Case Studies

Question 1

Young & Marten Ltd v McManus Childs Ltd (1969)

Answer 1

Contractors obligations: To do work with proper care and skill. A party supplying materials must make sure they are of good quality and fit for purpose

Question 2

Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd [1976]

Answer 2

Materials are only the property of the client when incorporated into the building

Question 3

London Borough of Merton v Stanley Hugh Leach Ltd (1985)

Answer 3

Clients must cooperate with contractor and facilitate contractors completion

Question 4

Glenlion Construction Ltd v Guinness Trust (1987)

Answer 4

While clients must cooperate with contractor, cooperation only needs to be sufficient to make contract workable

Question 5

Hadley v Baxendale (1854)

Answer 5

Remedies for breach: Assessment of damages- determine damages from a breach of contract
Losses must be foreseeable
“An injured party may recover those damages reasonably
considered to arise naturally from a breach of contract,
or those damages within the reasonable contemplation of
the parties at the time of contracting”

Question 6

British Westinghouse v Underground Railings Co (1912)

Answer 6

Remedies for breach: Mitigation of loss
Damages for breach of contract were to place the injured party so far as possible in the position they would have been had the contract been performed. Any additional profits made because of acts done in mitigation should be considered when quantifying damages.

Question 7

Main Roads v Reed & Stuart Pty Ltd (1974)

Answer 7

PM design duties- work in contract bills must not be omitted and given to other contractors

Question 8

Amec Building Ltd v Cadmus Investment Co Ltd (1996)

Answer 8

PM design duties- work which is subject of a provisional sum may not be omitted in order to give to others to carry out

Question 9

Costain Ltd v Bechtel Ltd [2005]

Answer 9

Obligation for a PM to act fairly between client and contractor. NEC contract

Question 10

Sutcliffe v Thackrah (1974)-

Answer 10

Obligation for a PM to act fairly between client and contractor. JCT Contract. Similar to Costain V Bechtel

Question 11

Token Construction V Charlton Estates (1973)

Answer 11

Definition of certification
Definite expression of professional judgement by an entity

Question 12

Pacific v Baxter (1990)

Answer 12

PM owes duty of care to client and contractor

Question 13

Trafalgar House Construction (Regions) Ltd v General Surety & Guarantee Co Ltd (1995)

Answer 13

Conditional Bond vs Guarantee- the importance of considering all the obligations
For a conditional bond claim to be successful need proof of:
o The contractor is in breach of contract.
o The employer has suffered net loss as a result of that breach, which it needs to prove and evidence that it has sustained.

Question 14

Balfour Beatty Civil Engineering v Technical & General Guarantee Co Ltd (2000)

Answer 14

For an on-demand bond unless there is clear evidence of fraud payment must be made
Importance of good wording in performance bond policy- if you want insolvency covered need to say it clearly

Question 15

Try Build Ltd v Blue Star Garages Ltd (1999)

Answer 15

-Function of a guarantee
-Requirements for enforcing a guarantee, prove cause of damage and whose responsibility

Question 16

Petrofina (UK) Ltd v Magnaload Ltd

Answer 16

Loss insurance more effective if insurer’s right of subrogation is waived or a joint names policy is taken out
“a head contractor ought to be able to insure the entire contract works in his own name and the name of all his sub-contractors”

Question 17

Perar BV v General Surety & Guarantee Co Ltd (1994)

Answer 17

Conditional bond in place
* Contractor went into administration
* Court said default meant breach, and insolvency did not constitute default
* Therefore the bond did not cover the circumstances of this case

Question 18

Justice Jackson in AMEC Civil Engineering V Secretary of State for Transport [2004]

Answer 18

Used as the definition for dispute

The contractors denied that there had been a dispute, and appealed a decision that the case had a right to be heard at court. This was held

The mere fact that one party notifies the other of a claim does not automatically and immediately give rise to dispute. A dispute does not arise until it emerges that the claim is not admitted

Question 19

Dunnet V Railtrack (2002

Answer 19

The court deprived the successful party of their costs because they rejected offers to mediate

Courts are encouraging parties to seek Alternative Dispute Resolution (ADR)

Question 20

Halsey V Milton Keynes NHS Trust (2004)

Answer 20

a refusal to mediate must be unreasonable in order to attract a costs sanction