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Published: Fri, 02 Feb 2018

Construction work in the University of Reading

I have looked through the details of the events that have been occurring in the construction site of the Foxhill Halls and I can see numerous legal issues that could rise from the situations. I have stated each of the issues separately in this letter clearly discussing the issue and liabilities.

Firstly, let us look at the accidents that have been occurring in the construction area. It is clearly stated in the contractual agreement between the University and Bish & Bosh Ltd. that under Section 5, which states that The Contractor (Bish & Bosh Ltd.) shall be liable for, and shall indemnify the University against, any expense, liability, loss, claim or proceedings whatsoever in respect of personal injury to or death of any person and any loss, injury or damage whatsoever to any property real or persona arising out of or in the course of or caused by the carrying out of the Works. Due to this clause, it is quite a simple claim that the liability for damages and other personal injury from the accidents would go to Bish & Bosh due to the contractual agreement. Also, the courts could use the promises in their safety regulations which could be held as parts of a contractual agreement towards the employees and clients.

Secondly, we must look at the issue regarding the foul smelling oil found in the area. The conversation recorded in the pub is a valuable asset in this situation because it clearly shows evidence that Mr. Vernon had not discussed the matter with Mr. Salmond or any of the others in the architectural firm and had divulged the news of the oil in the pub. Therefore, Mr. Salmond is unlikely to be held liable for misrepresentation as not only was the instructions he gave not in the official manner required (in writing) he was heavily intoxicated. Mr. Vernon had known of the state at which Mr. Salmond was in even when he asked. Hence, under clause 2.3 of Section 2, the architect cannot give instructions in any other form other than writing, and so his statement telling Mr.Vernon not to worry cannot be held for misrepresentation.

Thirdly, the color of the atrium decided by the University was not respected upon and a different color of glass was used in the atrium. This is a breach of the contract as it was a requirement of the University for the color of the atrium glass to be blue. Unfortunately, the courts are unlikely to order damages for cost of reinstatement in a case like this because the glass atrium even with a different colour still performed its functions satisfactorily. Even so, the courts might allow a claim for ‘loss of amenity’ due to disappointment and discomfort to senses from the colour of the atrium.

Fourthly, the voicemail sent by Mr. Vernon to the Chancellor cannot be considered as a request for an extension. This is because it clearly states in the contractual agreement that, “if it becomes apparent that the Works will not be completed by the Date for Completion for reasons beyond the control of the Contractor, then the Contractor shall thereupon in writing so notify the University who shall make, in writing, such extension of time for completion as may be reasonable.” Even though the reasons stated in the voicemail were unforeseeable and therefore acceptable.

This concludes the main legal issues surrounding the construction project until now.

Yours Sincerely,

Aminath Aryj Hussain

Legal Analysis of the Issues in Foxhill Halls Contruction Project

Under clause 2.8 of the contractual agreement between Bish & Bosh Ltd and the University of Reading it clearly states that,

“ If the Works are not completed by the Date for Completion or by any later Date for Completion fixed under clause 2.3 the Contractor shall pay or allow to the University liquidated damages at a reasonable rate (agreed by the University and the Contractor) between such Date for Completion and the date of practical completion.”

Hence, with many unforeseen circumstances and some critical problems that arose, it is clear that the works will not be completed by the Date of Completion. And so, it would therefore be appropriate for Bish & Bosh Ltd Contractor to, in writing, notify the University for an extension of time for completion. This letter could however, be rejected by the University since, the intervening events were not all unforeseeable and some were direct breaches to the contract made and hence could lead to a legal liability by Bish & Bosh Ltd. These breaches and unforeseeable circumstances would be discussed in detail in the following pages.

Frustration of Contract – Unforeseeable Intervening Events

Two unforeseen events occurred after the contract was made that led to delays in performance and inconvenience towards both parties. Whether these supervening events would lead to a breach in contract, nullification of the contract or payment of damages is yet to be seen.

Firstly, the oil that was found during the course of laying down the foundation in the new Foxhills Halls caused two consequences, the foundation work for Foxhill Halls needed to be reassured and dug deeper and secondly the need of extra finance and time to do this.

The severe storms that hit Britain with strong winds and heavy rain causing flooding and damage was one of the worst storms of the year as reported by BBC. It had especially affected the constrction area badly and knocked down scaffoldings in there. The storm was an unforeseeable and unavoidable event that occurred which had not been discussed in the contract.

In fact, both of these supervening events which had taken place after the contract had been entered into, had not been reasonably contemplated by the parties at the time of entering into the contract and therefore might alter the foundation of the contract or render it physically or legally impossible to perform. It is such that the doctrine of frustration allows such events to nullify a contract.

Therefore, we must now look at whether the supervening events, which in this case are the severe storms which destroyed the scaffoldings and the construction area and the oil found under the foundations, were both so significant as to render the contract impossible to perform.

Davis Contractors Ltd v Fareham [1] is a case with a similar scenario in which the plaintiff agreed to build 78 houses in eight months at a fixed price. Due to bad weather, and labour shortages, the work took 22 months and cost £17,000 more than anticipated. The builders said that the weather and labour shortages, which were unforeseen, had frustrated the contract, and that they were entitled to recover £17,000 by way of a quantum meruit.

Ofcourse, in this case it was found that without the fault of either there had been an unexpected turn of events which had rendered the contract more onerous was not a ground for relieving the contractor of the obligation he had undertaken and the courts allowed him to recover on a quantum meruit. Taking this into account, the cases are quite similar when regarding the material facts; both having to do with a construction contract being unable to be accomplished due to events that were out of the control of both parties and hence delaying the completion and requiring a larger amount of money than agreed upon in the contract. As to whether this causes the contract to be frustrated, it is unlikely that the courts would agree so because the finding of oil and the storm did not change the actual objectives of the contract and does not make it impossible to accomplish those objectives. The costs of injury and damage will have to be paid by the contractor as per Section 5 of the contract.

However, if the alleged accusations of weak scaffoldings turn out to be accurate, Bish and Bosh could be liable to a claim in tort for negligence and a claim under contract for damages due to incompletion.

Breach of Duty – Damages for Non-Pecuniary Loss

The glass atrium constructed in the Foxhill Halls can be said to be fit to perform its functions satisfactorily.

If because of the breach in contract, in this case, the different color in the atrium, had a negative economical impact, or perhaps a loss that could be more than distress, it would be easier to claim damages for cost of reinstatement. But it is not the case here.

In the case of Farley v Skinner [2] , the plaintiff was being caused distress in his house due to airplane noises which the defendant had negligently claimed not to be as bad. In regard to this Lord Scott states,

“If the cause is no more than disappointment that the contractual obligation has been broken, damages are not recoverable even if the disappointment has led to a complete mental breakdown. But, if the cause of the inconvenience or discomfort is a sensory (sight, touch, hearing, smell et) experience, damages can, subject to the remoteness rules, be recovered.” [3] 

The Vice Chancellor describes the atrium glass as an “awful lime-green colour abomination” showing disgust at the sight of the color. Since this is a minor breach of the contract, the contract on the whole cannot be repudiated. Nevertheless the contractual defect could only be remedied by demolishing the work and starting again from scratch. The cost of doing this would be so great in proportion to any benefit it would confer on the owner that no reasonable owner would think of incurring it. [4] What is the measure of the loss which the owner has sustained in these circumstances? In the case of Ruxley Electronics & Construction Ltd v Forsyth [5] it was found that in situations such as these where the cost of reinstatement is quite inconsiderably high compared to the minor breach, an award of damages due to ‘loss of amenity’ is available for the plaintiffs, in this case the University of Reading. Also, since the University had spent time and money to pass the color scheme through the local council, this should be taken into consideration as well by the courts.

Misrepresentation – Architect

Building and civil engineering contracts are of such nature that it is pretty much impossible, especially where work is done on the ground, to design and construct a building so that the final product is identical to the original plans in every way. Changes to the original plans and details may come about for technical reasons or negligence by either parties involved or simply because the building owner desires a revision to the plans.

In our present case, the construction was going quite smoothly until a series of problems arose. One of them was the aforementioned foul-smelling oil discovered during the laying of foundation in the Foxhill Halls. Now, from a conversation recorded in the Whiteknights pub between Mr. Vernon from Bish & Bosh Ltd and Mr. Salmond from Theodolite, Sliderule and Guess Ltd shows us that the prescence of the oil was known to both parties. This conversation was recorded while a waitress was testing recording equipment for an upcoming event in the establishment. It clearly shows evidence in which Mr. Vernon asks about the oil, and Mr. Salmond replies, “Look Vernon, you and the Bish & Bosh guys need to relax, don’t worry about it…”

It is up to the court to decide whether this could constitute as a misrepresentation. Misrepresentation occurs when one of the parties in a contract makese a wrong statement about some material element of the contract and, relying on this statement, the other party enters into the contract.

The following are required elements for a successful action for negligent misrepresentation:

there must be a duty of care based on a ‘special relationship’ between the two parties

The representation must be untrue, inaccurate or misleading. The failure to divulge needed information is an equally misleading representation.

The representer must have acted negligently in making the representation.

the representee must have relied, in a reasonable manner, on the negligent misrepresentation; and the reliance must have been detrimental to the representee in the sense that damages resulted.

According to Gordon v Selico [6] it is possible to make a misrepresentation either by words or by conduct, but not everything that is said or done would constitute a misrepresentation. Generally, statements of opinion or intention are not statements of fact in the context of misrepresentation. [7] If one party claims specialist knowledge on the topic discussed, then it is more likely for the courts to hold a statement of opinion by that party as a statement of fact [8] .

Trusting upon these guidelines, we must conclude that there was a special relationship between Mr.Vernon and Mr.Salmond which would encourage Mr.Vernon to take his advice, which he did and hence suffered a loss due to delay of completion of construction and more work having to be done. Even so, the information divuldged by Mr. Salmond is unclear as to what it suggested, for a mere statement to “not worry” does not give enough credential to the statement. And also, the circumstance in which the conversation was held was not a formal avenue and it is of significant importance that Mr. Salmond was very much intoxicated. This was clear to Mr. Vernon as he remarks on it when he first starts the conversation by saying, ““Hi there Mr. Salmond, you look pretty drunk..” A reasonable person would not have trusted the words of an intoxicated man, and Mr. Vernon knowing very well that Mr. Salmond was intoxicated, had gone on to trust his words and continued with the construction.

Due to these reasons, it is very unlikely that Bish & Bosh would be able to hold Theodolite, Sliderule and Guess Ltd liable for misrepresentation. Most importantly, Under clause 2.3 of Section 2 of the contract between Bish & Bosh and the University, it states that,

“2.3 The architect shall issue any further information necessary for the proper carrying out of the Works, issue all certificates and confirm all instructions in writing in accordance with these Conditions.

According to this clause, what Mr. Salmond said in the conversation cannot be held as a representation of facts since the information was not delivered to him in the formal manner required as per the contract.

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