When the Work of the Contractor is Defective
If that fact is determined, by tests, inspections or the engineer's observation, then (depending on specific contract language) some or all of the following options may come into play a.) the contractor must either correct, remove or replace the work, the engineer having the choice of which to require b.) the owner may accept the defective work and receive an appropriate adjustment, c.) if the owner believes the contractor will not do the corrective work properly, the owner may take over the work and correct the deficiency on his own at the contractor's expense. The contractor is not allowed additional time attributed to correcting defects. The owner and engineer do not have a duty to detect defects and the failure to do so does not relieve the contractor of his obligation to perform the work in accordance with the contract documents.

One Year Guarantee
Contractors have been known to refer to certain language in some standard construction contracts as a "one year guarantee" after which they have no further obligation in respect of defective work. That argument is incorrect and has been rejected by the courts. The obligation runs for the first year after substantial completion or such longer time as may be prescribed by laws, regulations or terms of any special guarantee that may be in the contract. The owner also may, and frequently does, have the benefit of other warrantees and guarantees such as those in a particular specification and/or those connected with the engineer's acceptance of substitute items, material or equipment.

The Engineer Exercises His Power
And it is one on which contractors frequently rely is issuing clarifications and interpretations of the contract documents. Those clarifications and interpretations must be fair, reasonable and professional; they should be in writing and consistent with the overall intent of the contract documents. The exercise of this authority could have an adverse effect on the contractor and accordingly they are allowed to request a time or price adjustment that they believe justified.

The Engineer with "Deep Pockets"
Those are pockets with money in them. If a contractor's employee is injured on the jobsite they cannot sue the contractor and must accept workers compensation as their remedy. This is generally less than what they can get by suing a third party. That third party could be you. That is why it is important to consistently make it clear that you are not responsible for means methods etc and jobsite safety. Beware of other words used in extreme terms and referring to you like supervision and assurances. Also have your client make sure you are named under the contractors general liability policy so in the event you are named in a suit you can tender the claim back to the general contractor.

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