New Defects Clause Samples
The "New Defects" clause defines the parties' responsibilities and procedures regarding defects that are discovered after initial inspections or handover. Typically, this clause outlines the timeframe within which new defects must be reported, the process for notification, and the obligations of the responsible party to remedy such defects. For example, if a construction project is completed and a previously undetected issue arises within a specified period, the contractor may be required to fix it at no additional cost. The core function of this clause is to ensure that any latent or newly discovered issues are addressed promptly, thereby protecting the interests of the party receiving the work and maintaining quality standards.
New Defects. If, prior to Closing, Purchaser or any Seller discovers that: (i) title to any Project is subject to defects, limitations or encumbrances not shown on the Title Commitments or the Updated Surveys and/or (ii) there is a violation of any Law at any Projects which arose after the Approval Date (each a "New Defect" and collectively, the "New Defects"), then the party who discovered the New Defect shall give the other party on or before the date which is five (5)business days after its discovery (the "New Defect Notice Date"), written notice of the New Defect (each a "New Defect Notice"). In such event, Sellers or Purchaser may elect to postpone the Closing for up to thirty (30) days in order to provide Sellers with an opportunity to cure such New Defect. The parties acknowledge and agree that no Seller shall have any obligation to cure any New Defect unless such New Defect is a Consensual Lien. Sellers shall give Purchaser written notice (the "Election to Cure") of whether it intends to cure such New Defect on or before the date which is five (5)business days after receipt (or delivery) of the New Defect Notice (the "Cure Election Deadline"). If Sellers fail to deliver the Election to Cure by the Cure Election Deadline, then Sellers shall be deemed to have elected not to cure the New Defect. In the event that Sellers fail to cure, elect not to cure or are deemed to have elected not to cure such New Defect, then Purchaser shall have the right to elect on or before the date which is five (5) business days following the Cure Election Deadline (the "New Defect Termination Date") to terminate this Agreement (which election may be made in Purchaser's sole and absolute discretion). In the event that Purchaser delivers written notice to Sellers of its election to terminate on or before the New Defect Termination Date, then this Agreement shall be deemed terminated as of the date of such notice and the Deposit shall be returned to Purchaser, whereupon neither the Sellers nor the Purchaser shall have any further liability to the other hereunder, except for Surviving Obligations hereunder. In the event that Sellers fail to cure, elect not to cure or are deemed to have elected not to cure such New Defect and Purchaser fails to make an election to terminate on or before the New Defect Termination Date, then all the matters set forth in a New Defect Notice shall be deemed to be Permitted Encumbrances. The parties agree that the provisions of this Section 12.3 are not intend...
New Defects. From and after the date of this Agreement, Seller shall not execute any agreement, document or other encumbrance that will bind the Property or Purchaser after the Closing Date (a “New Defect”). Seller shall be obligated to cure and satisfy of record all New Defects, unless Purchaser has consented in writing to such New Defects, which consent may be granted or withheld in Purchaser’s sole and absolute discretion.