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Rule for Judging Specific Standard of Care

Info: 5437 words (22 pages) Essay
Published: 7th Aug 2019

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Jurisdiction / Tag(s): UK Law

The first thing I would advise yourself is the on the terminology, an express term is a term that is clearly expressed in the contract; there is no hidden intention or ambiguous nature about the term due to it being “expressed”. An “implied term” is one that is deemed to be understood by both parties. Without implied terms the contract would be unmanageable and progress would be extremely hard to achieve due to every single term being expressed.

Within your case the term “must use all care and skill (like a professional designer)” is expressed to C, as the external wall disintegrated, this clause becomes active. The work C undertook and completed was described as the “Contractors Designed Portion Work” so they are also liable for the “design” of the work along with the actual construction of the walls.

In Bolam v Friern Hospital Management Committee [1957] 2 All ER 118 it highlights that there is a rule for judging a specific standard of reasonable care when negligence occurs involving a party of professionals (i.e. your circumstances). Although the case is a medical case I feel the principle is relevant here. The judge (McNair J) ruled that.

“I myself would prefer to put it this way, that he is not guilty of negligence if he has acted in accordance with a practice accepted as proper by a responsible body of medical men skilled in that particular art. I do not think there is much difference in sense. It is just a different way of expressing the same thought. Putting it the other way round, a man is not negligent, if he is acting in accordance with such a practice, merely because there is a body of opinion who would take a contrary view. At the same time, that does not mean that a medical man can obstinately and pig-headedly carry on with some old technique if it has been proved to be contrary to what is really substantially the whole of informed medical opinion”. [1]

From this I gather, if C has designed and completed the design and met all the set criteria set out in the constructions laws and the wall has still collapsed then according to Bolam v Friern Hospital Management Committee [1957] 2 All ER 118 they would be found not guilty. But there are more elements of the equation to be discussed.

One of these is the reliance you had placed upon C; you relied on C to provide you with the design and the construction of the walls. This design and the construction must be “fit for purpose” under the “Contractor Design Proportion” this is an implied warranty, for example if you buy a kettle, there would be an implied warranty that it will boil water, hence – fit for its purpose. This idea is more appropriately explained in the case of Viking Grain Storage v TH White Installations [1985] 33 BLR 103, were it was held that the Contractor was liable for the items they had installed, mainly the fitness for purpose of the installed items. The case also highlighted the fact that if the product has been found not fit for its purpose, you would not need evidence to support this negligence.

If C decides and say that the design portion of the work was sub contracted out then it is important to seek the decision of Moresk Cleaners Ltd v Hicks [1966] 2 Lloyd’s rep. 338; 4 B.L.R were a defect arose from the decision of the architect to omit a part of the design, it was held that the Contractor could not deny liability due to architects mistake, unless they had gained permission from the Employer. So if C has not contacted you stating the architect has made alterations or changed the design then C is still liable. The JCT 2005 also covers this issue of the contractor attempting to delegate responsibility. This assumption is based on you and the contractor using a standard form of contract under clause 2.19.1, where if the Contractor in your case (C) has not acted in the way an architect would, negligence would not needed to be proven by yourself as they would be liable as they have breached the contract.

If C decided to blame the materials they used, in an attempt to try and move the blame to another party in the contract then it is important to look at Young & Martin Ltd v McManus Childs Ltd [1969]1 AC 454, [1968] 2 All ER 1169 HL. The Viking case further established the decision set out in Young & Martin Ltd v McManus Childs Ltd [1969]1 AC 454, [1968] 2 All ER 1169 HL, which highlighted the fact that if C used inadequate materials that were not fit for their purpose, again they would be found liable for breach, and you would not have to prove that they have been negligent.

In summary I feel you would be better to claim that the work completed by C was not fit for its purpose. Due to the work of C being undertaken being described as “contractors design proportion” they are responsible for the construction and the design element. So regardless of what C decide to blame to failure of the wall on, they are liable for the loss you have suffered.

Question 4

My advice for E is explain all three claims separately on their own merits, and ultimately decided whether C has a case for arguing against E.

The most appropriate cases for getting a sense of authority on the first claim are Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79, 83 LJKB 1574, [1914-15] All ER Rep 739, Alfred McAlpine Capital Projects Ltd v Tilebox Ltd, [2005] BLR 271, [2005] All ER (D) 396 (Feb) and Jeancharm Ltd International v Barnet Football Club Ltd92 ConLR 26, [2003] All ER (D) 69 (Jan).

The case of Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79, 83 LJKB 1574, [1914-15] All ER Rep 739 sets out the rules for checking if a claim for liquidated damages will be successful or if it will be rejected. The area of liquidated damages can cross boundaries and sometimes be seen or confused with the area of penalties. In Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79, 83 LJKB 1574, [1914-15] All ER Rep 739, Lord Dunedin set out the principles for establishing the difference between if a claim is liquidated damages or if it is a penalty.

A penalty is a form of a threat, to stop a party considering breaching a contract that they have entered into, the Dunlop v New Garage case also established that liquidated damages will be rejected only if the damages are deemed to be a penalty. It must be noted that a penalty can only be deemed a penalty when the breach consists of non payment and that if the pre-agreed or “stipulated” liquidated damages amount is more than the amount due. This pre-agreed (stipulated) amount must not be “extravagant and unconscionable” in relation to the maximum amount estimated from the breach of a party as decided in the Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79, 83 LJKB 1574, [1914-15] All ER Rep 739 case this again is a penalty, not liquidated damages.

Another case to look at is Alfred McAlpine Capital Projects Ltd v Tilebox Ltd, [2005] BLR 271, [2005] All ER (D) 396 (Feb), the Judge in the case held that to calculate the damages it must be done in an “objective” way, so it must be an estimate based on facts and not merely a wild guess aimed at gaining more money than actually owed from the damaged caused by a breach. The claim for liquidated damages must be deemed to be reasonable, this is shown in Jeancharm Ltd International v Barnet Football Club Ltd92 ConLR 26, [2003] All ER (D) 69 (Jan) where the innocent party in the breached contract tried to claim interest of “260%”, this was thrown out as it was nowhere near the sum agreed in the contract.

From the main principles I have gathered from the cases above I would advise you that C will have a strong case against that the £750,000, is excessive and has no relationship to your actual loss.

In regards to the second claim, the main case to look at is Clydebank Engineering and Shipbuilding Co Ltd v Don Jose Ramos Yzquierdo y Castaneda [1905] AC 6, 74 LJPC 1, [1904-7] All ER Rep 251, the judge stated that he could not define a statement that would clarify whether a sum is “extravagant or unconscionable” , every case must be looked at individually and establish the particular case facts and the circumstances that surrounded it. The main purpose of why a pre agreed or stipulated sum is made in the first place is to save time and costs trying to establish the damages, if a breach is made.

In Clydebank Engineering and Shipbuilding Co Ltd v Don Jose Ramos Yzquierdo y Castaneda [1905] AC 6, 74 LJPC 1, [1904-7] All ER Rep 251,the circumstances in the case are similar to that in the second claim, the contractor denying liability due to circumstances out of their hands. C is arguing that due to the recession the properties would not be let or sold anyway, and they also deny any liabilities for their delay in completion. In the Clydebank v Don Jose case it was held that the contractors claim was rejected, as it doesn’t matter when the breach of contract has occurred as the amount of liquidated damages is stipulated upon agreement of the contract. This was highlighted in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79, 83 LJKB 1574, [1914-15] All ER Rep 739.

The fact there is a recession when C breaches the contract does not factor in the decision when ruling on the argument, as the terms of the contract including the stipulated sum of liquidated damages stands from when the contract is formed. So I would say that this second argument would also be dismissed.

The Third and final claim centres around the administrative procedure, C claims that yourself and A have not followed the correct procedures. As you have basically withheld payment, I will advise you as to what the procedure is then advise you as to whether or not C has an argument.

The Architect will issue a certificate of non-completion which will state how long the delay has been, yourself would then have to formally contact the contractor in writing stating you require payment, this must be done 5 days before the Final Certificate would be due. If you decided to withhold payment or deduct liquidated damages from their sum must comply with rules stated in the Construction Act of 1996.

If for any reason you had granted an extension to the date of completion to C, this will reduce the amount of days that C can be held accountable for the delay in the completion of their works, the new date for completion replaces the date that the non-completion certificate was sent. Obviously if no extension to the completion date was granted this issue will not arise, if it did it is important to know that for you to be able to claim liquidated damages, the architect must issue a new certificate of non-completion, without this you have no claim.

In summary, I would advise you that C’s first claim will have a case to argue against the amount of liquidated damages as the amount I feel would be deemed to be excessive and have no relationship to your actual loss, this is based on certain assumptions due to not have all of the facts and circumstances, the second argument they have I feel will be dismissed as the precedent set in Clydebank Engineering and Shipbuilding Co Ltd v Don Jose Ramos Yzquierdo y Castaneda [1905] AC 6, 74 LJPC 1, [1904-7] All ER Rep 251, is practically the same situation as you found yourself in, and in that case it was found the contractor had no argument. In regards to the final argument put forward, as long as you have followed the guidelines I have advised you with, based on previous decisions in the cases shown, I feel C’s argument will be dismissed.

Question 5

As you know SC Piling’s work was found to be defective, four weeks after it had been theoretically completed. The contractor applied for an “extension of time”, A the architect refuses to grant an extension of time, and E withholds £3.3m from the contractor (C) through liquidated damages.

I would advise you (C) to understand the four principles of applying for an Extension of Time, Ndekugri and Rycroft (2009) highlighted these principles in, The JCT 05 Standard Building Contract: Law and Administration. Firstly, the contractor is obliged to complete what they stated by the pre agreed date, if the employer has any bearing whether slight or wholly on the delay, it changes the time, the contractor is now obliged to complete the work within a “reasonable time”. This is known as the completion date being “at large”. If the Contractor has included a term where they “expressly agree” to completing on the original date, they can be held to this by the employer.

Secondly, where the employer is completely at fault for the delay, they can only claim for liquidated damages, if they have included a clause which covered the circumstances of the delay. It is important to look at Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 69 LGR 1, 1 BLR 111 CA, this highlights the dangers of not including a clause concerning the extension of time

Thirdly, the principle of even when there is a clause covering the extension of time, if it has not been included in accordance with the contract, this date of completion can become “at large”.

Fourthly and finally, when the date for completion becomes “at large”, a claim for liquidated damages is void. If the contractor uses this “at large” date of completion then they are due to complete within a reasonable amount of time. The Employer can only now claim for “unliquidated” damages.

From the four principles I feel the second principle is the most relevant to your case. I would also highlight the case Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 69 LGR 1, 1 BLR 111 CA, there are two main issues within this case that I feel are linked to your circumstances. Firstly it decides if the Employer is responsible for the delay in anyway, if the employer is responsible for the date of completion not being achieved then no form of liquidated damages can be claimed. In the case, a subcontractor installed piles, once “technically” completed they were later found to be defective, the project was halted until an experts advice, explaining what the problems where, had been sought. It was held there was a delay in appointing this expert to produce a report; it was found the Employer was at fault. I would also highlight the case of Rapid Building Group Ltd v Ealing Family Association Ltd [1984]29 BLR 5, in which the party claiming damages must specify whether it is “liquidated” or “unliquidated” damages, they cannot just claim damages and accept anything that is decided. The burden of proof is need from the Employer, but if they claim liquidated and fail they can counter claim with a request for unliquidated.

Again in the Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 69 LGR 1, 1 BLR 111 CA case it took 6 weeks (the same as your circumstances) for the remedial works to correct the defective piling. But the Employer claimed 58 weeks, similar to E claiming 44 weeks. It was found that is was unreasonable for the full 58 weeks to be held as the delay. Along with this the amount of blame that is attributable to E for the delay is to be confirmed.

The other element of the Peak Case is questioning whether or not the Architect had the authority to grant an extension of time. In Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 69 LGR 1, 1 BLR 111 CA, a clause was included which stated the architect could include an extension of time when “unavoidable circumstances” had caused the delay. The fact an extension of time has been granted is to allow the Employer, in your case E, to still claim liquidated damages even when they are involved in causing the delay. If this clause is not included in the terms and conditions of the contract then the employer is unable to claim liquidated damages.

Again the similarities your situation and that of the defendant in Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 69 LGR 1, 1 BLR 111 CA are very similar, in your situation E and A delayed while obtaining expert advice, in the Peak case the employer also delayed in getting their expert advice. The Defendant was held not liable for the liquidated damages.

In summary, the Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 69 LGR 1, 1 BLR 111 CA is the main case for me to give you advice from, due to the delay by E in getting expert advice before instructing the remedial works, also the architect didn’t have the authority to judge whether a Extension of Time could be granted as E had delayed in gaining expert advice, so the circumstances where not “unavoidable”. So I would advise you to claim damages from E for withholding monies from you, and that you were only bound to complete the works within “reasonable time”.

Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd [2001] 1 All ER (Comm) 1041, 73 ConLR 135


Case Facts

Bouygues were the main contractor for a project at a College and Dahl were the mechanical sub-contractor employed by them.

Any disputes that arose would be settled through a process of adjudication

A dispute arose and Dahl left the site, both the parties issued their intention to begin the adjudication process, it was set that Bouygues claim was a counter claim to Dahl’s claim

Dahl – Jensen went into liquidation, the chair of the adjudication process mistakenly included money, that was only due to be released once certificates of completion had been exchanged, into the award of the adjudication decision.

The adjudicator refused to review the award, so Dahl sought an action for summary judgement.

Bouygues said that the adjudicator had gone beyond their powers and the decision was unenforceable

The Summary judgement was made with the judge stating that the adjudicator hadn’t exceeded their power, merely answered the question wrong, and that the Adjudicator’s decision stood.

Bouygues continued their appeal stating the adjudicator decided on something outside of their position. But it was Held that this appeal would be dismissed.

The Issues to be decided

Can the adjudicator be over ruled?

Why was B’s appeal dismissed?

What is the standing for a liquidated company?

Legal Principles

The case highlights what the adjudication process is for and highlights its strength and weaknesses; it shows that the adjudication process was to provide the parties with a fast resolution to solve any issues that arose.

If the adjudicator has answered what he/she has been asked and that the question falls within his/her limitations then any court will stand by the decision

In a normal and clear cut case, for the adjudication award to hold authority it needs to be enforced by a summary judgement, but in this case other elements such as counter claims were involved and the fact that Dahl had gone into liquidation.

In Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd [2001] 1 All ER (Comm) 1041, 73 ConLR 135, Dahl went into liquidation which involved bringing the Insolvency Rules 1986 Act into the equation, once this is involved the need for the Summary judgement no longer applies


It was Held that the appeal would be dismissed in this circumstance. It must be noted that if the Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd [2001] 1 All ER (Comm) 1041, 73 ConLR 135 case was a simple case between two disputing parties with no other elements affecting them except a disagreement, Bouygues would have likely won their claim and got the money paid by mistake back, as the gain to Dahl was unjust

Related Subsequent Cases

Able Construction (UK) Ltd v Forest Property Development Ltd, [2009] All ER (D) 176 (Feb)

Highlights that if a party is using delaying tactics for the avoidance of paying monies owed that the courts will simply throw any defence they have out.

A Dispute was put forward to an Adjudicator which resolved the issues, Forest was due to pay Able and Able would not seek legal action to enforce this decision set by the adjudicator, the payments were to be made in instalments.

Forest defaulted on the payments, but due to Forest saying if they made the payments and Able not seek to enforce the Adjudicators decision, it seemed that no dispute even existed.

Able sought legal advice to enforce the award, at the hearing Forest did not turn up, the court proceeded regardless and it was held that Forest showed no defence as to why they failed the payments and the adjudication award was now enforced and Forest had the interest to pay also.

Related Previous Cases

Jones v Sherwood Computer Services PLC [1992] 2 All ER 170.

Between the two parties there was an agreement regarding the transfer of shares, the agreement stated if any issues arose the problems would be resolved by the process of appointing a 3rd party, independent “expert” in accounting and it was noted that this was not an adjudication process, but that the decision was to be binding and final.

The independent “expert” came to the same decision as Sherwood’s accountant, but didn’t show how they came to the figure

Jones sought to see if the independent “expert” had made a mistake, and if so Jones would not be bound by what the 3rd party decided.

It was held that this appeal would be thrown out as the 3rd party completed what was asked for them to do, therefore Jones were still bound by the agreement

Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79, 83 LJKB 1574, [1914-15] All ER Rep 739



Case Facts

The House of Lords in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79, 83 LJKB 1574, [1914-15] All ER Rep 739 reversed what had been decided in Court of Appeal

Dunlop supplied tyres to New Garage at a discount, with the condition that New Garage does not alter a specific marking on the tyre.

Other restrictions included were that New Garage were not to supply their customers with the Tyres for less than the RRP set by Dunlop and anybody who Dunlop had previously stopped supplying

They also stated they would pay £5.00 in liquidated damages NOT £5.00 as a penalty every time they sell a tyre that breaches the terms issued by Dunlop

When an issue arose and Dunlop issued a breach of contract against New Garage it was found that Dunlop, to stop being undercut by their own customers, made similar agreements with all their trade partners

The Issues to be decided

The main issue in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79, 83 LJKB 1574, [1914-15] All ER Rep 739 is whether the clause made between Dunlop Tyres and New Garage was a penalty and if this “penalty” was enforceable or the opposite enforceable.

Legal Principles

The main principles set out in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79, 83 LJKB 1574, [1914-15] All ER Rep 739 where that :

If parties use “penalty” or “liquidated damages” as a result of a “punishment” for a breach it doesn’t matter as the court reconsiders the term under the specific time and circumstances of when the contract was formed.


It was held that the liquidated damages to the sum of £5.00 per tyre sold through breach, was Liquidated damages and not a penalty.

Related Subsequent Cases

BNP Paribas v Wockhardt EU Operations (Swiss) [2009] All ER (D) 76 (Dec)

Main issue surrounded whether an early termination in a Master Agreement would amount to a penalty.

Wockhardt missed payments; this activated a clause which allowed the termination of the Master Agreement and the amount that Wockhardt would have to pay for the early termination.

Wockhardt argued that the early termination did not incorporate a reasonable amount for the breach and how much this would cost BNP Paribas.

Wockhardt could not establish whether the early termination was a penalty or not so this could not be used as its defence. The case still continues through repeated appeals.

Related Previous Cases

Kemble v Farren [1824-34] All ER Rep 641

An actor and their manager where bound by contract which stated any breach by either party would result in the one party paying the other £1000 in liquidated damages, NOT as a penalty payment.

After reading through the terms of the contract the court found that the agreed amount of £1000 might come into force for a minor breach.

It was held that the sum was a penalty and not liquidated damages.

Shanklin Pier v. Detel Products [1951] 2KB 854; 2 All ER 471


Case Facts

Owners of the pier asked a paint manufacturing company for their advice on which paint to tell their Contractor use for repainting the pier

The owners used a certain paint recommended by Detel products

The paint manufacturers said it would last 7 years but in fact it started to peel after a few months

The Pier owners suffered a loss as a result of the Paint Companies advice

This was complicated by the fact that

The Issues to be decided

Is the representation stating the time the paint will last a warranty?

Seeing as there is not any direct contract between the two companies, i.e. Shanklin and Detel.

The contracts are with, Shanklin and The Contractor they hired to paint

And between The Contractor and Detel Products whose paint they are using.

Legal Principles

In the case of Shanklin Pier v Detel Products [1951] 2KB 854; 2 All ER 471 it asks whether a representation (Detel saying the paint will last 7 years) can become an enforceable warranty between two parties, other than the two who make up the main contract

The judge (McNair J) ruling the case stated that “I am satisfied that, if a direct contract of purchase and sale of [the paint] had then been made between the plaintiffs and the defendants, the correct conclusion on the facts would have been that the defendants gave to the plaintiffs the warranties substantially in the form alleged in the statement of claim….

…. the consideration for the warranty in the usual case is the entering into of the main contract in relation to which the warranty is given, I see no reason why there may not be an enforceable warranty between A and B supported by the consideration that B should cause C to enter into a contract with A or that B should do some other act for the benefit of A.” [5]


Held – that the representation from Detel Products was a warranty.

A warranty is made when consideration is shown, In Shanklin Pier v Detel Products [1951] 2KB 854; 2 All ER 471 this consideration caused the Painting Contractor to form a contract with Detel.

The representation that the paint would last 7 years became a warranty through the consideration shown, the consideration was the reason the contract was formed so it became a contractual warranty and therefore enforceable.

Detel Products were liable for damages because of their contractual breach

Related Subsequent Cases

Fuji Seal Europe Ltd v Catalytic Combustion Corpn [2005] EWHC 1659 (TCC), 102 ConLR 47, [2005] All ER (D) 84

The case centred on the supply of a specific chemical that would suppress the amount of pollution made by a factory.

In the Shanklin Pier v Detel Products [1951] 2KB 854; 2 All ER 471 case the judge ruling found a collateral warranty, in Fuji Seal Europe Ltd v Catalytic Combustion Corpn [2005] EWHC 1659 (TCC), 102 ConLR 47, [2005] All ER (D) 84 they did not find a collateral warranty as the judged deemed the parties had enough knowledge and both were well advised companies.

No breach in contract but it was ruled that there was a breach in the duty of care in regards to advice

Related Previous Cases

Brown v Sheen and Richmond Car Sales Ltd [1950] 1 All ER 1102, [1950] WN 316

Brown used the representation made by a car dealer that a car was in perfect condition to enter into a hire to purchase agreement. He made all the payments and the car became his property, the car not in perfect condition and it needed repairs. Brown sued for damages through breach of warranty

It was judged that Sheen and Richmond Car Sales gave a warranty, saying the car was in perfect condition, which induced Brown into entering the hire to purchase deal, the warranty was broken and therefore Sheen and Richmond car sales were liable for damages suffered by Brown.

Woolworths plc v Henry Boot Management Ltd [2003] EWHC 1988 (TCC), [2003] All ER (D) 41


Case Facts

Claimant was the tenant of a building which was to undergo redevelopment.

Defendant one was the management contractor for the redevelopment

Defendant two decided to relocate within the building and changed their lease accordingly

The Claimant wanted to carry on with business as usual whilst the building works were carried out

The claimant then had two warranty agreements running side by side

Between the claimant and defendant one – the defendant one stated they would cover any claim against repairing damaged caused by the building works

The claimant then proceeded with the building works, which included laying the floor; the glue used to lay the floor had a bad reputation when exposed to water.

The flooring became faulty and water was found to be the problem, the water could be traced to the shops next door

The claim is put forward to both defendant one and defendant two claiming damages that were caused by negligence.

The claim against defendant two (who decided to relocate within the building to another shop whilst the work commenced) was dropped. The claimants decided to continue against defendant one, stating that they should have prevented to water problem. Defendant one denied this.

The Issues to be decided

How was defendant one responsible?

Is there a relationship between the parties of sufficient proximity

Where was the water originally coming from, the source of the water may be nothing to do with Defendant one, as stated there were several possible sources?

Legal Principles

The duty of care – What where its limitations that ar

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