Decennial liability (the ten-year warranty) is a mandatory legal guarantee imposed by the UAE Civil Transactions Law on the contractor and the engineer, holding them jointly liable to the employer for ten years from the date of handover for any total or partial collapse affecting buildings or other fixed installations, and for any defect that threatens the structural integrity and safety of the building. This guarantee remains in force even where the defect arises from the land itself, or where the employer accepted the defective installations. Any clause intended to exempt the contractor or engineer from this guarantee, or to limit it, is void, since the guarantee is a matter of public order that cannot be contracted out of. The following is a detailed explanation of the conditions, scope, duration and enforcement of this liability.

What is decennial liability and the contractor's and engineer's liability for hidden defects under UAE law?

1. Definition and concept of decennial liability

Decennial liability is a special statutory regime established to protect the employer (owner) in contracts for erecting buildings and fixed installations. Where the subject matter of the works contract is the erection of buildings or other fixed installations, with the engineer preparing the design and the contractor executing it under the engineer's supervision, the contractor and the engineer are jointly liable to compensate the employer for any total or partial collapse occurring within ten years in what they built or erected, and for any defect threatening the structural integrity and safety of the building, unless the contract stipulates a longer period.

This liability does not depend on proving fault; it is presumed by operation of law. It suffices that a collapse occurs, or a defect threatening safety appears, within the prescribed period. An exception applies where the parties intended the installations to last less than ten years.

2. Scope of the guarantee and conditions of liability

Decennial liability arises upon the fulfilment of conditions set by law, summarised as follows:

Importantly, the guarantee remains in force even where the defect or collapse arises from a defect in the land itself, and even where the employer consented to the erection of the defective buildings or installations. The contractor and engineer are not relieved of their technical responsibility by such consent, because the obligation to ensure the safety of the building rests on considerations of public order and the protection of lives and property.

3. Joint liability of the contractor and the engineer

The law renders the liability of the contractor and the supervising design engineer a joint and several liability; that is, the employer may claim the full compensation from either of them, without being required to apportion the claim. This joint liability strengthens the position of the aggrieved owner and ensures full compensation for the damage to the installation.

In practice, it is advisable, when filing a warranty claim, to join all possible parties — contractor and engineer — so that the court may identify the party actually responsible and apportion liability among them according to each one's share in causing the damage.

4. Liability of the design engineer without supervision

The law distinguishes between the engineer who both designs and supervises execution, and the engineer whose role is limited to preparing the design. Where the engineer's work is confined to preparing the design without supervising execution, the engineer is liable only for design defects, and is not answerable for execution defects falling outside the scope of that work.

5. Nullity of the exemption clause

To preserve the effectiveness of this protection, the law provides that any clause intended to exempt the contractor or engineer from the guarantee, or to limit it, is void. This means that any contractual term seeking to drop or reduce decennial liability is treated as if it never existed, and the guarantee subsists by operation of law regardless of the contract's wording.

6. Duration of the guarantee and limitation of the claim

A careful distinction must be drawn between two periods: the guarantee period itself, and the period for hearing the compensation claim:

Thus, if the defect appears or the collapse occurs within the ten-year period, the employer must take the initiative to file the claim within three years from the date of the collapse or the discovery of the defect, otherwise the right to have the claim heard is lost. Prompt action and documenting the date the defect appeared through technical reports are therefore decisive steps to preserve the right.

7. Liability of the contractor for the subcontractor

The law permits the contractor to entrust all or part of the execution of the work to another contractor (the subcontractor), unless prevented by a term in the contract or by the nature of the work requiring personal performance. Nevertheless, the liability of the principal contractor remains subsisting towards the employer, and is not discharged merely by delegating execution to another.

Likewise, the subcontractor may not claim from the employer anything due to the principal contractor, unless the principal contractor has assigned that to the employer.

8. The contractor's obligations and guarantee for his work

Alongside decennial liability, the contractor is obliged to complete the work in accordance with the terms of the contract. If it appears that the contractor is performing the undertaking in a defective manner or contrary to the terms, the employer may seek immediate rescission where repair is not possible, or require correction within a reasonable period where repair is possible; if the contractor fails to correct, the employer may ask the court to rescind the contract or authorise entrusting completion to another contractor at the first contractor's expense.

The contractor also guarantees any damage or loss generated by his act and work, whether or not arising from his transgression or default, and the guarantee is negated where the damage results from an unavoidable accident.

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