Future liability exposure for the cost of removing and replacing defective supplied construction products
This report deals with Germany‘s impending construction contract law, expected for around year‘s end, and with altered sales-law provisions regarding warranties. Sales-law warranty obligations are being expanded to cover regress liability extending all the way back to the manufacturer, now expected to include the bearing of costs for the removal and replacement of defective supplied construction products. This instrument will be of major significance for the entire construction product service and supply chain and can be expected to necessitate appropriate insurance coverage.
Defective supplies of raw or semi-finished material for the manufacture of an overall product have disadvantages for the purchaser that go beyond the lower value of the defective wares. Such material regularly also detracts from the value of the finished overall product, even to the point of rendering it worthless. According to present legal practice, however, the vendor is only obligated either to remedy the defect affecting the supplied products or to replace it, regardless of negligence or fault. All further-ranging claims in connection with entrepreneurial transactions can...