Damages are intended to putting the person back into the position they should have been Intended to place innocent party in the same position as if breach had not occurred The ruling principle Robinson v Harman The plaintiff is, so far as many can do it, to be placed in the same situation as if the contract had been performed’ Hadley v Baxendale Award of damages should fall into one of the two categories - Damages that may fairly and reasonably be First Limb considered to arise naturally from the breach - Damages that parties know or ought to have Second Limb known, at time of entering contract, was likely result of a breach Damages for defective building work In cases of defective building work, innocent party entitled to damages to ‘demolish and replace’ but only if necessary and reasonable. Bellgrove v Eldridge Contract for construction of a house Contractor claimed final payment Owner counterclaimed for damages substantial departure from specifications – concrete foundations – Contractor argued foundations trial be ‘underpinned’ Held: Court not satisfied that underpinning would be successful. Departure so substantial that only remedy was to owner in same position as if contract had been performed That meant demolishing house & restricting High Court agreed General presumption in favour of damages’. But must be ‘reinstatement Necessary to produce conformity; and A reasonable course to adopt If not reasonable, the measure of damages will be’ ‘true The diminution in value ... if any, product by the ... defective workmanship Example House has been built perfectively EXPECT instead of pink tiles they are black tiles Breach of contract Diminution in the of your home INSTEAD of the cost of – ripping out the tiles and replacing them Ruxley Electronics v Forsyth Contractor agreed to building swimming pool Specification: 7’6 deep at the deep end Finish pool was only 6’9 deep at the deep end Pool was perfect in all respects claimed damages equivalent to cost of demolishing and replacing Evidence No doubt that owner had made clear his requirement 7’9 deep No doubt that was very annoyed Demolition & reconstruction would cost $21K Diminution value was $0
Damages are intended to putting the person back into the position they should have been Intended to place innocent party in the same position as if breach had not occurred The ruling principle Robinson v Harman The plaintiff is, so far as many can do it, to be placed in the same situation as if the contract had been performed’ Hadley v Baxendale Award of damages should fall into one of the two categories First Limb - Damages that may fairly and reasonably be considered to arise naturally from the breach Second Limb - Damages that parties know or ought to have known, at time of entering contract, was likely result of a breach Damages for defective building work In cases of defective building work, innocent party entitled to damages to ‘demolish and replace’ but only if necessary and reasonable. Bellgrove v Eldridge Contract for construction of a house Contractor claimed final payment Owner counterclaimed for damages – substantial departure from specifications – concrete foundations Contractor argued foundations be ‘underpinned’ Held: Court not satisfied that underpinning would be successful. Departure so substantial that only remedy was to owner in same position as if contract had been performed That meant demolishing house & restricting High Court agreed General presumption in favour of ‘reinstatement damages’. But must be Necessary to produce conformity; and A reasonable course to adopt If not reasonable, the ‘true measure of damages will be’ The diminution in value ... if any, product by the ... defective workmanship Example House has been built perfectively EXPECT instead of pink tiles they are black tiles Breach of contract Diminution in the of your home – INSTEAD of the cost of ripping out the tiles and replacing them Ruxley Electronics v Forsyth Contractor agreed to building swimming pool Specification: 7’6 deep at the deep end Finish pool was only 6’9 deep at the deep end Pool was perfect in all respects claimed damages equivalent to cost of demolishing and replacing Evidence No doubt that owner had made clear his requirement 7’9 deep No doubt that was very annoyed Demolition & reconstruction would cost $21K Diminution value was $0 trial
Construction_Law.docx