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“Force Majeure”, During Warranty Period

09/15/2010 8:15 AM

A project has been completed and turned-over to the Owner with a one year warranty period. During the warranty period, a lightning strike damaged some electrical items. Note that all electrical works were carried-out in accordance with the design drawings and specifications. Now, due to the importance of the facility, the Construction Manager, who oversees the administration of the project, asked the Contractor to replace the damaged items. The Contractor acted upon such request, replaced those items and the facility was back to service.

The question now that needs to be clarified is this (clarification purposes only). Is it the Contractor's total responsibility to shoulder all the costs of replacing the damaged items and the restoration? Your comments, suggestions and knowhow about this situation will be helpful and appreciated. Thank you in advance.

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#1

Re: “Force majeure”, during warranty period

09/15/2010 8:28 AM

all electrical works were carried-out in accordance with the design drawings and specifications.

Who checked that the specifications met local legal requirement ? If lightning strike forms no part of such, the owner pays. If otherwise, the contractor has a liability. Whatever the legaility, why had nobody forseen this possibilty (if, as location suggests, it may not be an infrequent event)? You need advice form somebody with local knowledge.

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#8
In reply to #1

Re: “Force majeure”, during warranty period

09/15/2010 7:34 PM

Thank you kris and to all CR4 folks who shared their opinions.

This is an FAA project. These are the edge lights of the apron, taxiway and runway. The lights are in a series circuit (please understand that I'm not electrical engineer-just CQC engineer of the project) with isolating transformer each light on ga. 8 conductors on 2" PVC conduit and with a matching ga. 8 bare copper counterpoise connecting all s. s. canisters for each of the light mounting. Contractor followed/did the work according to the electrical design and specifications. One thing strange about this lightning strike is that it also created some "pop-up" holes from 1" to 3-1/2" dia. and up to 1-1/2" deep (conical) scattered along its path on the taxiway(asphalt) pavement before hitting one of these lights. The isolating transformer of this light burst showing transformer wires coming out of the insulation and also affecting other adjacent transformers and lights.

I will work out a partial drawing later today (just preparing to go to work now, I'm getting late) to share for your further comments.

Regards,

willy

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#2

Re: “Force majeure”, during warranty period

09/15/2010 8:53 AM

"Is it the Contractor's total responsibility to shoulder all the costs of replacing the damaged items and the restoration?"

Unless there is verbage in your contract stating that you will be responsible for lighting damage to equipment you furnished and installed - ABSOLUTLY NOT!

If the project was constructed per the drawings and specifications and said work was signed off on, the contractors responsibility ends there.

If the "facility" has insurance for lightning damage, they should file a claim but irregardless, the contractor must be paid for the repair work in a prompt fashion.

If insurance is involved, do not let the owner tell you that you will be paid when they get paid. The insurance payout is not your problem PERIOD.

If you fulfilled your contractual obligation when the project was completed and all parties signed off on said project then this is on the owner.

Do not allow yourself to be suckered into making this your problem.

A lightning strike has nothing to do with warranty issues unless specifically called out in the contract documents.

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#3

Re: “Force Majeure”, During Warranty Period

09/15/2010 11:31 AM

Where i live, force majeure is applicable only for delay in completion....acts of God, strikes, riots, whatever. You have delivered on time. Force majeure no longer applicable. Your liability is limited to the extent of your work, any defects therein.

i would look pretty foolish trying to claim warranty free replacement of my TV which i dropped and broke one hour after buying because i couldn't control my fart

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#4
In reply to #3

Re: “Force Majeure”, During Warranty Period

09/15/2010 1:43 PM

Whether you could control it or not, botty blowout is beside the point. The important fact is, did you know such panty episode would occur, and might one have expected you to take reasonable precaution for self and those in the vicinity. The fact the Wall Mart sell baked beans does not entitle me to enter and scoff sufficient beans to fell a square mile block. I could not even sign away my statutory rights and obligations.

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#5

Re: “Force Majeure”, During Warranty Period

09/15/2010 3:47 PM

As others have said, "ACT OF GOD" is not covered under standard warranty.

If however the equipment did not include basic surge or spike protection and was damaged by a commonly occurring surge or spike, then you may need to pay (due to a design fault with your equipment not being adequately protected for its use and application).

It really depends on the equipment, the lightning strike and your customer service (is it really worth the time, money and your potential reputation damage arguing over).

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#6

Re: “Force Majeure”, During Warranty Period

09/15/2010 5:50 PM

It totally depends on the wording of the warranty.

If the warranty is for one year on materials and workmanship, it's the owners responsibility.

If the warranty just says, this unit is warranted for one year against failure. I'd say it's your baby. And it may be time to rewrite your warranty, to exclude events such as this. (limited warranty)

The best way, if it isn't clear, would be to, rather than try to make owner pay everything, maybe offer to eat the labor if he covers the parts. Or a 50/50 split on everything.

Of course, there's no way to know how much money you're talking about, which would also come into play.

Either way, it sounds like a good idea to install some type of lightning protection.

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#7

Re: “Force Majeure”, During Warranty Period

09/15/2010 6:43 PM

Force Majeur is totally out of place and what you refer to as Warranty Period should be Defect Liability Period.

I have been designing Lightning system protection for some projects and my comments are that equipment cannot be dammaged by lightning if the design and implimentation of the design is proper.

Since in your case dammage did occour, it can be that the design has not been adequate or the contractor did not follow the design. In the former case the contractor cannot be held responsible.

In DLP whenever an equipment fails an inquiry is initiated to pin point the very case of failure, accordingly the manufacturer or the designer or contractor or the end-user (operator) is held responsible (It is not always the contractor).

Best option available to you was to ask the Construction Manager to jointly investigate the cause as to who is responsible, still it may not be late.

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#9

Re: “Force Majeure”, During Warranty Period

09/16/2010 5:09 AM

This is a copy of the detailed drawing of the edge light installed for the apron and taxiway.

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#11
In reply to #9

Re: “Force Majeure”, During Warranty Period

09/16/2010 3:29 PM

Can you please highlight the lightning protection, In this drawing I cannot see it, except that if there is a tall structure by its side which can provide protection to adjacent objects (your scope of work) falling in an angle of 45 degrees (BS6651) to that structure. In your case I can merely guess lightning protection in the form of wire mesh covering light fixture connected to an earth conductor running down to the dedicated earth pit in the shortest run, whole lightning protection system essentially isolated from the light fixture installation.

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#12
In reply to #11

Re: “Force Majeure”, During Warranty Period

09/16/2010 6:17 PM

Hi mountk2,

I get back to you later today.

Thanks.

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#13
In reply to #11

Re: “Force Majeure”, During Warranty Period

09/17/2010 7:42 AM

Hi mountk2,

The work performed by the Contractor as part of the apron reconstruction contract is installation of edge lights for the apron and taxiway additional to the existing runway edge lights. The electrical drawings provided as part of the contract documents did not show/require any lightning protection and also no indication in the electrical drawings of the existing edge light circuit diagram. What I know is that the Terminal Building (rehabilitation from a previous contract by another Contractor) has lightning protection.

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#14
In reply to #13

Re: “Force Majeure”, During Warranty Period

09/17/2010 7:51 AM

Excuse my ignorance here, Willy. Was the damage from direct lightning strike or a surge caused by grounding to earth from the terminal building ?

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#15
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Re: “Force Majeure”, During Warranty Period

09/17/2010 8:50 AM

Kris, No. It actually started from one of the taxiway edge lights (close to the holding line) that was knock-off when the lightning strike passed through the taxiway after popping-up some holes (mentioned in post # 8) on the asphalt pavement.

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#16
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Re: “Force Majeure”, During Warranty Period

09/17/2010 12:25 PM

Thanks, Willy. Out of my deapth here, but I'll be fascinated to see how this one pans out. It's a tricky situation, and I still think you need local expert knowledge. All best.

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#17
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Re: “Force Majeure”, During Warranty Period

09/17/2010 1:44 PM

Contractor cannot be held responsible for someone else ommissions, it is clear that design for lightning protection is not there in your area of contract involvement and the equipment is vulnerable due to design flaw.

Lightning has struck and it can strike again, codes for example BSS 6651 give charts for number of lightening strikes per year in various regions across the globe for severety assessment and design basing.

(a) Involve someone with adequate knowlede of lightning protection, prepare your case well and take up with the Client to issue you a variation order (V.O.) to impliment the crucial but missing lightning protection design on all the installations in your scope. OR

(b) Ask for the reimbusment of charges for the rectification of dammaged equipment and indemnity from consequences of future lightning accidents.

If you go through the part of contract dealing with Defect Liability Period (Guarantee) it would become clear to you that the contractor's luiability is limited to workmanship and supplies only.

I am confident that the matter is straight forword and wish you success.

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#18
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Re: “Force Majeure”, During Warranty Period

09/17/2010 8:14 PM

Hi mountk2,

Thank you for your valid comment. This is also the informal assessment of one Public Works' electrical engineer in the locality and he is being ask by the Airport Manager to make a recommendation on the upgrading of the existing system. I give you a GA for that.

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#10

Re: “Force Majeure”, During Warranty Period

09/16/2010 8:01 AM

Hi Willy,

It would be improper to give a true legal opinion without knowledge of the terms and provisions of the contract between the parties.

However, it is usual (using the British system) to have a defined stage of "Practical Completion", "Handover", where the project has reached the stage where ownership is passed over to the owner (or Principal), subject to agreed completion of any outstanding items and warranty provisions. Warranty or Defect Liability provisions are to cover defects in manufacture, specified quality provisions and "fit-for-purpose" where this may be specified.

Prior to Practical Completion where the equipment ownership still may reside with the contractor and his insurance, a lightning strike failure should be covered under the contractor's insurance (providing he has it, and the contract should require that he has it)

I believe the contractor/supplier would only be responsible for subsequent damage where it could be demonstrated that the failure due to lightning, when ownership has passed to the Principal, only resulted as a direct shortfall of the contractor's design or supply responsibilities under the contract.

For example, your newly purchased car, still under warranty is struck by lightning. If it damages the duco, you could be expected to bear the costs. If it damaged the alternator because the wiring was obviously under-designed, i.e. clearly acceptable design shortfall, then it is likely the manufacturer's responsibility.

You could get all versions of opinions but it will fall back on the provisions of the particular contract.

Good luck,Bob

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AussieBob (1); jack of all trades (1); KJK/USA (1); kramarat (1); Kris (4); kvsridhar (1); mountk2 (3); willyap06 (6)

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