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BCL Law Notes Commercial Remedies BCL Notes

Ruxley Electronics V. Forsyth Notes

Updated Ruxley Electronics V. Forsyth Notes

Commercial Remedies BCL Notes

Commercial Remedies BCL

Approximately 497 pages

These are detailed case summaries (excerpts from cases - not paraphrased) I made during the Oxford BCL for the Commercial Remedies course....

The following is a more accessible plain text extract of the PDF sample above, taken from our Commercial Remedies BCL Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

Ruxley Electronics v. Forsyth

Facts

My Lords, the respondent entered into a contract with the appellants for the construction by them of a swimming pool at his house in Kent. The contract provided for the pool having a maximum depth of 7 feet 6 inches but, as built, its maximum depth was only 6 feet. The respondents sought to recover as damages for breach of contract the cost of demolition of the existing pool and construction of a new one of the required depth.

The trial judge made the following findings which are relevant to this appeal:

(1) the pool as constructed was perfectly safe to dive into;

(2) there was no evidence that the shortfall in depth had decreased the value of the pool;

(3) the only practicable method of achieving a pool of the required depth would be to demolish the existing pool and reconstruct a new one at a cost of 21,560;

(4) he was not satisfied that the respondent intended to build a new pool at such a cost;

(5) in addition such cost would be wholly disproportionate to the disadvantage of having a pool of a depth of only 6 feet as opposed to 7 feet 6 inches and it would therefore be unreasonable to carry out the works; and

(6) that the respondent was entitled to damages for loss of amenity in the sum of 2,500.

Holding

Lord Jauncey

Reasonableness

I take the example suggested during argument by my noble and learned friend, Lord Bridge of Harwich. A man contracts for the building of a house and specifies that one of the lower courses of brick should be blue. The builder uses yellow brick instead. In all other respects the house conforms to the contractual specification. To replace the yellow bricks with blue would involve extensive demolition and reconstruction at a very large cost. It would clearly be unreasonable to award to the owner the cost of reconstructing because his loss was not the necessary cost of reconstruction of his house, which was entirely adequate for its design purpose, but merely the lack of aesthetic pleasure which he might have derived from the sight of blue bricks. Thus in the present appeal the respondent has acquired a perfectly serviceable swimming pool, albeit one lacking the specified depth. His loss is thus not the lack of a useable pool with consequent need to construct a new one. Indeed were he to receive the cost of building a new one and retain the existing one he would have recovered not compensation for loss but a very substantial gratuitous benefit, something which damages are not intended to provide.

What constitutes the aggrieved party's loss is in every case a question of fact and degree. Where the contract breaker has entirely failed to achieve the contractual objective it may not be difficult to conclude that the loss is the necessary cost of achieving that objective.

My Lords, the trial judge found that it would be unreasonable to incur the cost of demolishing the existing pool and building a new and deeper one. In so doing he implicitly recognised that the respondent's loss did not extend to the cost of reinstatement. He was, in my view, entirely justified in reaching that conclusion. It therefore follows that the appeal must be allowed.

Intention

The appellant argued that the cost of reinstatement should only be allowed as damages where there was shown to be an intention on the part of the aggrieved party to carry out the work. Having already decided that the appeal should be allowed I no longer find it necessary to reach a conclusion on this matter. However I should emphasise that in the normal case the court has no concern with the use to which a plaintiff puts an award of damages for a loss which has been established. Thus irreparable damage to an article as a result of a breach of contract will entitle the owner to recover the value of the article irrespective of whether he intends to replace it with a similar one or to spend the money on something else. Intention, or lack of it, to...

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