Construction defects are among the most common sources of litigation in the construction industry. While defects are often immediately apparent, it can take years in some cases for them to manifest. Unprepared contractors working out of the Volunteer State can be caught off guard by groundless construction defect claims. Fortunately, we’ve made it our mission to defend the contractors and subcontractors of this industry.
Below we will discuss two common construction defect defenses in Tennessee. While you should always be informed on the laws that pertain to your business, these defenses can only be employed by an attorney with years of experience in the field. If your company is facing potential litigation as the result of a defect, consult the team of Nashville contractor attorneys from Cotney Construction Law.
1. Employing Economic Loss Doctrine
Economic loss doctrine (ELD) limits recovery in a construction defect claim when the defect damages only itself. Essentially, an owner will be limited in the economic damages they can recover unless the defect has resulted in injury. The only damages that can be recovered are the cost of repairing or replacing the defective product — purely economic loss. An owner is then forced to abide by contract terms to resolve the claim.
For example, a poorly installed concrete driveway that cracks prematurely would lose value and be unsightly, but it would not result in injury nor would it result in damage to a connected structure. If you were found liable for such a defect, this doctrine stipulates that you are only responsible for the cost of the driveway, not additional damages resulting from mental anguish, loss of business, or loss of use.
Too often, owners bring forward a construction defect claim and pursue additional damages after signing a contract they wish they hadn’t. Like the statute of repose laws mentioned below, ELD is designed to hold individuals responsible for the contract language they agreed to. Furthermore, it can be argued that ELD applies not only to products but also to services and investments.
This doctrine is valid in the State of Tennessee and can be employed by an experienced Nashville construction dispute lawyer. As far as the Volunteer State is concerned, there are no exceptions to ELD. Even unreasonably dangerous products don’t entitle owners to additional compensation.
2. Arguing Statute of Repose
Due to a desire to facilitate dispute resolution and limit the number of cases in an already burdened court system, lawmakers have enacted statute of repose laws. These laws put a deadline on when an injured party can come forward with a construction defect claim.
Tennessee law states that the statute of repose is four years from the date of “substantial completion.” After four years, an owner is unable to bring a construction defect claim against you. For this reason, determining the precise date of substantial completion is vital in the defense of these claims. Substantial completion occurs on the date “the owner can use the same for the purpose for which it was intended; the date of substantial completion may be established by written agreement between the contractor and the owner.”
Related: Tennessee Statute of Repose
As with economic loss doctrine, the resolution of a construction defect claim may come down to the terms stated in your contract. Contact our construction law office to have your contracts reviewed by a Nashville contractor attorney.
For the Best Defense, Consult an Attorney
Of course, the argument could be made that you simply were not responsible for the construction defect. Numerous parties regularly come and go on a jobsite; you and your team of workers shouldn’t foot the bill for another party’s negligence. There are numerous routes to take in settling a construction defect claim. For determining which is the best for you, consult a Nashville construction dispute attorney from our Nashville law firm.
At Cotney Construction Law, our team is more than familiar with economic loss doctrine, statute of repose laws, and every defense that can make a difference in defect cases. Our affordable, on-demand lawyers can study the minute details of your dispute to determine the best course of action and build a case that protects your company and your rights. From the negotiating table to the courtroom, we’ve successfully argued on behalf of our clients to help them reach a positive outcome. If you’ve been accused of a construction defect claim, consult an experienced and aggressive Nashville construction dispute lawyer from Cotney Construction Law.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.