Article 49 The Contractor’s obligation to finish the Works and correct Defects

Defect Correction Period

49.1 The Defect Correction Period is the period after the Taking-Over Date during which the Employer shall notify the Contractor of a Defect in Design, materials or workmanship of the Works attributable to the Contractor and the Contractor is obliged to correct such Defects at no additional cost for the Employer. In the absence of an agreement to the contrary in the Special Conditions, this period is one (1) year in length. If there is sectional Taking-Over, the Defect Correction Period of o ne (1) year for such section starts with the Date of the sectional Taking- Over. If individual items of the Plant are repaired or completed during the Defect Correction Period, a new Defect Correction Period of the same duration as the initial 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 for any part of the Works continue for more than two (2) years after the Date of the last Taking-Over Date.

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

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

Normal wear and tear not included

49.4 Normal wear or tear or damage to the Works caused by the Employer’s occupation and/or use of the Works or any part thereof and/or non-compliance by the Employer or third parties with the operation or maintenance manuals supplied (if any) shall not be the responsibility of the Contractor, nor shall the Contractor 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. The Parties shall consult on the best method for remedying any Defect, which can include, at the Contractor’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 Contractor shall have the option of offering a reduction of the Contract Price. The Employer however is not obliged to accept such an offer, but may instead terminate the Contract in accordance with Article 55.8 if the Defect is of material importance to the Employer.

49.7 The Contractor 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 Employer in the presence of the Contractor; or (iii) if the Defect is in OSS.

Joint inspection

49.8 The Employer and the Contractor shall carry out a joint inspection of the Works at least fourteen (14) Days prior to the expiry of the relevant Defect Correction Period, or such other period as the Parties may have agreed in the Special Conditions, to confirm the condition of the Works, and the

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Employer shall immediately notify the Contractor of any outstanding Defects required to be made good or work required to be executed by the Contractor in accordance with the Contract.

Searches for Defects

49.9 If instructed to do so by the Employer before or during the Defect Correction Period for the Section of the Works being considered, the Contractor shall search for Defects as instructed by the Employer. If a Defect is found as a result of the search and the Defect is the liability of the Contractor under the Contract, the Cost of the work to remedy such Defect shall be borne by the Contractor, including the Cost 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 Contractor as if it were additional work and instructed as a Variation.

Reduction of the Contract Price

49.10 In lieu of remedial work, the Contractor may in all cases offer a reduction of the Contract Price. The Employer however is not obliged to accept such an offer.

Failure to remedy Defects

49.11 If the Contractor unreasonably fails, neglects or refuses to remedy Defects for which it is responsible, the Employer may upon giving the Contractor fourteen (14) Days’ Notice, engage another contractor to remedy such Defects. Subject to the limitations and exclusions of liability in this Contract, the Contractor is responsible for the reasonable Cost of such remedial work.

Final Acceptance

49.12 Final Acceptance shall occur when:

  1. The Works and Punch List items, (if any) have been completed in accordance with the Contract;
  2. The Defect Correction Period has expired and the Contractor’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 the Special Conditions are met.

49.13 The Contractor shall be entitled to a Certificate of Final Acceptance when the conditions under Article 49.12 are met.

49.14 In the event that the Employer determines that the conditions for Final Acceptance have not been achieved, it shall notify the Contractor giving the detailed reason(s) why the Employer believes the conditions for Final Acceptance have not been met.