Construction Law and Contract Disputes

This assignment delves into the complexities of construction law, focusing on the prevalent issue of contract disputes. It requires students to analyze a variety of case studies involving construction projects, identify breaches of contract, and evaluate potential legal remedies. The analysis should demonstrate an understanding of relevant legislation, contractual provisions, and established legal principles governing construction contracts.

Running head: Assignment
Construction Law

Assignment 1
Contents
Answer 1...............................................................................................................................2
Answer 2...............................................................................................................................6
References..........................................................................................................................11

Assignment 2
Answer 1
The channel of construction matters administers by legal regulatory frameworks. The
construction contract law result from agreements made between parties for all construction
matters even if they are not executed on written agreements.
The response to the problem provides explanation of new statutes, court cases and standard
form of contract. As per facts of the problem, John is an aggrieved party who seek claim
for damages and compensation against the threatening actions of Chris and Peter under the
construction law.
Every Construction Contract law binds with an obligation to specific performance to
contract. If any default in performance of contract then the ambiguity in construction terms
takes place. The court have acknowledged following four major classification of
construction defects:
 Design insufficiencies
 Material insufficiencies
 Description problems
 Workmanship paucities (Hughes, Champion and Murdoch, 2015).
The present problem to the response supports the “design and workmanship deficiencies”.
In the provision of Section 2.1 of the Construction Contract Law – the general rule is that
the contractor is in obligation to convey the entire construction work in a prescribed mode
according to the terms of the contract. In case of defects occur during period of
construction contract law, the contractor obliged to facilitate the default without any
additional or extra cost. Even the contractor is liable to pay defect in the construction
project (Keenan and Smith, 2007).
The ambit of construction law states that the damages may be claimed by the aggrieved
party on the basis of breach of contract or in defaulting on the part of contractor. The basic
claims of the construction contract are ruled by the application of contractual legislation in
Australia. The application of contractual law specified in the leading case of Hadley v
Baxendale [1854] EWHC J70. The rule of Baxendale provided the base of damages mainly

Assignment 3
under two circumstances. The circumstances are that quantum of damages are determined
by the “general damages” and another “special damages”. The general damages can be
awarded in the general circumstances. While, the special damages are awarded when the
party provides a justification that the damages were not foreseeable or remote in nature
(John, 2013).
Fairfield Development, Inc. v. Georgetown Woods Sr. Apartments Ltd. Partnership, 768
N.E.2d 463, 474 (Ind. Ct. App. 2002) held that the court shall determine the measures of
damages on the basis of fair and reasonable theme of argument for the breach of the
contract. The case is simply a rectification of the application of Hadley rule.
Under English law, the legal rule is that every construction work must be free from any
patent or latent defects. In case of Dura (Aust) Constructions Pty Ltd v Hue Boutique
Living Pty Ltd, the court held that any conveyance contract is not complied without
the requirements of the “show cause notice” in case of any fault arisen in the
agreement. Such show cause notice does not require any particular or precise detail
but must show that the agreement is broken by the contractor. Mostly, the verdict of
court favours the compliance of show cause notice in the conveyance agreement
(Slapper and Kelly, 2009).
The legal rule in construction law is that settled compensations are awarded in the
event of violation of contract. Such liquidated damages may also be rightfully given
when there is a pre estimation of genuine loss. However, the Australian Apex Court
changed the method in the thought of “liquidated damages”. The test of pre
estimation of loss must be taken place before awarding any liquidated damages to
the aggrieved party in Cavendish Square Holding BV v El Makdessi and ParkingEye Ltd
v Beavis [2015] UKSC 67.
Further, the present problem supports the application of common law; every
contractor is liable to complies with the duty to care, skill and diligence in order to carry
out the basic requirement of the construction. The strict duty must be follow in the
construction work.

Assignment 4
In Greaves v Baynham Meikle, [1975] 1 WLR 1095, the case states that duty is mandatory
in nature. Lord denning asserted that there must be a fitness for obligation. Such
obligation include that the owner hire contractor for a purpose to renovate building only
on the basis of contractor skill and capability to construct a building. Therefore, it the
obligation of the contractor to find out the work implementation in a proper manner and
also ensure that work is finished according to owner terms and conditions. Thus, the
application of “reasonable care” must be properly applied in every case of construction
work (Hapke, 2009).
In IBA v EMI and BICC, (1980) 14 BLR held that the agreement to construction if not
made on any express terms then in such implied conditions are set down because the
obligation to construction work is deemed to be include an undertaking obligation of the
contractor personally. Moreover, Judge John Davies stated in case, Viking Grain Storage
v T.H. White Installations Ltd, (1986) 33 BLR that the benefit of the implied condition
prescribes reasonable standard of liability. In such circumstance, the contractor cannot
deny the unfinished work to complete on a demand additional consideration (Hinze,
2012).
Generally, the owner of the building is not entitled to recover amount of costs if he does
not prove the case under nature of “breach of contractual terms”. Such remedy to the
breach of the contract requires an evident factor of specifications. For example- the
specification is that to construct a building for a purpose of commercial use and
construction of parking area is a must requirement under specification. However, the
contractor constructs a building but fails to provide any space for parking area. Such
specification of the construction constitutes a breach of the contractual relations. The
breach of the contract always followed with a principle of remedy. Thus, in order to claim
damages, the owner has to provide evidences that no space was provided for parking in an
existing construction agreement and other reliable documents in it (Holt, 2013).
In Newton Abbott Development Co. Ltd v Stockman Brothers (1931) 47 T.L.R. 616 it was
held that an owner is entitled to claim specific performance in case on the part of failure
to act as per construction law. The plea of specific performance activates in the case in
case when contractor shift his intention not to work further for the project of owner.

Assignment 5
In William Cory & Son v Wingate Investments (1980) 17 BLR 109 the court held that the
plaintiff is entitled to cost of reinstatement in case when prima facie case made out in his
favour (Sweet and Schneier, 2012).
In British Transport Commission v Gourley [1956] AC 185, in this case, compensations
are calculated on the losses. As per defects, the liability of the defaulting party is assessed.
The contracts of the construction are mainly based on the extent of defects and as per
extent of such damages; the compensation is awarded to the aggrieved party to the case.
According to the facts, the aggrieved party entitled to the maintenance and replacement
work by defaulting party. Thus, if no such assessment of the compensation takes place
that may cause injustice to the aggrieved party.
The overview of the present cited cases states that the defects are considered as a common
base of the dispute in the construction contracts. Every owner is legally entitled to acquire
a defect free construction work. The present problem supports the case of defects and
breach by the Chris and Peter. No contractual terms can be taken for granted by any
contractor or sub-contractor.
Undoubtedly the defects matters are mostly referred to mental trauma to the owner. The
defects are simply a result of negligence performed by any contractor or sub-contractor.
In order to curb the numbers of defects matters, the ADR alternative dispute resolution
procedure is highly demanding by the parties to the construction law. The procedure
involves a speedy remedy to the parties in an easy and economical way (Lin, 2015).
Thus the conclusion of the present problem is that the John is legally entitled to claim
damages against the action of Chris and Peter. The response follows with a principle that
“absolute liability for defects arisen in the construction litigations”. As per facts of the
problem, the Court of Law may order the compensation to the John against the action of
Chris. Also the Chris and peter are obliged according to provision of “specific
performance of the contract. Thus, the threatening by the Chris shall not harm to the john.
In fact, John is legally entitled to claim specific performance of the unperformed task by
the Chris. In case of peter, no contractor can break the contract without prior information
to the owner. Here, john is legally entitled to claim damages against the Peter’s breach of
contract. Alternatively, John can also bind the peter to perform his contract as he failed to
provide prior intimation to John.

Assignment 6
Answer 2
Under English law or Common law, the law of tort is a civil wrong occur at the event of
loss raising a legal liability of an injured person. The legislation on tort allocate obligation
as well as remedy for any negligent conduct. “The term tort defined as a civil wrong
which is independent to the contract” (Uff, 2009).
The liability of tort does not rise automatically, it only exist when any reasonable losses
takes place (Bruner and O'Connor, 2009). The required components of ascertaining
reasonable losses are
 Obligation of maintenance
 Violation of the fundamental duty
 Recoverable loss.
Under common law, the leading case, Donoghue v. Stevenson [1932] AC 562 states the
fundamental principle by Lord Atkin. The duty of care is a key factor to ascertain the
basis of negligence (Jervis and Levin, 2008).
Another prominent case of negligence is Rylands v Fletcher (1868) LR 3 HL 330 where
justice Blackburn states the theory on “strict liability”. The case paved the way of
judgment of numerous cases on negligence. As per doctrine of strict liability, the liability
does not include any mensrea (an intention of negligence).
As per facts of the present problem, the primarily responsibility was of McKeown who
does not provide adequate number of guards in the building. Secondly, the guards were
also not supervised by the managers. Thirdly, the builder does not provide any quality
work in the building. The defaulting party is McKeown in this present problem and is
liable under tortious law. As per law of tort, McKeown committed negligence and breach
the fundamental duty of care and diligence. The cases supports the response to the
problem is:

Assignment 7
The leading case which invokes a fundamental principle on negligence in construction
law in the Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 establishes the
fundamental ruling on liability. In this case, House of Lords held that the liability of
defaulting party recognises not only on the basis of pure economic terms but also with the
liability on the basis of compliance of “standard of responsibility” (Jones, 2010).
The same application of “economic loss” is laid down in Murphy v Brentwood District
Council [1991] 1 AC 398 where a House of Lords held that the damages are compensated
on the basis of pure economic losses. As per facts of the case, builder failed to provide
adequate compliance of construction which later results of owners’ death by slippery tiles
used by builder. The case also overruled the ruling of Anns v Merton London Borough
Council [1978] A.C. 728 where two stage test is applied to ascertained the measures of
damages.
London Borough of Merton v Love [1988] 18 Con LR1- where the builder of the
swimming pool failed to discover cracks ceilings in pool and court held that builder is
obliged to perform a repairs as well as compensation to provide to the owner of the
property on the basis of negligence.
Justice Dyson reviewed the duty of care and diligence in the case of Chesham Properties
Ltd v Bucknall [1996] 82 BLR 92- where the builder was need to implement a proper
application of the “duty of care and diligence” in the construction of the flats. After
completion of the flats, complaints were received by the occupants of the sound proofing.
In such case, the court held that architecture is liable to follow the proper application of
the “duty of care and diligence” and compensate the aggrieved party in case of breach of
their fundamental duty of care and diligence (Deakin, Johnston and Markesinis, 2012)
The general rule of the construction law is that every architecture must ensure the duty to
provide work with free defects and also such work must fall under “fit purpose” in order
to check its accuracy of the performed work (Rubin, 2013). Such applicability also lied in
the case of Greaves & Co v Baynham Meikle [1974] 1 WLR 1261- where the engineer
was instructed to construct first floor as per principle of “balance in loaded weight”. Such
balance of weight was ignored by the engineer. Justice Kilner Brown held that engineer is

Assignment 8
liable as he failed to exercise a reasonable care and skill and also failed to provide “fit
purpose” of the construction (QC, R.W.S., 2010).
In IBA v EMI & BICC [1980] 14 BLR1 HL- the defaulting party committed a breach of
duty of “reasonable care and skill” as contractor failed to complied with all agreement of
the construction agreement. Lord Scarman held that contractor is obliged to fulfil all the
terms of contract either it is expressed or implied and must exercise the duty of care and
skill during the course of the contract.
Same application of the contract compliance held in the case of Payne v John Setchell Ltd
[2002] PNLR 7- where the claimant entitled to compensation on a breach of “duty of care
and diligence” on the part of the builder who was obliged to design three sets of three
units in the building. In addition, the claimant reported the allegation of the negligence on
the part of builder as after construction building was facing water ceiling in the rooms
(Fenn, Lowe and Speck, 2007).
Harrison v Shepherd Homes Ltd [2012] EWCA Civ 904- Justice Ramsay J held that the
every builder is required to compliance with a requirement of the “Defective Premises
Act, 1972” which states that person must owe work of construction with an usage of
quality materials so that a proper implementation of “fitness for habitation” can be sought
(Richter and Mitchell, 2012).
In the present problem, the three claimants namely Timothy, Samson and William are
required to constitute following elements of the negligence as per according to tortious
law (Barrett, 2008):
 There must be a breach of fundamental duty of care and diligence which
consequently rose by the damages.
 An injury must take place in order to institute the ground of “breach of duty and
care”.
 The existence of the breach is ascertained by the fundamental principle of
common law that is “principle of proximity and foreseeability”.
 The degree of duty of care and diligence is determined by the acts or conducts of
ordinary prudent person.

Assignment 9
 The nature of negligence is ascertained according to circumstances of every case.
In this present problem, the measures of negligence are high in nature as three
teens were injured due to negligent conduct of the builder and his guards (Wallace,
2009).
Hence, the law of tort includes the basic criteria needs to follow. Such basic criteria are
not fulfilled results into damage. Such criteria include an “utmost duty to provide care and
diligence”. If any contractor performs any breach then such default falls into category of
“negligence”. Therefore, every builder, contractor or sub-contractor is liable to foresee the
nature and extent of their duty to care and diligence so that no third party is damaged by
such breach (Appleman and Holmes, 2016). Further, the standard of care is a most
significant element to prove the basis of negligence on the part of defaulting party. The
aggrieved party must foresee the circumstances of damages in order to claim any
compensation against opposite party.
It to be noted that any claim on the negligent construction work lies in independently
footings other than claims of breach of any contractual liability. The negligence elements
are based on the four main core bases to arise the breach of “standard of care”. These four
core bases include degree of duty, breach, causation and damages (Peck, 2016). The duty
involves compliance of entire requirement of “standard of care”. Secondly, the breach
involves an establishment of negligent conduct. Thirdly, the element of causation is
establishes the moment breach takes place. The principle of causation deals with an
apportionment of damages. Lastly, the principle of remoteness takes place when losses are
ascertained on the basis of foreseeability of damages (Clough and Sears, 2014).
At the end of the present problem, the standards of damages are not meant to provide
monetary benefits but also to aid in securing the justice to the aggrieved party. The
construction law mainly based on the principles of natural justice include a fair trial,
impartial and independent settlement of the disputes between parties to the case (Treacy,
2015). The law of negligence is not categorised in breach of contract but the nature of
negligence confers on wrongful acts or negligent act. The present response to the problem
concludes that Timothy, Samson and William are legally entitled to the award of damages
and court should draw inference in the merits of the claimants. The claims are genuinely
matching with requirements of the negligence in tort law. Thus, the McKeown Builders
Ltd is liable to compensate the claimants.

Assignment 10
References
Appleman, J.A., and Holmes, E.M., 2016. Contract Concerns: Reinsurance Contract
Formation, Validity, And Judicial Construction (Vol. 14). Appleman on Insurance Law
and Practice.
Barrett Jr, S.R., 2008. Recovery of Economic Loss in Tort for Construction Defects: A
Critical Analysis. SCL Rev., 40, p.891.
Bruner, P.L. and O'Connor, P.A.T.R.I.C.K., 2009. Construction Law.
Clough, R.H. and Sears, G.A., 2014. Construction contracting. John Wiley & Sons.
Deakin, S.F., Johnston, A. and Markesinis, B., 2012. Markesinis and Deakin's tort law.
Oxford University Press.
Fenn, P., Lowe, D. and Speck, C., 2007. Conflict and dispute in construction.
Construction Management & Economics, 15(6), pp.513-518.
Hapke Jr, D.S., 2009. Construction Industry Contracts. . Louis ULJ, 23, p.249.
Hinze, J., 2012. Construction contracts. McGraw-Hill Science/Engineering/Math.
Holt, G.D., 2013. Construction business failure: conceptual synthesis of causal
agents. Construction Innovation, 13(1), pp.50-76.
Hughes, W., Champion, R. and Murdoch, J., 2015. Construction contracts: law and
management. Routledge.
Jervis, B.M. and Levin, P., 2008. Construction law, principles and practice. McGraw-Hill
College.

Assignment 11
John, U.F.F., 2013. Construction law: law and practice relating to the construction
industry.
Jones, W.K., 2010. Economic Losses Caused by Construction Deficiencies: The
Competing Regimes of Contract and Tort. U. Cin. L. Rev., 59, p.1051.
Keenan, D.J. and Smith, K., 2007. Smith & Keenan's English Law: Text and Cases.
Pearson Education.
Lin, Y.C., 2015. Use of BIM approach to enhance construction interface management: a
case study. Journal of Civil Engineering and Management, 21(2), pp.201-217.
Peck, C.J., 2016. The Federal Tort Claims Act--A Proposed Construction of the
Discretionary Function Exception. Wash. L. Rev. & St. BJ, 31, p.207.
QC, R.W.S., 2010. Construction Contracts: law and practice (p. 210). Oxford University
Press, New York.
Richter, I. and Mitchell, R.S., 2012. Handbook of construction law and claims. Reston
Publishing Company.
Rubin, R.A., 2013. Construction claims: analysis, presentation, defense. Van Nostrand
Reinhold Company.
Slapper, G. and Kelly, D., 2009. The English legal system. Taylor & Francis.
Sweet, J. and Schneier, M., 2012. Legal aspects of architecture, engineering and the
construction process. Nelson Education.
Treacy, T.B., 2015. Use of alternative dispute resolution in the construction industry.
Journal of Management in Engineering, 11(1), pp.58-63.
Uff, J., 2009. Construction law (pp. 63-76). London: Sweet & Maxwell.
Wallace, I.N.D., 2009. Construction contracts: principles and policies in tort and
contract. Sweet and Maxwell.

Assignment 12