When things go wrong, people will generally look for someone else to blame.

Have you taken the first steps toward protecting yourself and your assets?  In this article we unwrap the legal issues surrounding the installation of products in our litigious society.

Consider this non-factual scenario:

Great Bathroom Refurbs Pty Ltd engages local plumber Jack Everyman to install some plumbing and bathroom fittings in a trendy restaurant.  Jack’s task is to install several pedestal cisterns Great Bathroom Refurbs have sourced from a foreign manufacturer.

While Jack has installed many toilets before, he has never seen this particular model.  Jack notices that the plumbing joinery was slightly irregular, but he puts together the best working installation possible in the circumstances.

Two months later, Jack hears that one of the toilets has broken under the weight of a visiting sumo wrestler, who was so badly injured that he will never wrestle again.  Upon testing of the toilets it becomes obvious that they would not pass an Australian Standards review and that they are made out of particularly weak ceramic.  Jack also hears that the joinery of the cisterns to the pipes has started leaking and water is seeping into the shop below the restaurant.

Is Jack legally responsible for any of this damage?

Generally, the greatest legal risk installers like Jack face in situations like this is being held legally responsible for damage caused by their poor workmanship. Where the harm is a result of a defective product or a product not reasonably fit for its purpose, it is usually the product manufacturer or retail reseller who will be liable.  However, installers like Jack can also be liable if their actions worsen the fault contained in an already defective product.

Liability in Contract

The first potential area of liability for installers like Jack is in contract law.  If installers do not do the work they were contracted to do, they are responsible to whoever engaged them to do the work.  As many contracts are verbal rather than written, it can sometimes be difficult to determine exactly what was agreed.  However, as a minimum there are two terms implied by Federal and State legislation into every service contract:

  1. the service will be carried out with due care and skill; and
  2. any materials supplied in connection with the service will be reasonably fit for that purpose.

In this example, Jack’s contractual responsibility is to Bathroom Refurbs as they engaged him to perform the work.  In other instances he may have a contract directly with the customer, depending on the particular situation.  If it can be shown that Jack did not perform his installation in accordance with the terms of the contract (including the minimum terms implied by legislation) Jack will be liable to Bathroom Refurbs.

Liability in Negligence

If installers like Jack install goods incorrectly or without due care and skill, they can be liable for the harm the goods cause to anyone who would be reasonably expected to use them. As an installer, you have a duty of care to install the goods so that they are reasonably safe and operable for all that may come into contact with it.

The sumo wrestler and the owner of the downstairs shop could pursue Jack for their losses if they can show that a reasonable installer in Jack’s position would have acted differently and doing so would have avoided the losses.

Preventing Legal Liability: Steps You Can Take

To avoid confusion in the terms of your contracts it is recommended that you have a written contract for each job because your legal liability will depend on the Terms and Conditions of the Contract.  If this is difficult in your particular situation, your lawyer can assist you to create a set of standard Terms and Conditions to incorporate into your quotes and invoices so that they set out your preferred terms of engagement.  Then, if you do not already do so, get into the habit of setting out clearly the work to be performed for each job on the prepared quotes and invoices.  These two practices will greatly assist you in accepting the risk you are comfortable with and performing work on your terms.  At the same time, read carefully contracts or terms which others ask you to sign in relation to the work to ensure that their expectations are realistic.

To minimize your legal risk for negligence, adopt practical measures such as ensuring that installation procedures and industry guidelines are followed and Australian Standard are met.  This might be simply recording that the quality assurance procedures are followed or having another person double-check the installation.

If you are involved in installing goods which have been sourced by someone else, such as the customer or project manager, you should at the very least inspect the goods on delivery to determine quality.  Legally, you cannot exclude the terms implied by law but you may include legal clauses called indemnities or warranties in your contract.  These are promises other people make to you under a contract so that they agree to take responsibility for certain issues, such as defective goods that they supply to you.

In Jack’s case, an example of an indemnity might be a clause which requires Bathroom Refurbs Pty Ltd to be responsible for any future legal actions that arise due to the use of a product that was provided by them or from work that other contractors performed which was not up to standard.  An example of a warranty might be an assurance in the contract that all products supplied would comply with Australian Standards.

Your lawyer can assist you with creating and implementing legal documents suitable for your individual circumstances.

Conclusion

As an installer of products, cover your bases regarding both the standard of work you complete and your potential legal avenues of liability.  Adopting best practices and recording the quality assurance measures you take will help minimize the potential for problems.  Also, your lawyer can assist you in allocating the risk in your work to a level acceptable to you.

Joe Kafrouni, Legal Practitioner Director, Kafrouni Lawyers

Disclaimer

The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Business people should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.

Liability limited by a scheme approved under professional standards legislation.