Vietnam: Must equipment supply contractors be responsible to investors for the warranty for the works they perform on their part?
- Must equipment supply contractors be responsible to investors for the warranty for the works they perform on their part?
- How must the investor agree in the construction contract with the contractor regarding the construction warranty?
- What are the liabilities of entities involved in construction warranties in Vietnam?
Must equipment supply contractors be responsible to investors for the warranty for the works they perform on their part?
Pursuant to Clause 1, Article 28 of Decree No. 06/2021/ND-CP stipulating as follows:
Construction warranty requirements in Vietnam
1. Construction contractors and equipment supply contractors shall be responsible to investors for the warranty for the works they perform on their part.
Thus, equipment supply contractors shall be responsible to investors for the warranty for the works they perform on their part.
Vietnam: Must equipment supply contractors be responsible to investors for the warranty for the works they perform on their part? (Image from the Internet)
How must the investor agree in the construction contract with the contractor regarding the construction warranty?
Pursuant to Clause 2, Article 28 of Decree No. 06/2021/ND-CP stipulating as follows:
Construction warranty requirements in Vietnam
...
2. In the construction contract, the investor must agree with the contractors involved in the construction work on the rights and responsibilities of the parties regarding the construction warranty; period of warranty for the construction work, equipment, technological equipment; warranty method and form; warranty coverage; custody, use, and refund of warranty expenses, collateral, pledged property or other forms of guarantee having equivalent value. The above contractors shall only be entitled to refund of the warranty expenses, collateral, collateral, pledged property or other forms of guarantee after the expiration of the warranty period, and obtaining the investor’s confirmation of discharge of warranty liabilities. For construction works using public investment capital or state capital other than public investment capital, monetary warranty or letter of guarantee for warranty issued by banks may be accepted. The warranty period and coverage shall be specified in Clauses 5, 6 and 7 of this Article.
The investor must agree with the contractors involved in the construction work on the rights and responsibilities of the parties regarding the construction warranty:
- Period of warranty for the construction work,
- Equipment, technological equipment;
- Warranty method and form;
- Warranty coverage;
- Custody, use, and refund of warranty expenses, collateral, pledged property or other forms of guarantee having equivalent value.
What are the liabilities of entities involved in construction warranties in Vietnam?
Pursuant to Article 29 of Decree No. 06/2021/ND-CP stipulating the liabilities of entities involved in construction warranties in Vietnam as follows:
- During the validity period of warranty for a construction work, when detecting any damage or defect, the investor must, and the owner or the manager or the user of that construction work must report to the investor to, request the construction contractor or the equipment supply contractor to implement warranty procedures.
- The construction contractor and equipment supply contractor shall have the burden of discharging warranty obligations to the work they perform on their part after receiving the warranty claim from the investor, the owner or the manager or the user of the construction work with respect to any damage occurring during the warranty period, and bearing all costs associated with the warranty claim payments.
- The construction contractor or equipment supply contractor shall have the right to refuse to take warranty responsibilities in cases where damage or defect is caused through no fault of their own or due to force majeure events prescribed under the construction contract. In case damage or defect is caused through the contractor's fault but the contractor does not carry out their warranty obligations, the investor shall have the right to use the warranty sum to hire another organization or individual to perform their warranty obligations. The investor, the owner or the manager or the user of a construction work shall be responsible for complying with regulations on operation and maintenance of the construction work in the course of operation and use of such work.
- The investor shall be responsible for inspecting and testing the implementation of the warranty obligations by the construction contractor and the equipment supply contractor.
- Certifying the completed warranty for construction works:
+ Upon expiry of the warranty period, the construction contractor and the equipment supply contractor shall make a report on completion of implementation of warranty obligations and send it to the investor. The investor shall be responsible for certifying the completion of implementation of the warranty obligations for the construction work to the contractor in writing and refunding the warranty sum (or releasing the letter of guarantee having equivalent value from the bank) to the contractors in case where results of inspection and testing of warranty performance of the construction contractor or the equipment supply contractor in Clause 4 of this Article are satisfactory;
+ The owner or the manager or the user of that construction work must take part in granting the certificate of completion of warranty for the construction work to the construction contractor or the equipment supply contractor at the investor’s request.
- The construction survey contractor, the construction design contractor, the construction contractor, the construction equipment supply contractor and other relevant contractors shall be responsible for the quality of the work performed on their part even after expiry of the warranty period.
- For housing construction works, contents, requirements, responsibilities, forms, values and warranty periods must comply with the housing law.
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