Construction Defect Settlement Agreement
(2) For C A to be liable for the transaction, A must demonstrate that the mentioned case (in the case of compensation awarded by C to A) or the infringement (in the case of an infringement between C and A) is the cause of the damage suffered by the execution of the transaction in the manner defined in the compensation or as necessary for the compensation of the damage. It must also show that the loss was within the limits of the damage covered by the compensation or that the damage was not too small. A settlement agreement expressed as “full and final payment of all claims” or “in full and final payment with respect to obligations relating to the work performed under the contract”, in particular if accompanied by a non-exhaustive list of claims, may be interpreted as an agreement under which incomplete or defective parts are covered, as and when they appeared. This would mean that all claims relating to patent defects, either those known at the time of the agreement or that could reasonably have been discovered, would be settled. Clear language should be used to retain or deny rights to pursue claims arising from hidden defects. See YJL London Ltd v Roswin Estates LLP  EWHC 3174 (TCC). However, in order to maximize the likelihood that a court will impose a provision to release latent defects, it is essential to ensure that the release of latent defects is completely clear. The expression of such an agreement in the language of a general downgrading provides the Tribunal with clear evidence that the release of latent defects is the direct result of the negotiations that took place prior to the execution of the release document. Finally, it is also important to introduce a “non-confidence clause” in order to demonstrate to the Court that the parties rely exclusively on the explicit conditions of the general authorisation. Generally speaking, these clauses stipulate that the parties have not relied on assurances other than those provided for in the treaty. Cases of construction defect usually involve a large number of parties, lawyers, insurance companies and experts.
Each player has their own goals. The owner of the property wants maximum means to correct defects and cover losses. The contracting authority contests both the extent of the claimant`s compensation and the associated costs and attempts to pass on the claimant`s claims to subcontractors. Subcontractors focus on minimizing alleged damage and transferring liability. Design professionals distinguish between design flaws and design issues. Lawyers challenge briefs, decipher contracts, pursue claims and assert defenses. Insurers put forward the language of insurance to define the losses covered and involve other airlines to share the risk. Experts provide technical insight into all aspects of the discussion.
The parties to a settlement agreement should verify whether the transaction is contemplated: (5) The examination of the adequacy of the amount paid in comparison is to determine whether, in all circumstances, the transaction fell within the scope of comparisons that could have been made by reasonable persons in the position of the accounting party. . . .