Defects, repair and fundamental breach

The benchmark is the contract, not a general expectation of quality. Under VÕS § 641, the work must conform to the terms of the contract. If it does not, there is a non-conformity, and the client's remedies follow from it. The exception is § 641(3): the contractor is not liable for a non-conformity that results from the client's instructions, from defects in material provided by the client or from preliminary work by a third party, if it has checked them sufficiently. That exception is covered in this branch's article on client delay.

Managing defects therefore starts with the contract. The more precisely the contract and the design set out the quality requirements, materials and tolerances, the easier it is later to say whether the work conforms or not.

A client acting in a professional or business capacity must inspect the work, or have it inspected, without delay (VÕS § 643). The contractor must be notified of a non-conformity within a reasonable time, and a client acting in a professional or business capacity must describe the non-conformity with sufficient precision (§ 644). In a consumer contract for work the notice period is 2 months (§ 644(1)), but a consumer contract for work concerns a consumer's movable property (§ 635(4)), so in construction the reasonable time requirement also applies to a client who is a consumer.

If no notice is given, the client loses the right to rely on the non-conformity. If the client had a reasonable excuse for not giving notice, it may still claim a price reduction or compensation for loss, except for loss of profit (§ 644). For a professional client, this means that inspection and written notice are not a formality but a precondition of the claim.

What the client does	Provision	What happens if it is not done
inspect the work without delay	VÕS § 643	it is hard to show later that notice was given within a reasonable time
give notice within a reasonable time and with sufficient precision	VÕS § 644	the right to rely on the non-conformity is lost (with a reasonable excuse, a price reduction or compensation without loss of profit remains)
request repair together with the notice or within a reasonable time after it	VÕS § 646(6)	the right to request repair is lost (the exception in subsection 7 concerns only a consumer contract for work, that is, a consumer's movable property)

Omanikujärelevalve (owner's supervision) helps, but it does not replace the client's own notice. Among other things, the person carrying out owner's supervision checks the quality of the construction and its conformity with the construction contract and informs the owner; their work does not exclude or limit the contractor's liability under the contract for work (Building Code (ehitusseadustik, EhS) § 20(4)). The tasks and limits of supervision are covered in the article on owner's supervision. The contractual notice to the contractor must nevertheless be given by the client or a person it has authorised.

A good notice is short, specific and dated. It names the part of the building and the location, describes what does not conform to the contract or the design, refers to the place in the contract or design that the work does not meet, and attaches photographs or measurement results. For a client acting in a professional or business capacity, sufficient precision is a legal requirement (VÕS § 644), not just good practice.

Supervision records support the client's notice. Under the procedure for owner's supervision (regulation no 80 of the Minister of Economic Affairs and Infrastructure), the person carrying out supervision checks, among other things, covered works and the quality of the construction and its conformity with the construction contract (§ 4(2)), informs the owner and the ehitaja (the builder) and enters notices in the construction works diary (§ 5). They have the right to require works that do not conform to the design or the contract to be redone (§ 6(1)), and requirements are presented in writing within 2 working days (§ 6(3)). Works that will be concealed are particularly sensitive: if a defect goes unnoticed before it is covered up, proving it later costs more in both time and money.

The client may request that the defect be remedied or that new work be produced (VÕS § 646(1)), and the contractor bears the cost of repair (subsection 4). A construction contract is not a consumer contract for work, so new work may be requested only in the case of a fundamental breach (subsection 2); the ordinary remedy is repair.

Self-help is the client's most practical financial lever. VÕS § 646(5): if the contractor does not remedy the defect within a reasonable time, the client may remedy the defect itself or have it remedied and claim compensation for reasonable expenses from the contractor. In practice, this presupposes that the client has requested repair and allowed a reasonable time for it. The word "reasonable" appears twice: both the time allowed and the expenses must be reasonable, so it pays to document both. The practical sequence for self-help is as follows:

1. a written notice with a description of the defect;
2. a written request to remedy the defect within a specific period;
3. a record that the period has expired;
4. at least one independent quotation for the repair work;
5. the repair and documentation of its costs;
6. a claim to the contractor with the documents.

If repair does not succeed, the defect becomes a ground for ending the contract. Under VÕS § 647, the contractor's breach is fundamental, among other cases, where repair is impossible, fails, is unreasonably refused by the contractor or is not carried out within a reasonable time. In those cases there is no need to grant an additional period under § 114, and the client may, among other things, withdraw from the contract.

Withdrawal for fundamental breach is a different way out from free termination. Under VÕS § 655(2), the compensation rule for free termination does not apply when the client ends the contract because of the contractor's breach. The financial comparison of the two bases is covered in this branch's article on the client's right to terminate. Withdrawal, however, requires the breach to be proved, so step 1 and step 2 must be documented.

A price reduction is a financial solution for a defect that is not repaired, but the Act restricts it. Under VÕS § 648, the client cannot reduce the price if the contractor has brought the work into conformity with the terms of the contract or if the client has unreasonably refused the contractor's offer to do so. A client who prefers money to repair and therefore turns down the contractor's offer to repair may thus also lose the price reduction.

The timing of payment is also a lever. Under VÕS § 637(5), the client does not have to pay the fee before it has had the opportunity to inspect the work, unless otherwise agreed in the contract. Many construction contracts agree a different payment procedure based on interim invoices, so it is worth checking before signing whether and how interim invoices are linked to inspection of the works.

What the client wants	Legal basis	Limit
to have the defect repaired at the contractor's cost	VÕS § 646(1) and (4)	repair must be requested in time (§ 646(6))
to remedy the defect itself and claim the cost	VÕS § 646(5)	the contractor does not repair within a reasonable time; the expenses must be reasonable
to reduce the price	VÕS § 648 (restriction)	not possible if the contractor repaired, or if the client unreasonably refused an offer to repair
to withdraw from the contract	VÕS § 647	the breach must be fundamental

Acceptance is the client's obligation, but it does not mean putting up with defects. Under VÕS § 638, the client must accept finished work; if it refuses without good reason within a reasonable time set by the contractor, the work is deemed accepted. Defects discovered on acceptance should therefore be recorded in the acceptance document, together with a request for repair and a deadline.

The kasutusteatis (notice of use) or kasutusluba (occupancy permit) needed before the building can be used is a public-law procedure, which does not replace contractual acceptance, nor the other way round. It is covered in the building permit guide's article on the occupancy permit and the notice of use.

The limitation period for a claim under a contract for work arising from a defect in a structure is 5 years (General Part of the Civil Code Act (tsiviilseadustiku üldosa seadus, TsÜS) § 146(2)), compared with the general 3-year period for a claim arising from a transaction (subsection 1). If the obligation was breached intentionally, the limitation period is 10 years (subsection 4). Under VÕS § 651, the period starts running from completion of the work or, if the work has to be accepted, from acceptance.

A consumer client has additional protection. If the construction contract is concluded between a business and a consumer, a non-conformity that becomes apparent within 2 years of handover is presumed to have existed at handover; an agreement to the contrary is void (VÕS § 642(2^1)). This presumption does not extend to a professional client.

Limitation does not replace notice. The 5-year period is the time for bringing a claim, but the duty to give notice under § 644 applies separately: notice of a defect must be given within a reasonable time after it is discovered, not at the end of the limitation period.

From the point of view of the final cost, a defect has three possible prices. If the client acts in time, the contractor bears the cost of repair and the client's cost is time and the work of its own staff. If the client remedies the defect itself, it pays for the repair up front and claims it back, bearing the risk of recovery. If the client loses its rights because of late notice, it pays for the repair itself.

A contractual penalty for defects is possible, but it does not replace repair. If the contract provides for a penalty, for example for missing the deadline for remedying defects, the same limits on its amount apply as to any contractual penalty; see the article on contractual penalties and their limits.