Contractors usually warrant that their completed work is free from defects and complies with the contract documents. This warranty obligation is not indefinite, however. State law imposes statutory limitation periods on warranty claims. This gives rise to a question: Does the limitation period start to run when the project owner first discovers the defective work or does it start to run only when the contractor breaches the warranty obligation?

The Minnesota Supreme Court recently concluded that the statutory limitation period started to run only when the project owner learned that the contractor was unable or unwilling to honor the warranty. The owner’s prior knowledge of the defective work itself did not trigger the limitation period. Rather, the contractor’s breach of the warranty obligation was the trigger.

Other cases this week involved the blackballing of a potential subcontractor from project participation and a four-day government weather shutdown that affected the timely delivery of proposals. The public project owner’s rejection of all bids listing the subcontractor was upheld based on prior problems the owner experienced with the sub. And, the due date for proposals was not automatically extended under the Federal Acquisition Regulation.