Defects Liability Period

The defects liability period (DLP) is the final phase of a construction contract, during which the contractor has a contractual right and obligation to make good defects in the completed works. It protects the employer from having to engage a separate contractor to fix defects at potentially greater cost, while giving the original contractor the opportunity to remedy its own work.

What is the Defects Liability Period?

The defects liability period begins at practical completion and runs for the duration stated in the contract, typically 12 months for building works, though longer periods of 24 or even 36 months are used for complex mechanical and electrical installations or specialist structures.

During the DLP, the contract administrator or employer's representative notifies the contractor of defects as they appear. The contractor is obliged to return to site and remedy each notified defect within a reasonable time, or the time specified in the contract. If the contractor fails to remedy notified defects, the employer has the right to engage another contractor to do so and recover the cost from the original contractor.

At the end of the DLP, the contract administrator carries out a final inspection. If all notified defects have been remedied satisfactorily, a Certificate of Making Good Defects (under JCT) or equivalent document is issued. This triggers the release of the remaining half of the retention and leads to the preparation and agreement of the final account.

The DLP is not a warranty period and does not limit the contractor's liability for latent defects discovered after its expiry. Under English law, the limitation period for claims in contract is six years from the date of breach (or 12 years if the contract is executed as a deed). Latent defects that only manifest years after practical completion may still give rise to claims within the limitation period, separate from and beyond the DLP.

Under NEC contracts, the equivalent provision is the "Defects Correction Period." Under FIDIC contracts, it is the "Defects Notification Period." The terminology differs but the mechanism is broadly equivalent: the contractor receives notification of defects and must remedy them within the stated period.

In many EU member states, equivalent provisions exist under national civil engineering legislation or standard form contracts. French law imposes a two-year guarantee for equipment and a ten-year structural liability (garantie decennale), creating obligations that extend well beyond any contractual DLP.

Why it matters for bidders

Contractors must resource the DLP properly. Site teams may have moved on to other projects by the time the DLP begins, and defect remediation requires mobilising labour and materials to site for potentially small-scale, dispersed tasks. Under-resourcing the DLP risks retention deductions, formal disputes, and reputational damage with a repeat-purchasing authority.

For subcontractors, the DLP in the main contract typically flows down, meaning subcontractors are also obliged to remedy defects in their own work during the equivalent period. The timing and release of subcontract retention is tied to the main contract DLP.

Example

A Danish county council takes practical completion of a new school in March 2025. The JCT Standard Building Contract specifies a 12-month defects liability period. Between March and October 2025, the architect notifies 17 defects covering roofing, drainage, and internal finishing items. The contractor remedies all items by January 2026. The architect issues the Certificate of Making Good Defects in February 2026. The remaining EUR 85,000 retention is released in the following valuation.

Frequently Asked Questions

Is the defects liability period the same as a building warranty?

No. The DLP is a contractual obligation on the original contractor to remedy defects at its own cost within a defined period. A building warranty (such as a collateral warranty, NHBC Buildmark, or professional indemnity insurance) provides a separate, longer-duration right to claim against defects, often running for 6 to 12 years.

What happens if defects arise after the DLP has expired?

The employer may still have a claim against the contractor under the general law of contract, up to the applicable limitation period. Whether a claim succeeds depends on the nature of the defect, when it first became apparent, and whether it constitutes a breach of the original contract.

Can the employer extend the defects liability period?

No. The DLP is fixed in the contract. However, if a defect is notified during the DLP but not remedied before its expiry, the contractor's obligation to remedy that specific defect continues beyond the nominal end date until it is remedied or a settlement is reached.