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Don't Assume Liability for Your Vendor's Products

We all have followed the LP Siding story. In that case, Louisiana-Pacific settled a class-action lawsuit that provided for some remedy for all homeowners.

LP Siding is just one instance of engineered building materials that have proven to be defective. Roofing products, synthetic stucco, windows and a number of other products have failed. In some instances, the manufacturers' disclaimers of warranties may protect the manufacturers or at least create an obstacle to the manufacturer's liability. Most builders, however, do not have such a warranty disclaimer and may often be left holding the bag for defects in the manufacturer's products. These are cases of Goliath sending David to go fight another David.

You may be asking, what is a builder to do?

DON'T: Don't voluntarily become an insurer of products manufactured by or services performed by others. This is essentially what is currently happening to homebuilders.

DO: Do include appropriate liability disclaimers in your contracts and sales documents.

DO: Do contain specific warranty provisions disclaiming liability for goods manufactured by and services performed by others.

You should expect to stand behind the products you make and the services you perform. You should not be held accountable for the products and performance of others that choose not to stand behind their work. Protect yourself.

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