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Building contract

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Building contract

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by MikeLittle.
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  • Author
    Posts
  • December 23, 2017 at 5:42 pm #424582
    humai
    Participant
    • Topics: 757
    • Replies: 248
    • ☆☆☆☆☆

    Sir please explain me the following

     in cases involving building
    contracts as 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.

    Also please explain me the following case

    Ruxley Electronics and Construction Ltd v Forsyth (1995)

    Facts: The parties had entered into a contract for the construction of a 
    swimming pool. Although the contract stated that the pool was to be 
    7ft 6in deep at one end, the actual depth of the pool was only 6ft 9in. 
    The total contract price was around £18,000. Fixing the error would 
    have required a full reconstruction and would have cost about 
    £21,000.
    Held: The House of Lords considered that, as the costs of reinstatement 
    would have been out of all proportion to the benefit gained, the 
    difference in value only should be awarded. This was £0 as the pool 
    as constructed was just as suitable for swimming and diving as one 
    built to the original specification. However, the House of Lords did 
    uphold the lower court’s award of £2,500 for loss of 
    amenity/enjoyment (although they commented that the amount was 
    on the high side).

    December 23, 2017 at 8:26 pm #424599
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    What is there to explain? The pool was built – it was a swimming pool that was ordered and it was a swimming pool that was built

    As I mention in lectures the only reason that I can imagine that the Court would find differently would be if the claimant was an olympian that needed a pool of olympian measurements for the purposes of training in ideal conditions

    Move on and stop drowning in this minutiae!

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  • The topic ‘Building contract’ is closed to new replies.

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