Latent defects are hidden defects that cannot be discovered during routine inspections. Liability law can be affected by these defects, and in some cases, the seller may be liable. If there is no clause in the contract, the buyer may have to take legal action. Latent construction defects are particularly costly, and insurance companies offer latent defect insurance to protect policyholders.
A latent defect is a hidden defect that cannot be discovered during a routine inspection process. The opposite of a latent defect is an obvious defect, a defect that is visible upon successful inspection. Hidden defects can become a point of contention in liability law, depending on a number of different circumstances surrounding the defective item. Since people can’t find these problems until they buy a product, they can be a problem for the buyer.
As a general rule, when people buy new products, the understanding is that they buy with an understanding of any existing defects or problems. Any breakages or other problems are subsequently the responsibility of the buyer. This is based on the assumption that if the product had obvious defects, the buyer had the opportunity to refuse the purchase. All this changes with latent flaws. In this case, the buyer had no way of knowing the defect because it would have required destructive, unusual, or labor-intensive testing techniques to find out.
In some cases, a seller may be liable for hidden defects. The protection against hidden defects is often written in sales contracts, specifying the situations in which the seller will be obliged to replace or repair the damaged item. For example, if the transmission in a newly purchased car fails after 100 miles, the dealership would likely be liable for this latent defect.
If there is no clause in the contract that specifically addresses latent defects, the buyer may have to take legal action to recover damages from the seller. In this situation, the sentence can go in various ways. If the buyer can prove that the seller knew about the defect and did not disclose it, this is a misrepresentation and the buyer will likely win the case. Likewise, if a seller tries to hide a patent defect, that is also a misrepresentation. However, if the seller can prove genuine innocence or can prove that the buyer was aware of the hidden defect, the lawsuit can be decided in favor of the seller.
Latent construction defects are an example of a particularly costly type of defect that can plague some companies. Several insurance companies actually offer latent defect insurance, providing protection to policyholders such as businesses and building owners. In this case, the insurance will pay out if a latent defect causes problems, compensating buyers or sellers for losses caused by poor construction. Insurance will usually encourage the customer to file a lawsuit before filing an insurance claim in hopes of getting the builders to pay for the damages.
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