Legal Issues And Remedies In The Case Of Quash Quell Construction Limited: An Essay.

Construction Law and Breach of Contract

Discuss about the Quash Quell Construction Limited.

This study will benefit immensely from three main legal concerns that have been identified from the facts given. It is instructive to note that the first legal issue that will be discussed is construction law in relation to the law of contract. This legal issue affects Quash quell Construction Limited (QQ) and Retro Salvagers Ltd (RSL) because they had a contract whose subject matter was construction and in particular a contract to deal with refurbishment of a dilapidated building. The second legal issue that has been identified is in relation to the law of tort and it is Negligence as a civil wrong. This will be demonstrated by the relationship between Dapar Heating Systems Ltd. and Quash quell Construction Limited (QQ) where the former was expected to conduct a service with great skill and care but there is a probability that he did so negligently. The last legal issue will be misrepresentation which is manifested by the fact that Dapar Heating Systems Ltd made statements before the contract was made that appear to have induced Quash quell Construction Limited to enter into a contract.

In contract law the cardinal principal is that parties to the agreement have the moral imperative to perform their contractual obligations as has been stipulated by terms in the contract. It follows that failure to meet the contractual obligations amount to a breach in contract law and liability fro the payment of damages. It bears noting that breach of the contract terms that have been stipulated in the agreement attracts loathsome consequences as was demonstrated in the case of Jerry Bennett Masonry, Inc. v. Crossland Constr.Co.[1] Where a subcontractor company entered into a legal agreement with the contractor which expressly interdicted any delay. Unfortunately the subcontractor company breached the agreement and the court ordered the payment of hefty delay damages.

Quashquell Construction Limited (QQ) contracted Retro Salvagers Ltd (RSL) to conduct the refurbishments of their newly acquired offices and they therefore were notified of all the areas that need refurbishment and were able to foresee  the duration and amount of time that would be involved to complete the work timeously. It is thus imperative to note that the delay that occurred in this case is regarded as an inexcusable delay in construction law which is a delay that has been caused by a contractor due to his negligence and the other party will be entitled to make a claim for damages.[2]

Delay in Construction Law

Quashquell Construction Limited has a contractual obligation to conduct the refurbishments within the rules that have been set in the contract. It is overarching principle in law that the once a contract has been signed the parties are bound by the terms in the agreement although one may have failed to read or comprehend the terms.[3] The court have since held that incase a delay may occur in to the construction the contractor is supposed to give a reasonable notice to the other party.[4] It is worth noting that Quashquell Construction Limited has not served the Retro Salvagers Ltd any notice indicating that they may be delaying in completing the work as stipulated in the contract.  

In Australian Development Corporation (ADC) v White Constructions[5] the court held that the contractors must give the principal a notice requesting for the extension of time which enables the principal to make other less costly arrangements and to bargain with the contractor on the extra costs that may be incurred. Retro Salvagers Ltd did not indicate that they an extension of time so that they can be able to complete the contracted work. Due to absence of the notice the probability for the contractors to be liable is even growing higher. It can also be noted that DHS did not submit any notice to indicate that they will be delaying in the construction of the heating system and thus the penalty that was stipulated in a clause will be imposed.

It bears noting that Quashquell Construction Limited will be entitled to liquidated damages if in the contract they included a liquidated damages clause that shows the amount of money that will be payable incase of any delay.[6] It is prudent to note that the liquidated damages clause will be Quashquell Construction Limited in the sense that they will not have the onerous task of calculating damages as they are expressly stated in the clause.[7] However, where the contract does not have a liquidated damage clause the, the aggrieved party will still be entitled to liquidated damages incase of any breach. In this case it is evident that the contract provided for liquidated damages clause that stated that there will be a 4.5 percent deduction from the contract price each day that the contractor delays. The costs that have been incurred in renting another premise because of the delay in completion of the refurbishments will be paid from the penalties that have been imposed in the contract. It can be argued seeking liquidated damages again despite the presence of a liquidated damages clause is tantamount to subjecting the party in breach to double jeopardy.

Liquidated Damages Clause

It has been held in South Carolina Federal Savings Bank v. Thornton-Crosby[8] that if the principal looses profit that he will have gained were it not for the delay he may recover the profits inform of damages if he  reasonably evinces the exact amount of profit lost. Quashquell Construction Limited can thus prove that within the days that the construction had delay they suffered a considerable loss of expected income because their business was not in operation. The use of mobile heating devices leads to Quashquell Construction Limited to incurring an extra expense. However this was covered in the liquidated damage clause that stipulated that DHS will pay an amount of money incase of any delay.

 The other remedy has been established by the courts in the case of Fibrosa Spolka Akcyjna v Fairburn Lawson Combe Barbour Ltd[9] is restitution of any funds that had been paid prior to the performance of the contract. In this case it will not be possible for Quashquell Construction Limited to recover any funds that they may have paid because they have stipulated in the contract through the liquidation clause a way that the contractor will compensate for the loss incurred due to the delay. The aggrieved party may also be awarded consequential damages which derive from any other cause that the parties had contemplated when they were making the contract. Quashquell Construction Limited can recover damages for the loss of profits following the delay in installing the heating system because such an outcome was not envisaged in the terms of the contract.

From the facts it is abundantly clear that Dapar Heating Systems Ltd gave a representation to the effect that the system was functionally sound and it had been tried and tested. The company also assured that the heating system was energy efficient albeit the same was not envisaged in the contract. The possible legal issue that can arise in this case is misrepresentation.

A misrepresentation is an untrue statement that induces the other party to enter into contract which has the effects of vitiating the contract. It is thus submitted that for a misrepresentation to be actionable there are various elements that must be met for the action to be successful. Firstly, one of the parties must have made a false assertion of fact. It has been held that if a statement is substantially correct then it does not amount to an untrue statement.[10] It is worth noting that the statement must be a clear untrue statement that does not bring about any ambiguity.[11] The statement that was made by the Dapar Heating Systems Ltd was clearly false as was later evidenced by the tragedy that occurred.

Misrepresentation

Secondly, the misrepresentation must be made by a party to the contract or an agent representing the party to the contract. Thirdly, the other party must rely on the untrue statement to the effect that the untrue statement will influence his or her judgment to enter into the contract. However, a misrepresentation will not be actionable if it did not affect the judgment of the other party expected to sign the contract.[12] Quash quell Construction Limited (QQ) relied on the statement that had been made to enter the contract. Were it not for the assurance in the statement made then Quash quell Construction Limited would not have signed the agreement. In essence the statements made affected fundamentally affected the judgment of Quash quell Construction Limited.

Dapar Heating Systems Ltd (DHS) has the professional responsibility of ensuring that they conduct their work with skill and care to prevent harm to anyone who is likely to be affected by the nature of their work. In the much celebrated ruling of Lord Artkin he notes that one should always have their neighbor in contemplation and ensure that their acts and omission do not cause harm to them.[13]   Lord Artkin defined a neighbor in the Donoghue case as any person who is likely to be suffer injuries due to harm that has been perpetrated by ones acts or omissions.  Any person who has been visited by harm or an injury must show that they are a neighbor within the meaning of the definition given by Lord Artkin

Stemming from the fact that Dapar Heating Systems Ltd has did not install the heating system well and it cause injury to Sally, Sean and Amy it is submitted that he will may be  charged with the tort of Negligence. There are three essential elements that must be satisfied for one to successfully prove a claim of negligence.[14] It is prudent that the defendant must have owed the plaintiff a duty of care and the defendant breached that duty. Additionally, as a result of the breach it must be evinced that harm or loss has been suffered has been suffered.

It is imperative to note that the definition of the duty of care has since been made capacious and it includes instances where one relies on the information given and the information is given negligently and leads to harm to the other parties.[15] In this case it is abundantly clear that Dapar Heating Systems Ltd has convinced Quashquell Construction Limited that the heating system is in good condition and that it is energy efficient. Quashquell Construction Limited relied on this information and it over the long haul caused harm to Sally, Sean and Amy.

Remedies in Case of Breach of Contract and Misrepresentation

Dapar Heating Systems Ltd owes a duty of care to any person working Quashquell Construction Limited premises beaus ether act are likely to affect them. It can thus be conceded that they owe Sally, Sean and Amy a duty of care. The duty of care includes the duty to perform their work with standard and ordinary skill and care that a reasonable person doing the same task would have done.[16]

The courts in Caparo Industries v Dickman[17] came up with a test for determining whether one owes another a duty of care. The court stated that the harm and injury that has been suffered should be one that was foreseeable.[18] Dapar Heating Systems Ltd was reckless yet the harm that the heating system brought to Sally, Sean and Amy was to all intents and purposes foreseeable. A legal relationship showing the proximity between the harm that has been suffered and the negligent act must be established.[19] It is not in doubt that there is a relationship of proximity between Dapar Heating Systems Ltd and the persons who work in Quashquell Construction Limited including Sally, Sean and Amy they are direct beneficiaries of the heating system. In the end the court s will ask if it is just and fair to impose a duty of care on the party alleged to be negligent.[20] It can be conceded that it is not only just and fair but it is also reasonable and practicable to impose a legal duty of care on Dapar Heating Systems Ltd.

In Roe v Minister of Health[21] the court affirmed that for a negligence claim to be successful the standards of skill that has been manifested by the defendant must be below the ordinary skill that is expected. In determining the breach of duty of care the courts look at the probability of the harm occurring.[22] It is thus submitted that there was a high probability of the risk occurring if the installations done by Dapar Heating Systems Ltd were not done with the required standard of skill. The ordinary skill can be manifested by the fact that an independent expert was employed to conduct an assessment on the installation. This was an ordinarily skilled person of the same work qualification as the Dapar Heating Systems Ltd.   The court will also consider the degree of harm that has been suffered and the harm suffered is overly minute then the claim will be banished upon arrival and it will not see the light of day.[23] The harm that has been suffered by Sally, Sean and Amy is so material that the acts and omissions of Dapar Heating Systems Ltd will undoubtedly amount to a breach of the duty of care. 

The courts will also determine if the defendant had the opportunity to take any measures that would prevent the harm from occurring.[24]  Indeed Dapar Heating Systems Ltd will have to show if they had taken any reasonable steps to prevent any accident that may have a deleterious impact. If the court discovers that they did not take any preventive and protective measures they will be held to be in breach of their duty of care. It gives added relevance to state that the courts will also seek to determine if the acts or omissions of the defendant were pursuant to a social purpose. The acts and omissions cannot be defined as being informed by a social suspect.

The plaintiff in a negligence claim has to show that the defendant had breached their duty of care they owe them. However, if the facts of the case are too obvious and clearly show that the defendant was in breach the courts will apply the legal maxim of res ipsor loquitor.[25]

The general rule in the law of tort is that the claimant must evince that they suffered harm, injury or loss as a result of the breach perpetrated by the defendant. The court in this case will apply the ‘But for Test’ and will ask whether the harm would have occurred anyway even of the defendant did not breach their duty.[26] Amy fell down on the slippery floor and injured her uncle. Dapar Heating Systems Ltd may argue that the slippery floor was not part of their fault and are hence not liable for the injuries that visited Amy but if the plaintiff can contend that if it were not for the breach in the premises she would not have found herself in those circumstances. On the hand, it is clear that Sally and Sean have suffered severe injuries resulting from the breach of duty.

Dapar Heating Systems Ltd have the option of conceding that the harm was foreseeable but the harm that Amy suffered occurred in unforeseeable circumstances. It is a settled position in Hughes v Lord Advocate[27] that a defendant may escape liability if they can prove that albeit the harm was foreseeable it occurred in a manner that could not be in the contemplation of the defendant. Suffice to say the court have also ruled that liability will not attach to the defendant if the claimant’s injury is one that he usually she easily suffers from independently.[28]

The Dapar Heating Systems Ltd which is the possible defendant in this can argue that the negligence that is being alleged is contributory negligence. Contributory negligence arises in circumstances where the claimant failed on his part to take care of his safety and thus contributed to the injury that he has suffered.[29] The defendant company can thus argue that Amy contributed to the injury that she suffered because she negligently failed to know that the area had a slippery floor. In the case of Froom v Butcher[30] the defense of contributory negligence was successful because the claimant had failed to care of his safety by failing to put on the seatbelt

Dapar Heating Systems Ltd can also rely on the argument that the chain of causation with regards to Amy’s injury was broken and thus the causal link between the negligent act and her injury does not exist. However, the courts have always given preference to the defense of contributory negligence rather than accept the argument on causal link as was seen in the case of Reeves v Commissioner of Police of the Metropolis.[31]

This is a possible defense in the law of tort that says that the claimant has invited the injury to himself voluntarily. In this type of the defense the defendant argues that the claimant was aware of the nature of the risk.[32] Lord Denning noted that the defendant must also waive the right to bring a claim by expressly or impliedly agreeing to do so.[33] It is however submitted that such a defense may not be a strong defense because it is hard to believe that a claimant can volunteer to invite an injury to himself.

The court may award special damages in cases of a successful claim of negligence to claimants who have incurred medical expenses and loss of income. This type of damages is awarded for pure economic loss. In this case Amy, Sally and Sean will be awarded special damages if they succeed in their claim because it is evident that they have suffered severe medical injuries and will require medical expenses. Incase they are not able to attend their daily work and hence lose income they will recover the amount of money they have lost by way of special damages.

The court may also award general damages which are awarded for emotional pain and distress that may have undergone following the breach of duty and the injury caused. Amy, Sally and Sean can argue that they have suffered serious shock and pain flowing from the injuries that they have sustained. General damages are generally regarded as non economic damages because they can not be quantified. The amount of money awarded in this case is determined based on the discretion of the judge although in some jurisdictions they have placed legal limits on the amount of general damages that may awarded following each civil wrong.

Australian Development Corporation (ADC) v White Constructions (1996) 12 BCL 317. 2.

Avon Insurance plc v Swire Fraser Ltd [2000] 1 All ER (Comm) 573, [2000] CLC 665

Barnett v Chelsea & Kensington Hospital (1968)3 All ER 1068

Bisset v Wilkinson [1927] AC 177

Bolam v Friern Hospital Management Committee (1957) 1 WLR 582

Boucaut Bay Co Ltd v Commonwealth (1927) 40 CLR 98

Caparo Industries v Dickman (1990) 2 AC 605

Capps v Miller [1989] 1 WLR 839

Capital v Hampshire County Council (1997)QB 1004

CMA Assets Pty Ltd v John Holland Pty Ltd (2015)WASC217

Donoghue v. Stevenson (1932)UKHL 100

Fibrosa Spolka Akcyjna v Fairburn Lawson Combe Barbour Ltd (1943) AC 32

Froom v Butcher [1976] QB 286

Grant v Australian Knitting Mills (1936 )A.C. 562

Haley v London Electricity Board (1964) 3 WLR 479,

Home Office v Dorset Yacht Club (1970) AC 1004

Hughes v Lord Advocate (1963) A.C. 837 (H.L.).

J-Corp Pty Ltd v Mladenis (J-Corp) (2010) 26 BCL 106

Jerry Bennett Masonry Inc. v. Crossland Constr.Co. (2005) 171 S.W.3d 81

Kent v Griffiths  (2000)2 WLR 1158

L Shaddock & Associates Pty Ltd v Parramatta City Council [1981] HCA 59

L'Estrange v F Graucob Ltd [1934] 2 KB 394

Latimer v AEC Ltd (1952) 2 All ER 449

Nathan C, Lee C  and Henry P,( 2014) Resolving Problems and Disputes on Construction.

Nettleship v Weston [1971] 3 WLR 370

Reeves v Commissioner of Police of the Metropolis [2000] 1 AC 360

Roe v Minister of Health [1954] 2 All ER 131

Scott v London & St Katherine's Docks (1865) 3 H & C

South Carolina Federal Savings Bank v. Thornton-Crosby (1992) SC 423 S.E.2d 114

Smith v Chadwick (1884) 9 App Cas 187

Smith v Charles Baker & Sons [1891] AC 325

Paris v Stepney Borough Council (1951) 1 All ER 42,

Watt v Hertfordshire County Council (1954) 1 WLR 835