The Court of Appeal of Helsinki has in its recent decision
interpreted section 13 of the YSE 1983 general conditions for
building contracts (concerning liability during the guarantee
period.) Section 13 of YSE 1983 is consistent with section 29 of
the current YSE 1998 regarding the legal issue in question. The
decision of the Court of Appeal is therefore applicable to the
current YSE 1998 conditions. The decision of the Court of Appeal
has legal force.
According to section 13 of YSE 1983 (and respectively
section 29 of YSE 1998), the contractor is obliged at his own
expense to repair any defects that emerge in his building work
during the guarantee period, unless the contractor can demonstrate
that the defects have occurred due to reasons beyond his
control.
If the contractor delays in repairing the defects, the client is
entitled to carry out the work at the expense of the contractor.
However, the relevant section of YSE states that this can only take
place after the client has given prior notice to the contractor in
writing. In practice this has in many cases been interpreted to
mean that the client is to give the contractor an order to repair
(in Finnish "korjauskehotus"), before carrying out the
repair work.
In the case in question, the client did not give the contractor
any specific (written or oral) order to carry out the repair work.
Based on this, the contractor argued that the client's claim
for damages based on defects during the guarantee period should be
dismissed.
The Court of Appeal determined that the contractor was to pay
damages to the client, based on defects during the guarantee
period. The court however adjusted the amount of damages, partly
based on the client's failure to give the contractor the order
to repair.
A relevant fact of the case is that the contractor performed the
repair work himself, based on a separate contract. The
contractor was therefore aware of the fact that repairs were being
made and also in a position to monitor the defects.
The decision of the Court of Appeal of Helsinki reflects a trend
in construction cases not to base decisions solely on formalities
that would lead to the losses of rights of a party who otherwise
would be entitled to damages. This trend is reflected in the
well-known Supreme Court case 2008:19, as well as in an earlier
Supreme Court case 1998:75.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
