Enforceability Status
Express warranty exclusion clauses in North Carolina new construction contracts are generally enforceable. North Carolina does not have a comprehensive residential construction defect statute. Warranty claims are governed by general contract law, the UCC (N.C. Gen. Stat. Ch. 25), and the six-year statute of repose for improvements to real property (N.C. Gen. Stat. section 1-50(a)(5)).
Legal Analysis
North Carolina law permits builders to define the scope of express warranties in residential construction contracts. Under N.C. Gen. Stat. section 25-2-316, sellers may exclude or modify implied warranties if the disclaimer meets conspicuousness requirements. For new home construction, builders commonly provide tiered warranties with specific exclusions for categories such as cosmetic defects, landscaping, and homeowner-caused damage.
North Carolina courts recognize an implied warranty of habitability in new home construction. In Hartley v. Ballou (1972), the North Carolina Supreme Court held that builders of new homes impliedly warrant that the home is constructed in a workmanlike manner and suitable for habitation. However, the scope of this implied warranty and its interaction with express warranty limitations has been the subject of subsequent litigation.
N.C. Gen. Stat. section 1-50(a)(5) establishes a six-year statute of repose for claims arising from improvements to real property, measured from the later of the specific last act giving rise to the claim or substantial completion of the improvement. This provides an outer boundary for construction defect claims regardless of warranty terms.
The North Carolina Unfair and Deceptive Trade Practices Act (N.C. Gen. Stat. § 75-1.1) may provide additional remedies if warranty exclusions are presented in a misleading manner. Violations of this statute can result in treble damages, which provides meaningful deterrence against deceptive warranty practices.
Relevant North Carolina Law
Establishes a six-year statute of repose for claims arising from improvements to real property, providing an outer boundary for construction defect claims.
Governs express and implied warranties in sales transactions, including provisions for exclusion and modification of warranties.
Prohibits unfair or deceptive acts in commerce, providing treble damages for violations that may include misleading warranty practices.
Related Cases
The North Carolina Supreme Court recognized an implied warranty of habitability in new home construction, holding that builders warrant their homes are constructed in a workmanlike manner.
Builders in North Carolina Using This Clause
What North Carolina Buyers Should Know
- Understand the Implied Warranty of Habitability North Carolina recognizes an implied warranty that new homes are built in a workmanlike manner and suitable for habitation. This implied warranty may provide rights beyond those in the builder's express warranty.
- Note the Six-Year Statute of Repose North Carolina law provides a six-year outer limit for bringing construction defect claims from the last act or substantial completion. This statutory period may differ from the builder's express warranty period.
- Review Exclusions for Regional Conditions North Carolina builder warranties commonly exclude damage from humidity, moisture intrusion attributed to improper homeowner maintenance, settling, and landscaping. These exclusions can be significant given the state's climate.
- Consider Unfair Trade Practices Remedies If warranty exclusions were presented in a misleading manner, the North Carolina Unfair and Deceptive Trade Practices Act may provide treble damages, which creates a meaningful remedy beyond the warranty terms.