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Written Notice of Defect Under Housing Merchant Implied Warranty Waived by Undertaking Repair

The homeowners (defendants) refused to pay the builder (plaintiff) the final payment under a custom home building contract because of alleged defects in the home.  The homeowners counterclaimed for breach of the housing merchant implied warranty.  The Fourth Department determined the written-notice-of-the-defect warranty-requirement was not an express condition precedent and the  builder had waived the requirement by undertaking the repairs in the absence of written notice:

…[W]e agree with plaintiff that defendants failed to provide written notice of the alleged defects, which is a constructive condition precedent to asserting such a counterclaim (see General Business Law § 777-a [4] [a];…, plaintiff waived the written notice requirement by addressing the defects after receiving defendants’ oral notification of those defects… .We reject plaintiff’s contention that written notice of the alleged defects was an express condition precedent that was bargained for by the parties and could therefore not be waived. Contrary to plaintiff’s contention, the requirements of General Business Law § 777-a, including the written notice req uirement, are implied in every contract for the sale of a new home as a matter of public policy (§ 777-a [5]) and thus may be applied by the courts “to do justice andavoid hardship”….  Rich v Orlando, 521, 4th Dept 7-5-13

 

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