Wednesday, October 7, 2015

Implied Warranty Update - Does Not Extend to Architects for Design Flaws

I just posted a few days ago about the Illinois implied warranty of habitability and the recent case of Fatah v. Bim, which found that contractors can be liable for a claim of warranty breach by a subsequent homeowner, not the initial buyer, even when the initial buyer signed a waiver with the builder.  
The implied warranty is again in the news today, for a second Illinois appellate case, this time about whether the warranty extends to architects for alleged design flaws.  The court held that the warranty addresses the construction itself, not design, and therefore found the warranty did not extend to the architect.  
The case is also significant for the court's consideration of warranty disclaimer language in the contracts signed by the buyers, as to potential liability of the developer and other defendants.  The court found the disclaimer, which was in all caps, was sufficiently conspicuous as a matter of law, and that the developer was not required to verbally bring the the disclaimer to the buyers' attention before they signed.  
Finally the court also addressed when implied warranty claims may be raised against subcontractors (only where the general contractor is insolvent), and found the plaintiffs' pleadings did not sufficiently show the contractor's insolvency and therefore potential subcontractor liability.