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What Is a Latent Defect?

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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 13 April 2014
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A latent defect is a hidden defect which could not be uncovered during a routine inspection process. The opposite of a latent defect is a patent defect, a defect which is visible during a successfully conducted inspection. Latent defects can become a point of contention in liability law, depending on a number of different circumstances surrounding the defective object. Since people can't find these problems until after they buy a product, they can be a problem for the buyer.

As a general rule, when people buy new products, the understanding is that they buy with an awareness of any existing defects or problems. Any breakage or other issues are thereafter the responsibility of the buyer. This is based on the assumption that if the product had patent defects, the buyer had the opportunity to refuse the purchase. All of this changes with latent defects. In this case, the buyer had no way of knowing about the defect because destructive, unusual, or laborious testing techniques might have been needed to uncover it.

In some cases, a seller may be considered liable for latent defects. Protection against latent defects is often written into sales contracts, spelling out the situations in which the seller will be obligated to replace or repair the damaged object. For example, if a the transmission in a newly purchased car fails after 100 miles, the dealer would likely be responsible for this latent defect.

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If there is no clause in the contract specifically addressing latent defects, the buyer may have to take legal action to recover damages from the seller. In this situation, the ruling can go in a number of ways. If the buyer can prove that the seller knew about the defect and did not disclose it, this is misrepresentation, and the buyer will probably win the suit. Likewise, if a seller tries to conceal a patent defect, this is also misrepresentation. If the seller can prove genuine innocence, however, or he or she can show that the buyer was aware of the latent defect, the case may be decided in favor of the seller.

Latent construction defects are an example of an especially costly type of defect which can plague some businesses. Several insurance companies actually offer latent defect insurance, providing protection for policyholders such as businesses and building owners. In this case, the insurance will pay out if a latent defect causes problems, compensating buyers or sellers for losses caused by poor construction. The insurance will usually encourage the customer to file suit before filing an insurance claim in the hopes of making the builders pay out for the damage.

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Discuss this Article

anon338117
Post 5

Please help me understand more about latent defect. I'm doing my assignment and it's based on a lady who bought a car and later on she found that the steering wheel of the car was vibrating and shaking. She then took a car to a dealership for a steering repair. After some weeks, the steering was vibrating again so she sent the car back to the dealership claiming that it was a latent defect. If this lady sues this dealership, will she succeed in court?

anon314201
Post 4

Can the homeowner make the insurer pay the entire cost to correct a wall where lightning hit a house, splitting the wall which had a prior latent split and the lightning increased the size of the split? The homeowner has an HO2 policy.

Mor
Post 3

@KoiwiGal - To be honest it's not things like laptops that make me worry. It's houses and other buildings.

Most of the time they will be up to code, but there have been all kinds of cases where there has been latent defects in construction and no way for the owner to get their money back.

For example, the people who bought houses in the 70s and 80s with asbestos.

At the time, no one thought anything of it, as it was a common building material. It's only more recently that people realize how dangerous it can be.

But what are your choices if you've got a house like that? Write it off? Fix it? Sell it? Whatever option you pick, you're going to lose money.

KoiwiGal
Post 2

@umbra21 - In some cases it's actually really comprehensive what the store has to do for you. I had a friend who had a laptop for almost a year and it broke down just before the year was up.

It turned out to be a latent defect, and after a few communications with the people who made it, she was given a whole new laptop.

Since they no longer made the version she was using, she was given the latest version, for free.

I think the main problem, though, is proving that it was a latent defect and not misuse, particularly after a longer amount of time.

I mean, if you're using a laptop for a year, for example, and the screen suddenly shorts out, well, unless they can clearly see that it was because of a manufacturer's error, they could just blame you for being too rough with the screen.

umbra21
Post 1

One thing you want to make sure of before buying a big item, like a piece of white ware, is the legality surrounding it after the purchase.

I know in my country, if the item (big or small, expensive or not) has a latent defect, there is a certain amount of time in which you can return the item and the place that sold it has to refund your money.

But, I also know that in spite of the fact that this is the law, many places try to sell warranties to their customers with big items, which basically guarantee the exact same thing they already have to do by law if the item has a latent defect.

These can be as much as $200, of what is essentially wasted money.

So, it's definitely a good idea to check before you buy as to what the business has to do for you if there is a latent defect in the item and whether it's the seller or the maker who has to do it.

Go into the store with that knowledge and they won't be able to sucker you into buying anything you don't need.

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