Brief Fact Summary. The Plaintiffs, Mr. and Mrs. Lemke (Plaintiffs), brought suit to recover damages from a builder who constructed a garage on a house they built. The garage was found to have several substantial defects after the Plaintiffs had purchased the property.
Synopsis of Rule of Law. Privity of contract is not necessary for a purchaser to sue a builder or contractor under an implied warranty theory for latent defects which manifest themselves within a reasonable time after purchase and which cause economic harm.
Issue. Whether a purchaser of real property may sue the builder/contractor absent privity of contract for defects on the theory of implied warranty of workmanlike quality.
Held. Reversed. There is no privity requirement in suits by subsequent purchasers against a builder or contractor for a breach of an implied warranty of good workmanship for latent defects.
The implied warranty of workmanlike quality exists independently and is imposed by law as a matter of public policy. Therefore, implied warranties are not created by agreement and thus no privity of contract is required.
Economic loss recovery is allowable for suits for breach of implied warranty for latent defects.
The implied warranty of workmanlike quality is limited to suits concerning latent defects which become manifest after the subsequent owner’s purchase and which were not discoverable had a reasonable inspection of the structure been made and can only be brought within a reasonable period of time.
These definitions are consistent with the policy of warranty law to protect expectations of suitability and quality.View Full Point of Law