What are latent defects in the context of contract performance?

Latent defects refer to hidden flaws that are not immediately observable and can significantly affect the performance of a contract. These defects are often not disclosed during the execution of the contract and may only become apparent over time or under specific conditions.

In the context of contract performance, identifying latent defects is crucial because they can compromise the integrity or functionality of the contracted deliverables. The existence of such defects can lead to disputes between parties, especially if one party is not aware of these hidden issues while fulfilling their contractual obligations.

Consequently, latent defects can present challenges in fulfilling the terms of the contract, potentially leading to necessary corrective actions or even claims for damages. Recognizing the nature of these defects helps in understanding the responsibilities of the parties involved and the implications for contract performance.