Ruxley Electronics & Constructions Ltd v Forsyth  AC 344
Pool not built to specified depth; whether cost of re-instatement recoverable
Ruxley agreed to build a swimming pool at Forsyth’s home. The contract specified the depth of the pool was to be seven feet and six inches. Ruxley completed the pool to a depth of six feet and nine inches. Forsyth brought an action for breach of contract, claiming the cost of rebuilding the pool to the specified depth.
Ruxley argued the pool was still safe for diving despite the breach and Forsyth had not, therefore, suffered any damage in terms of a loss to the value of his home. Given the cost of re-building the pool was £21,560, it would be wholly unreasonable and disproportionate to the loss Forsyth had suffered in not having the pool at his desired depth. He further contended that Forsyth had no actual intention of having the re-building work conducted and, therefore, he had not suffered any loss. Forsyth argued that Ruxley had failed to perform his specific obligations under the contract and he should, therefore, be entitled to damages which would place him in the position he would have been in had the obligations been appropriately performed. He asserted it was irrelevant whether he chose to use the damages for the re-building work.
Forsyth could not recover the cost of re-building because this would be totally out of proportion to the loss he had suffered. He could recover £2,500 for loss of amenity but the law must cater for cases where full performance of the promise would vastly exceed the loss which had truly been suffered. The pool was, in fact, worth no less because of the breach but to award nothing would render the contractual promise illusory, and so a nominal award was appropriate.