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Home Builder Provides Implied Warranty to Subsequent Buyers of Home
Description Rhode Island high court held that privity of contract is not needed between the subsequent buyers of a home and the builder, as a builder knows that homes are often resold. An implied warranty of good workmanship for latent defects applies for ten years after completion of a home.
Topic Contracts
Key Words Breach of Implied Warranty; Latent Defect; Privity of Contract
C A S E   S U M M A R Y
Facts Beaufort built a home in 1983. Two years later, the original buyer sold the home to the Nichols. In 1988 the garage floor caved in. In 1991 there were cracks in the walls of the kitchen and garage. An engineering firm reported to Nichols that the home was built on unstable soil. In 1994 Nichols sued Beaufort for breach of implied warranties and negligence in construction. Trial court dismissed the suit, holding that there was no privity of contract between the parties. Nichols appealed.
Decision Reversed in part. Privity of contract was unnecessary for a suit by the subsequent buyers of a home against the builder for breach of implied warranty of good workmanship for latent defects. It was foreseeable that there may be more than one set of owners of a house. Builders are under a legal duty to construct habitable houses in a workmanlike manner, so implied warranties pass on to later buyers of homes, so long as the defects are discovered within ten years of completion, which is the statute of repose for actions.
Citation Nichols v. R.R. Beaufort & Assoc., 727 A.2d 174 (Sup. Ct., R.I., 1999)

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