Two home owners filed separate lawsuits against the builder for breach of contract, breach of express and implied warranties, negligence, and failure to perform in a workmanlike manner. The trial court consolidated the cases and entered summary judgment in favor of the builder. The home owners appealed and the state court of appeals held that the builder could offer an express limited home warranty that waived implied warranties of good workmanship. The home owners appealed that decision to the Ohio Supreme Court. On appeal, the sole question considered by the court is “whether a home buyer can waive his right to enforce the builder’s legal duty to construct the house in a workmanlike manner using ordinary care.”
In May 2011, NAHB joined the Ohio Home Builders in filing an amicus brief in support of Centex, arguing that the great weight of authority supports the Court of Appeals holding that the waiver of the implied warranty of workmanship does not violate public policy. The Ohio Supreme Court heard arguments in October 2011. On March 15, 2012, the court issued a decision reversing the lower courts and finding in favor of the home owners that they may not waive the implied warranty of workmanship.
The Ohio decision is in the minority – the majority of states that have considered the question have held that disclaimers of implied warranties are not contrary to public policy – they agree that parties should have the freedom to contractually define their respective responsibilities. There are valid reasons for allowing the parties to contractually waive and/or replace the implied warranties. In contrast to the express performance standards typically included in express warranties that many builders provide, implied warranties create uncertainty and unpredictability because they are vague. To protect both home builders and buyers from uncertainties inherent in the implied warranties, as well as lawsuits that typically follow uncertainty, the standard practice throughout the country has been to define the specific responsibilities of the builder, either in express home owner warranties or by statute.