Building Contract in UK Law

The second ground upon which the recovery of damages is resisted is that Investments in fact reimbursed Corporation for the money they spent on the repairs. But here again in my view who actually pays for the repairs is no concern of the defendant who broke the contract. The court will of course wish to be satisfied that the repairs have been or are likely to be carried out but if they are carried out the cost of doing them must fall upon the defendant who broke his contract.

In such a case, it seems to me proper, as in the case of the carriage of goods by land, to treat the parties as having entered into the contract on the footing that Corporation would be entitled to enforce contractual rights for the benefit of those who suffered from defective performance but who, under the terms of the contract, could not acquire any right to hold McAlpine liable for breach.

But in construing such a contract one starts with the presumption that neither party intends to abandon any remedies for its breach arising by operation of law, and clear express words must be used in order to rebut this presumption.

The problem which has arisen in the present case is one which is most likely to arise in the context of the domestic affairs of a family group or the commercial affairs of a group of companies. How the members of such a group choose to arrange their own affairs among themselves should not be a matter of necessary concern to a third party who has undertaken to one of their number to perform services in which they all have some interest.

Dealing with this subject, the learned editors of Hudson's Building and Engineering Contracts, 8th edition, say at page 319 that there are in fact three possible bases of assessing damages, namely, ( a) the cost of reinstatement; ( b) the difference in cost to the builder of the actual work done and work specified, or ( c) the diminution in value of the work due to the breach of contract.

(4) Where a specialist subcontractor is vetted, selected and nominated by a building owner it may be possible to conclude (as in Junior Books) that the nominated subcontractor has assumed a direct responsibility to the building owner. I do not, however, see any basis on which Pilkington could be said to have assumed a direct responsibility for the quality of the goods to Simaan: such a responsibility is, I think, inconsistent with the structure of the contract the parties have chosen to make.

Much of the plausibility of the argument on behalf of the guarantors seemed to me to be derived from the assumption that the contract price was simply a purchase price.