If instructed to do so by the Main Contractor before or during the Defect Correction Period for the Section of the Subcontract Works being considered, the Subcontractor shall search for Defects as instructed by the Main Contractor. If a Defect is found as a result of the search and the Defect is the liability of the Subcontractor under the Subcontract, the Cost of the work to remedy such Defect shall be borne by the Subcontractor, including the Cost[Page61:]of any searches, tests or trials necessary to determine the existence or extent of the Defect. In all other cases, the Cost plus profit of such work, including any searches, tests or trials, shall be ascertained and paid to the Subcontractor as if it were additional work and instructed as a Variation.

Abatement of the Subcontract Price

49.10 In lieu of remedial work, the Subcontractor may in all cases offer an abatement of the Subcontract Price.

Failure to remedy Defects

49.11 If the Subcontractor unreasonably neglects or refuses to remedy Defects for which it is responsible, the Main Contractor may, after agreement from the Subcontractor or a decision to this effect from the entity rendering a decision in accordance with Chapter 13 and upon giving the Subcontractor 14 Days’ Notice, engage another subcontractor to remedy such Defects. Subject to the limitations and exclusions of liability in this Subcontract, the Subcontractor is responsible for the reasonable Cost of such remedial work.

Sole remedies

49.12 Without prejudice to Article 57 or Chapter 13, and unless otherwise agreed, the contractual remedies set out in this Chapter are the sole and exclusive remedies of the Main Contractor in respect of Defects.

Final Acceptance

49.13 Final Acceptance shall occur when:

1. the Subcontract Works and Punch List items, (if any) have been completed in accordance with the Subcontract;
2. the Defect Correction Period has expired and the Subcontractor’s obligation under Article 49 has been carried out;
3. the final as-built drawings and manuals (if any) have been delivered; and
4. the conditions for Final Acceptance, as set out in an Appendix (if any) are met.

49.14 The Subcontractor shall be entitled to a Certificate of Final Acceptance when the conditions under Article 49.13 are met.

49.15 In the event that the Main Contractor determines that the conditions for Final Acceptance have not been achieved, it will give Notice to the Subcontractor giving the detailed reason(s) why the Main Contractor believes the conditions for Final Acceptance have not been met.

49.16 Any remaining performance or warranty bonds in favour of the Main Contractor are void after Final Acceptance and are to be returned.

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Defect Correction after Final Acceptance

49.17 If and for the time period when Final Acceptance has occurred but the Defect Correction Period for the Works of which the Subcontract Works form part has not yet expired pursuant to the Main Contract, the Subcontractor shall upon written request by the Main Contractor remedy Defects in the Subcontract Works as is necessary for the Main Contractor to comply with its obligations in respect of the correction of Defects under the Main Contract, and the Cost plus profit of such remedial work, including any searches, tests or trials, shall be ascertained and paid to the Subcontractor as if it were additional work and instructed as a Variation.

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