Construction Law and Contract Disputes

This legal assignment delves into the complexities of construction law, particularly concerning contract disputes and breach obligations. It requires a detailed analysis of two prominent cases: Morrison v. The Royal Bank of Scotland Group Plc and Surrey Heath Borough Council v. Lovell Construction Ltd. The assignment emphasizes understanding the implications of these cases for contractors, clients, and subcontractors, exploring concepts like negligence, liquidated damages, and contractual indemnities.

Case Comprehension Exercise 1
Case Comprehension Exercise
Student
Institution

Case Comprehension Exercise 2
Introduction
The general defense against liabilities in a construction case is demonstrating that
everything was carried out as what a reasonable man could have done. An example of such a
situation was the case of Morrisons Associated Companies Ltd v. James Rome & Son Ltd (1964)
(SLT). The court found the builder not liable for the collapse of the building since he had acted
reasonably in preventing the collapse. This paper will in study in deep the various details of the
case.
1. What are the key facts of Morrison’s Associated Companies Ltd. v. James Rome
& Sons Ltd?
The dispute arose from a construction contract between Morrison’s Associated
Companies Ltd and James Rome & Sons Ltd. The contract required the defendant to clear the
existing frontage and elect a new one. The defendant was then required to provide a temporary
space as they erect a new frontage. Shortly after providing a temporary space, the portion
collapsed forcing the demolition of the entire building.1
The claimant brought an action against the builder. The claimant was relying on a general
condition for construction contracts. The condition required the defendant to do everything
necessary for the sound execution of the contract. Some of the terms under this condition were to
provide adequate shoring and preventing over-jacking. The claimant averred that the defendant
had breached these terms. The claimant also claimed that the defendant acted negligently in
failing to act reasonably in shoring and jacking Techniques.
1 George Bett, Frith Hoehnke and James Robison, The Scottish Building Regulations (3rd edn, John Wiley & Sons
2008).

Case Comprehension Exercise 3
The court listened to both sides, but it found the defendant not guilty of any of the claims.
The court found that it was true that the building collapsed in the hand of the builder. It also
collapsed during the execution of the contract. The builders had also transferred the weight of the
entire building into a temporary support. In the examination of all these processes, the court
found that the builders had provided sufficient support, and nothing proved that the defendants
had failed to do according to their professional requirements. Further, the court did not find the
defendant negligent as they had provided their skills in compliance with the standard practice in
the building and construction trade. However, the court rejected the defendant's submissions that
their position in law was similar to that of Hunter v. Hartley.2 The court concluded that a case of
negligence requires the claimant to demonstrate that the defendant acted unreasonably while
exercising care.
2. What is the general legal significance of this case?
This case is a solution for questions regarding owner's remedies in case of a violation of
the terms when the construction is in progress. In this case, the court did not find the builder
liable for negligently causing the collapse of the building after supporting it in accordance with
the standard practice of the trade at that time.3 In other words, the builder had acted as a
reasonable man. This ruling can be supported by the case of, P & M Kaye v Hosier and
Dickinson (1972). The court cannot hold a contractor liable for defective work if the construction
is still in progress. It is assumed that the contractor can still correct the defects. The concept of
‘temporary disconformity.’ As a general principle, condition 1 implies an ‘absolute obligation’
upon the contractors. This absolute obligation holds a contractor liable for breach without
2 Hunter v Hanley [1955] SC 200
3 MacRoberts., Macroberts On Scottish Construction Contracts, 3Rd Edition (3rd edn, John Wiley & Sons 2014).

Case Comprehension Exercise 4
necessarily proving how the breach happened. It is an obligation requiring a contract to do
everything possible to execute a contract reasonably.
3. In Morrison the Lord President refers to a clause (from the General Conditions of
Contract for Building Works in Scotland 1954) as having been a “standard clause in
building contracts in Scotland for many years”. What are the key provisions of the clause
in question?
There is one main provision from the clause. The provision requires the contractor to do
what it takes in reaching the results which are a proper completion. He should comply with all
signed drawings, specifications, schedules of quantities, and these conditions’ The clause also
imposes liabilities for breach of the contractor fails to perform as required by the contract.
However, the Lord President gave this clause more profound interpretation. He interpreted the
clause as requiring the contractor only to rely on the drawings, specifications, and schedule of
quantities. Lord President stated that the timely and proper completion of the work’ does not
require any absolute or quasi-absolute obligation. It only requires the contractor to work within
the recognized standards and practice in the trade. The contractor should act reasonably as what a
reasonable person in his position would do.
4. What might a contractor have to do if it were placed under an obligation to do
everything which is necessary in an absolute sense for the due and proper completion of
construction works?
In such a situation, the law will take an objective approach in identifying the defects.
Where they reasonably arise from the negligent of the contractor, liabilities for breach would be
assigned.4 Defects in most of the constructions arise from the failure of the contractor to work in
4 Michael Sergeant and Max Wieliczko, Construction Contract Variations (3rd edn, Informa Law from Routledge
2014).

Case Comprehension Exercise 5
a 'good and workmanlike manner.' The same may result from three causes. For one, the failure to
work within the good standard practice of the trade.5 Failure to comply with the agreed design,
specifications or materials. Where a contract requires an absolute sense of obligation, the
Contractor must do everything reasonable and necessary for the timely and sound completion of
the construction. Any defects reasonably resulting from the contractor would attract liabilities.
5. The case of Surrey Heath Borough Council v. Lovell Construction Ltd. and
Another (1988) B.L.R 25 has significance in the context of the decision in the Morrison
case. Discuss.
The case concerns a contract where Surrey Heath Borough Council engaged Lovell
Construction Ltd in a design and construct contract. The defendant was to build a council
chamber office building. Another contemplation was that the personnel were to move to the new
office after its completion. The Contactor subcontracted another domestic firm for electrical,
plumbing and heating installation in a JCT Standard Form of Building Contract.
The sub-Contractor started with the welding in the roof loft using an oxyacetylene torch.
The welding started the fire that destroyed the entire roof plus other extensive damages to the top
floor. The ingress of water and other burning materials also caused additional damages. After the
fire, the construction proceeded until the completion which delayed with 18 months. It was after
completion when the claimant commenced suit for the breach of contract. He also claimed
indemnity under clause 20.2 of the contract and damages resulting from the subcontractor's
negligence. The damages included direct loss, liquidated damages for delayed completion and
economic loss. The court came up with various recommendations.
5 Julian Bailey, Construction Law (1st edn, Informa Law 2011).

Case Comprehension Exercise 6
(a) The claimant could only recover losses contemplated under clause 20.2 of the contract
except for the losses covered by the insurance under clause 22(a).6
(b) The extension of time allowed by the claimant waivered liquidated damages for
delayed completion;
(c) The court found the contractor for acting negligently and allowed the claimant to
recover the damages suffered due to contractor’s negligence.7
(d) The claimant could not recover pure economic loss as there was no proximity in the
relationship between the claimant and the sub-Contractor as found in Junior Books Ltd v Veitchi
Co Ltd.8
(e) In case the insurer failed to compensate the claimant, the sub-contractor was to
compensate the claimant to safeguard his contractual rights against the contractor.
Again, the defendant raised the principles in ‘diplock temporary disconformity’ as a
defense. The principles state that there is no breach of a contract as far as the completed
construction complies with the required design, specification, and the required standard, there
can be no claim for breaches which happened before completion. However, the judge rebutted
the claim and said that such principles would not apply to cases of fire destructions when
approaching completion.
Bibliography
MacRoberts., Macroberts On Scottish Construction Contracts, 3Rd Edition (3rd edn, John Wiley
& Sons 2014)
6 Issaka E Ndekugri, Michael E Rycroft and Issaka E Ndekugri, The JCT 05 Standard Building Contract(2nd edn,
Butterworth-Heinemann 2009).
7 John Adriaanse, Construction Contract Law (4th edn, Palgrave Macmillan 2016).
8 Junior Books Ltd v Veitchi Co Ltd [1983] 1 A.C. 520

Case Comprehension Exercise 7
Bett G, Hoehnke F and Robison J, The Scottish Building Regulations (3rd edn, John Wiley &
Sons 2008)
Bailey J, Construction Law (1st edn, Informa Law 2011)
Sergeant M and Wieliczko M, Construction Contract Variations (3rd edn, Informa Law from
Routledge 2014)
Ndekugri I, Rycroft M and Ndekugri I, The JCT 05 Standard Building Contract (2nd edn,
Butterworth-Heinemann 2009)
Adriaanse J, Construction Contract Law (4th edn, Palgrave Macmillan 2016)
Junior Books Ltd v Veitchi Co Ltd [1983] 1 A.C. 520
Hunter v Hanley [1955] SC 200