November 2025
When a Construction Project Deviates Substantially from Design Drawings, Can It Still Be Deemed “Completed”? A Summary of Taiwan Supreme Court Civil Judgment No. 289 (2025)
1. Case Overview
The appellant undertook a new elementary school construction project and subcontracted the curtain wall works (the “Disputed Project”) to the appellee. Although the overall project passed the owner’s acceptance inspection, the appellant refused to pay the appellee’s final contract payment. The appellee then filed a lawsuit demanding payment and statutory interest.
The appellee argued that the curtain wall works were completed on July 11, 2014, within the contractual schedule. The appellant countered that, as of that date, the project still contained substantial defects, which were not rectified until October 20, 2014, when the works finally complied with the design drawings. The appellant, therefore, claimed that the appellee had a delay in completion and should pay the liquidated damages, which could be set off against such unpaid payment.
The issue was whether a project that had been completed in accordance with the quantity specified under the contract but substantially deviated from the design specifications could still be regarded as “completed.” This decision would directly affect whether the appellant’s claim for set-off based on delay penalties was legally valid.
2. Court Opinions
(1) Taiwan High Court, Kaohsiung Branch, Civil Construction Appeal No. 5, 2021
The High Court held that although the subcontractor mistakenly built triangular pyramid-shaped corners instead of the conical shapes specified in the original design drawings, this error constituted only a defect to be repaired later, and did not affect the determination that the project had been completed as of July 11, 2014.
The Court adopted the view that “completion of work” and “existence of defects” are distinct legal issues—meaning that a contractor may still be deemed to have completed the work, even if defects exist. Based on this reasoning, the High Court found that the appellant remained obligated to pay the contract price.
(2) Supreme Court Civil Judgment No. 289 (2025)
The Supreme Court disagreed and reversed the lower court’s position and stated: “In determining whether contracted work has been completed, one must refer to the agreed content of the contract. Where the appearance of the completed work deviates from the design drawings attached to the contract, whether such work can be deemed completed depends on a holistic assessment of the contract terms and attachments, the specific circumstances of the nonconformity with the design drawings, the difficulty of repair, and the general practices within the construction industry. In this case, the lower court shall not automatically treat it as matters of defect repair.”
Because the curtain wall façade completed by the subcontractor visibly differed from the agreed design drawings, the Supreme Court held that the issue was not a minor defect but one that affected the determination of completion. Accordingly, the lower court erred by treating the date on which the contracted quantity was finished as the “completion date” without investigating whether the nonconforming construction had already prevented the project from meeting its contractual definition of completion.
3. Conclusion
In this case, the Supreme Court clearly articulated that the determination of whether a construction project is “completed” must be based on the faithful performance of the contract and design specifications.
If the contractor’s work product substantially deviates from what was contractually agreed upon and the defect cannot be easily remedied, the project cannot be deemed completed merely because the agreed quantity of work has been executed. This ruling effectively tightens the legal threshold for “completion,” underscoring that both quantity and quality must be satisfied to constitute full performance under a construction contract. Where the executed works deviate substantially from the design drawings, the assessment of completion should depend on the specific circumstances of the nonconformity with the design drawings, the difficulty of repair, and the general practices within the construction industry. In such circumstances, the contractor may not assert completion or request payment.
In addition to the above dispute, to prevent future disagreements over “when a project is legally completed,” it is advisable that parties, at the time of contracting, expressly distinguish and define the standards for the “achievement of construction milestones” and the “final completion and acceptance.”
The appellant undertook a new elementary school construction project and subcontracted the curtain wall works (the “Disputed Project”) to the appellee. Although the overall project passed the owner’s acceptance inspection, the appellant refused to pay the appellee’s final contract payment. The appellee then filed a lawsuit demanding payment and statutory interest.
The appellee argued that the curtain wall works were completed on July 11, 2014, within the contractual schedule. The appellant countered that, as of that date, the project still contained substantial defects, which were not rectified until October 20, 2014, when the works finally complied with the design drawings. The appellant, therefore, claimed that the appellee had a delay in completion and should pay the liquidated damages, which could be set off against such unpaid payment.
The issue was whether a project that had been completed in accordance with the quantity specified under the contract but substantially deviated from the design specifications could still be regarded as “completed.” This decision would directly affect whether the appellant’s claim for set-off based on delay penalties was legally valid.
2. Court Opinions
(1) Taiwan High Court, Kaohsiung Branch, Civil Construction Appeal No. 5, 2021
The High Court held that although the subcontractor mistakenly built triangular pyramid-shaped corners instead of the conical shapes specified in the original design drawings, this error constituted only a defect to be repaired later, and did not affect the determination that the project had been completed as of July 11, 2014.
The Court adopted the view that “completion of work” and “existence of defects” are distinct legal issues—meaning that a contractor may still be deemed to have completed the work, even if defects exist. Based on this reasoning, the High Court found that the appellant remained obligated to pay the contract price.
(2) Supreme Court Civil Judgment No. 289 (2025)
The Supreme Court disagreed and reversed the lower court’s position and stated: “In determining whether contracted work has been completed, one must refer to the agreed content of the contract. Where the appearance of the completed work deviates from the design drawings attached to the contract, whether such work can be deemed completed depends on a holistic assessment of the contract terms and attachments, the specific circumstances of the nonconformity with the design drawings, the difficulty of repair, and the general practices within the construction industry. In this case, the lower court shall not automatically treat it as matters of defect repair.”
Because the curtain wall façade completed by the subcontractor visibly differed from the agreed design drawings, the Supreme Court held that the issue was not a minor defect but one that affected the determination of completion. Accordingly, the lower court erred by treating the date on which the contracted quantity was finished as the “completion date” without investigating whether the nonconforming construction had already prevented the project from meeting its contractual definition of completion.
3. Conclusion
In this case, the Supreme Court clearly articulated that the determination of whether a construction project is “completed” must be based on the faithful performance of the contract and design specifications.
If the contractor’s work product substantially deviates from what was contractually agreed upon and the defect cannot be easily remedied, the project cannot be deemed completed merely because the agreed quantity of work has been executed. This ruling effectively tightens the legal threshold for “completion,” underscoring that both quantity and quality must be satisfied to constitute full performance under a construction contract. Where the executed works deviate substantially from the design drawings, the assessment of completion should depend on the specific circumstances of the nonconformity with the design drawings, the difficulty of repair, and the general practices within the construction industry. In such circumstances, the contractor may not assert completion or request payment.
In addition to the above dispute, to prevent future disagreements over “when a project is legally completed,” it is advisable that parties, at the time of contracting, expressly distinguish and define the standards for the “achievement of construction milestones” and the “final completion and acceptance.”
