Warranty and Limitation of LiabilityAll of our goods are warranted against defects in manufacture for one year. We disclaim all other warranties, express or implied, including without limitation implied warranties of merchantability and fitness for a particular purpose. We will not be responsible for labor charges associated with the removal or replacement of defective products. The maximum liability of seller for direct damages, if any, is limited to an amount not to exceed the invoice price of the goods sold.
Although the products mentioned above are fictitious, the warranty is not. As I rifle through the many manufacturer warranties related to the wall and ceiling industry, I’m finding that we better watch it.
What happens if 500 cornerbeads are installed and after the job is finished and painted, the metal beads begin to rust? What happens if the face paper begins to delaminate after hanging and taping 10,000 square feet of drywall? Worse yet, what happens when one finishes hanging, taping and painting a track of 500 homes, and finds that the taping mud is cracking and peeling? In our business, there are so many variations of possible problems my head spins just trying to think of them all.
Many material manufacturers have limited warranties. A limited warranty could be worded in ways that are not clear to the purchaser. It may appear that a manufacturer will pay for labor when in truth the manufacturer will not pay in excess of the material invoice as noted above.
We contractors warrant both material and labor without limitation. Is it good business for us to give our customers an unlimited warranty while our manufacturers give us limited warranties?
Manufacturer relationshipsFor years, I have been buying a company’s products for two reasons. First, most of our workers preferred this company’s board. Second, if we did have a problem, the company took care of it, including material and labor.
Although I was paying a little more for this board, I believed that I was making a good investment in terms of keeping my employees and customers happy, while receiving great service when a warranty issue arose.
In fact, I liked this company so well that several years ago, I had a significant amount of the company’s material on my house. A few years after installation, some of the material began to deteriorate and I called them. After the company officials inspected the areas, they told me they could clean it and treat it. Or, if the problem continued, they would replace it. Since my wife and I loved the look of the product, we decided to let them clean and treat it. As time passed, this company’s particular line was taken to court due to the many systems failing throughout the nation.
In the meantime, my product continues to deteriorate. I was told to file my claim and I did so in Oct. 2002, and to date the problems have not been resolved.
When I purchased this very expensive product, I relied not only on the company warranty but most importantly, the reputation the company had built with my company and me personally. I still don’t know the status on my claim.
In my mind, I’m wondering what would have happened if this was a gypsum problem on one of my jobs and I had to wait this long for the manufacturer to step up.
Our customers are not going to wait for some manufacturer to make a decision. Our customers expect us to fix our defects immediately and at our expense. The lesson here is that we never really know how good a business relationship is until it’s tested.
Negotiate a warrantySince contractors are contractually obligated to warrant material and labor without limitation, the only solution I see is to either limit the warranty or negotiate a warranty with the manufacturers. If manufacturers supply defective materials, why shouldn’t they be responsible to the same extent we are for the removal and replacement of their product?
One of the reasons contractors are paying more for liability insurance is due to the many failures of manufactured products. We are all well aware of other products for which there have been class-action settlements. Yet, there have been other product failures for which contractors and/or insurance companies have had to flip the repair bill that we’ve not heard about.
Negotiating a warranty with manufacturers should not be considered unreasonable. If they are going to produce products and if there is a failure with their respective materials, they should have to pay for all costs associated with the failure including possible liquidated damages, if any.
The wall and ceiling industry is a huge market covering many different scopes of work. It is a multi-billion-dollar industry and is made up of thousands of small businesses. There are very few wall and ceiling manufactures as compared to contractors. I’ve found that many of the manufacturers have very similar limited warranties. Once again, it appears that as one moves up the food chain from manufacturer to GC and up to the owner the liability lessens for them and increases for us.
Should we pay a little more for our material if we knew that the manufacturer’s warranty included a warranty that covered material and labor, as well as legal defense? I know I would. Again, it may appear that manufacturers will take care of any defect problems—but what about the big one? Has the 9.0 earthquake happened or have they just been little tremors where a few hundred bucks and few sheets of board took care of the problem?
Read the contractHow many paint, drywall, screw or metal stud manufacturers do you buy from each year? How much money is spent for these products and how much is going to each manufacturer? Are you getting your monies’ worth in the form of a properly negotiated warranty? Spend company money where it gets the most for it. In my area, I use the 70/30 rule. Labor is 70 percent and material is 30 percent of a job. If a company does $2 million in sales per year, $600,000 has been spent in material. That kind of money deserves something better than a limited warranty.
If unsure to what degree the company’s contractually obligated to a warranty, read your company contract and specifications. If residential work is what the company mainly does, read the state laws regarding warranties or get advice from an attorney. If a contract’s handy, read the warranty section and decide if your company’s liable for both material and labor and to what extent. Now, read the warranty for the drywall that’s been bought all these years and decide if the manufacturer is providing the protection needed. Stay away from this warranty:
Warranty and limitation of liability
All of our goods are warranted against defects in manufacture for one year. We disclaim all other warranties, express or implied, including without limitation implied warranties of merchantability and fitness for a particular purpose. We will not be responsible for labor charges associated with the removal or replacement of defective products. The maximum liability of seller for direct damages, if any, is limited to an amount not to exceed the invoice price of the goods sold to you.
Remember: Teamwork begins with a fair contract!