Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Damages in building contracts
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- January 29, 2018 at 2:48 pm #433813
Q. A entered into a contract with B ltd to construct a wall around the garden of a house she had just purchased. The wall
was to be 3 metres high to block out a view of rubbish trip.B ltd finished the wall on 25 May. However when A came to examine it for te first time she found that it was only
2.5 metres high and that the rubbish tip was still visible from the top of her garden. The cost of making the wall
meet the required height is $2000.Which of the following remedies would A claim for
a) Injunction
b) Nominal damages
c) Damages of $2000There is a Law written in text book that in cases involving building contracts there are two ways in which the damages could, in theory, be
measured:a)the damages could be the difference in value between the building as it has been completed and its value if it had been properly completed, or
b) the cost of rebuilding so that it meets the required specifications.
The usual measure of such damages is the cost of repairing the faulty work known as the ‘cost of cure’. However, this may not be the case where the costs of remedying the defects are disproportionate to the difference in
value between what was supplied and what was ordered.I could not understand law also. Please explain me the law as well, with the help of any example. Thanks
January 29, 2018 at 3:04 pm #433816This is a past exam question from the days before F4 changed to its current format
The question is based on the case Ruxley Electronics v Forsyth where a swimming pool was the subject of the contract and the constructors failed to build the pool deep enough
The cost of draining the water, digging up the tiled floor of the pool, excavating more concrete from the bottom down to the contracted level, re-concreting, re-tiling, re-testing … would have been totally out of proportion when compared with the amenity level reduction of having a swimming pool that wasn’t quite deep enough
So the court awarded damages and the constructors did not have to rectify the pool dimensions
However, for a wall to be found to be 50 cm too short … I would have thought that it would not be disproportionate to award the customer the costs of increasing the height … but maybe I’m wrong. What do I know about the technicalities of wall building?
Maybe the only reasonable solution was to knock the wall down and start again finishing with a 3 meter wall … but I doubt it
OK?
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