Construction Law Assignment: Negligence, Mortgages, and Contracts

This assignment provides a comprehensive analysis of key legal concepts within construction law. It begins with a discussion of negligence, applying the elements of duty of care, breach of duty, foreseeable risk, proximate causation, and damages to a scenario involving reckless driving. The assignment then explores property law, examining mortgages, easements, and restrictive covenants. It delves into the Law of Property Act 1925, the Land Registration Act 2002, and relevant case law, explaining the rights and responsibilities of parties involved. The assignment also covers adverse possession, outlining the requirements for acquiring property through possession. Finally, the assignment concludes with an analysis of contract law, identifying the essential elements of a valid contract, including offer and acceptance. Throughout the assignment, relevant legislation and case law are cited to support the arguments presented.

Running Head: CONSTRUCTION LAW
CONSTRUCTION LAW
Name of the Student
Name of the University
Author’s Note

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Question 1:
Issue:
The issue in the case is whether Careless Carl is liable for the claim of possible
negligence.
Rules:
Negligence: it is failure of the defendant to exercise the duty of care as imposed upon
the defendant owing to the position of the person being that of the reasonable man (Luntz et
al. 2017). Thus the elements of the negligence (Peoples and MacDougall 2018) to form an
actionable offence are:
 Duty of Care: this is the standard of care which is expected from the defendant
against the harm which is foreseeable by such defendant (Donoghue vs. Stevenson [1932]
AC 532). However, the standard of care is ought to reasonable in nature in the aspect as
the care would have been taken by any other reasonable man in that particular
situation1.
Breach of duty of care: it is the failure of the defendant to exercise the duty of care as
expected to be exercised by the defendant against the harm created by the acts of such
defendant due to which the plaintiff would have suffered harm (Caparo Industries Plc vs. Dickman
[1990] UKHL 2).
 Foreseeable risk: this means that the risk against which the defendant is ought to
exercise duty of care should be foreseeable in nature (Caparo Industries Plc vs. Dickman
[1990] UKHL 2).
1

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 Proximate Causation: this means that the harm caused to the plaintiff should be a
direct or proximate result of the breach of duty of care due to which the plaintiff
suffered such harm (Palsgraf vs. Long Island Railroad Co. [1928] 248 NY 339, 162 NE 99).
 Damages: this is cost of actual harm being caused to the plaintiff against which the
claim is actionable (Constantine vs. Imperial Hotels Ltd [1944] KB 693). This includes both
physical injury and mental trauma as inflicted upon the plaintiff due to the harm
caused due to the actions of the defendant against which the defendant was supposed
to exercise care and the same has been breached by the defendant.
The theory of contributory negligence (Goudkamp and Nolan 2019) is a defense which is
available to the defendants by restricting the plaintiffs from recovering the claim by arguing
the injury being partly due to the fault of the plaintiff (Barry 2017).
Application:
Applying the elements of negligence, it can be explained that Careless Carl drove well
above the speed limit and hence, he owed duty of care towards others that they should not be
injured because of his driving. Further, the duty was breached when Carl was driving at a
speed which was well above the speed limit stipulated for safe driving and hence, the duty
was breached. Further, the risk of injury to others was foreseeable because the high-driving
technique is injurious to others as well as self. Dad delightful was hurt with the proximate
cause being the high speed of the car and crashing the car into the wall. Damages are the
actual cost incurred for the injury which is the recovery of Dad Delightful. However, it can be
argued that applying the theory of contributory negligence, it can be explained that Careless
carl would be liable only for the injury occurred due to the reckless high speed driving and
not the worse injury caused due to the fault of Dad Delightful for not wearing his seat belt. It
can be contended that applying the element of proximate cause, it can be explained that the

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cause of in jury is primarily the wall crash due to high speed driving of Careless Carl and
fault of Dad Delightful is only a remote causation to the injury caused.
Conclusion:
It can be concluded that Careless Carl is liable for the claim of possible negligence.
Question 2:
A: Mortgage:
The theory of mortgage is enshrined in the Law of Property Act 1925. The English
law has ensured restriction upon the possession of the property in case of failure of the
repayment of the loan and it imposes duty upon the mortgagee with respect to the price which
may be gained at the time of selling of the property. Section 85 of the Law of Property Act
1925 explains that the mortgage shall be enforceable only if it is executed in the form of
deed. Section 1 of Law of Property Act 1925 also states that any document which is signed,
and witnessed shall be explained as a deed. Section 85 of the Act further explains that
mortgages are the secured loans which creates similar rights as a holder of 3000 year old
lease which is a primitive protective measure in common law system of mortgage terms
wherein it was explained that property shall be redeemed in the end, only after the loan has
been repaid in full (Vernon vs. Bethell [1762] 28 ER 838). However, the same was criticised in
1802 explaining that a mortgage cannot be converted into a property ownership by terms of
an agreement (Seton vs. Slade [1802] 7 Ves 265, 273). However, the rule was later suspended
stating that such rule shall not be exercisable in commercial terms protecting the interest of
vulnerable lenders (Jones vs. Morgan [2001] EWCA Civ 995). Applying the rule, it can be
explained that the right of the bank from the property shall cease to exist once the loan has
been repaid in full conferring the entirety of the ownership rights of the land to the Delightful
Developers.

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B: Easements:
Land Registration Act 2002 enshrines the explanation of easements over registered
land which may have arisen by implied reservation need not be completed by registration to
take legal effect. In other words, the easement will be an interest which shall be overriding in
nature (Re Ellenborough Park [1956] Ch 131). The parties who are interested in their rights of
easement, should be the party to the deed of easement or the consent to the owner of the
property to release the right of easement (Hill vs. Tupper [1863] 2 H & C 121). Such interested
persons include the registered owner or the proprietor of the land enjoying the easement, any
mortgagee in relation to the land enjoying the easement shall have the right to consent to the
release or being a party to the deed. Such persons also include any other person whose
interest has been recognised with respect to the land enjoying the easement (Phipps vs. Pears
[1965] 1 QB 76) and lastly, the owner of the land who draws benefit from such easement
(Moncrieff vs. Jamieson [2007] UKHL 42). The rights in relation to the occupation, surrender,
ending of leases and any other such similar right shall have monetary character. In the given
scenario, it can be explained that although the founders were the owner of the land, it is the
lender being the mortgagee who shall also have equal right to be the party to the easement
deed or the consent to the release of easement with respect to such land until the loan has
been repaid in full following which the ownership rights shall be rendered to the Delightful
Developers.
C: Restrictive Covenants:
In Common Law Legal System, the conditions for availing the benefit of restrictive
covenants are (Buckle and Thompson 2016):
 The benefit arising from the covenant must benefit the land and not the individual.
 The covenant must be in relation to the usage of the land or the value of the land.

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 The land which is benefitted from such covenant must be identifiable.
Thus, it can be explained that the burden of restrictive covenants does not run (Austerberry
vs. Oldham Corporation [1885] 29 Ch D 750) except in estates involving strict privity meaning the
existence of the relationship of a tenant and a landlord. However, in other cases, the burden
can be enforced in limited situations. These situations involve those wherein the person who
takes the benefit shall be to run the burden (Halsall vs. Brizell [1957] Ch 169). However, it has
further been held that the positive burden can only run in law but as far the equity is
concerned, the burden cannot run. In other words, the theory of positive burden does not
apply to the principles of equity (Rhone vs. Stephens [1994] UKHL 3). Therefore, in the given
scenario, it can be explained that Delightful Developers would continue to have their right
over the property after the repayment of the loan until which the rights and benefits with
respect to the land lies with the lender.
D: Averse Possession:
Adverse Possession is one of the most significant theories in relation with the method
of the acquisition of a property (Nicole 2018). Land Registration Act 2002 explains that after
the expiry of the period of 10 years, the adverse possessor may apply to the registrar for the
possession of the land and its registration under the name of the applicant as the newly
registered owner of the property. The rule for the implying significance to the period of time
being the expiry of ten years for the adverse possessor to possess the property is to ensure the
usage of land was made in the optimum value and in efficient manner. The Act also signifies
the serving of notice of adverse possession to the owner of the property. This was done so to
ensure the knowledge of the owner with respect to the possession of the land otherwise the
adverse possession were made without the actual possession of the property (JA Pye (Oxford)
Ltd. Vs. Graham [2002] UKHL 30). These ways included the storage of goods or temporary

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engagement to ensure that the property has been adversely possessed (Leigh vs. Jack [1879] 5 Ex
D 264). The owner has the period of 65 days to file objection to the application made by the
adverse possessor for the possession of the land. However, in case of tenancy, it must be
noticed that the land belongs to the landlord and it will be possessed by the tenant only for the
period as agreed by the parties (Smirk vs. Lyndale Developments Ltd [1974] 3 WLR 91). In the given
scenario, it can be explained that the founders have the responsibility to develop the land and
also to repay the loan so as to avoid adverse possession of the property by the lender who can
claim the property in case the loan is payment. Further, after the payment is made in full and
the property is owned by the Developers, it is the responsibility of the founders to maintain
the land free from squatters and respond to any application made for adverse possession
within the period of 65 days so that the land is not adversely possessed by the third or the
outside parties.
Question 3:
Contract is a legally enforceable agreement which is formed by the mutual consent of
the parties wherein one party offers to enter into contract with the other party in exchange of
some act or omission of an act to which the other party promises to pay consideration amount
in cash or in kind (Richard and Devenney 2017). There are five elements for the formation of
a valid contract (Chalkidis Androutsopoulos Michos 2017). They are:
 Offer and Acceptance: this is an essential stage for the formation of a contract
wherein one party offers a proposal to the other party with a set of terms and
conditions with respect to the contract along with the consideration the party is
willing to pay against the act to be performed in the form of commission or omission
of an act as agreed by the parties in the terms of the contract (Smith vs. Hughes [1871] LR
6 QB 597). Acceptance is the meeting of minds where the other party agrees to accept

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the contract as well as the terms and conditions which shall be binding the
performance of the contractual obligation. Offer and acceptance both should be loud,
clear and specific to the party.
 Intention to create legal intentions: this means that the parties wishes to be bound
by the terms and conditions of the contract and create a relationship between each
other which shall be bound by the legally enforceable agreement (Rose & Frank Co vs. JR
Crompton & Bros Ltd [1924] UKHL 2).
 Consideration: This means that the contractual obligation is offered in exchange of a
benefit which can be in form of right, interest, benefit or monetary amount (Currie vs.
Misa [1875] LR 10 Ex 893).
Free consent: this means that the consent of the parties entering into the contract should be
free from threat, coercion, assault, undue influence, mistake (Great Peace Shipping Ltd vs. Tsavliris
Salvage (International) Ltd [2002] EWCA Civ 1407) and misrepresentation which may render the
contract as void or voidable at the option of the party whose consent was not free while
entering into the contract (Hampton 2017).
 Capacity: this means that the parties should have the legal capacity to enter into the
contract which is that the parties should be of the sound mind, legal age which is the
age of 18, intoxication and the proper authorization by the artificial persons to enter
into contracts on behalf of such persons. Any contract entered into by the parties with
any of the parties not having the legal capacity shall render the contract as void.
In case any party fails to perform their part of promise, it would result in the breach of
contract attracting damages claimed by the party suffering losses due to the contractual
performance being breached by the other party. In UK, the breach of contract has been

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explained in the Unfair Contract Terms Act 1977 which determines the damages with respect
to the claim in relation with the breach of contract. This includes:
 Non-performance of the contract
 Poor performance of the contractual obligation which is not at par with the terms
which was promised while formulating the contract.
 The performance of the contract which is different from what was reasonably
expected.
 Part performance meaning that the contractual obligation has been performed
partly.
The damages for the breach of contract can be recovered in two ways (Goldberger 2018):
 Compensation which is cost of losses incurred by the party due to the performance of
the contract being breached by the other party (Dunlop Pneumatic Tyre Co Ltd vs. New
Garage & Motor Co. Ltd [1915] AC 79).
 Specific Performance of the Contract (Zhang 2019) which is the completion of the
due performance of the contract with the terms and conditions remaining same, giving
legal enforceability to the terms of the contract until the performance of the obligation
breached is fulfilled.
Question 4:
Partnership Act 1890 governs the partnerships in United Kingdoms. Section 1
explains partnerships as the relationship between the partners carrying out a business with a
common intention to earn profits. Elements of a valid partnership are:
 Partnership can be an oral agreement or a written document or a conduct.

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 Minimum members required to form a partnership are two and the maximum is
unlimited after the amendment in 2002.
 The provisions of the Act shall apply unless and until expressly or impliedly excluded
by the partners in the form of an agreement.
 Each partner shall have the right of participation in the management of the firm.
 The partners shall be entitled for equal share of profit unless otherwise expressed in
the partnership agreement.
 The partners shall be indemnified against the liabilities incurred in the course of
business.
 The partners have the right not to be expelled by other partners.
 The partnership shall cease to exist upon the death of a partner.
 The partners are jointly and severally liable for the debts incurred by the firm. In other
words, the liability is not limited in nature and can extend to personal means upon
reviving the debts of the firm.
Companies Act 2006 governs the formation and other affairs of the company with respect to
its administration and management. The features of a company are:
 Limited liability is the most important feature of a company wherein the liability of
the investors is limited to the value of shares owned by them.
 Company is a separate legal entity acting as an individual in the form of artificial
person although managed by its directors in the form of its agent.
 Directors owe their duties to the company and must act in the good faith of the
company. In case of contrary, the court would apply the rule of lifting up of corporate
veil to being out the personal intentions of the director camouflaged behind the seal of
the company.

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 The company continues to exist even after the death of its directors. It can cease to
exist only by the way of dissolution.
 The provisions of Company Act shall apply irrespective of the agreement of the
directors and are bound to function in the best interest of the company as a form of
statutory duty.
In the given scenario it can be explained that Delightful Developers should trade as a
company because the existence of the company is more long lasting than that of the
partnership firm which shall cease to exist upon the death of the partner. Further, the
company is more versatile owing to its nature of limited liability due to which the
company can work more freely and dynamically by entering into various contracts. The
company is profitable if the aim of the founders is to work for the purpose of business and
earn profits and grow as an organisation while the aim of the partnership is short lived
owing to its intention solely being the agreement of the partners to conduct a business in
order to earn profits. Thus, it can be concluded that the Delightful developers should work
as a company.

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REFERENCES:
Austerberry vs. Oldham Corporation [1885] 29 Ch D 750
Barry, C., 2017. Statutory modifications of contributory negligence at common
law. Precedent (Sydney, NSW), (140), p.12.
Buckle, M. and Thompson, J., 2016. The UK financial system: Theory and Practice.
Manchester University Press.
Caparo Industries Plc vs. Dickman [1990] UKHL 2
Chalkidis, I., Androutsopoulos, I. and Michos, A., 2017, June. Extracting contract elements.
In Proceedings of the 16th edition of the International Conference on Articial Intelligence
and Law (pp. 19-28). ACM.
Companies Act 2006
Constantine vs. Imperial Hotels Ltd [1944] KB 693
Currie vs. Misa [1875] LR 10 Ex 893
Donoghue vs. Stevenson [1932] AC 532
Dunlop Pneumatic Tyre Co Ltd vs. New Garage & Motor Co. Ltd [1915] AC 79
Goldberger, J. (2018) "Assessment of damages for breach of contract." In Commercial Law
Quarterly: The Journal of the Commercial Law Association of Australia 32.3 (12)
Goudkamp, J. and Nolan, D., 2019. Contributory Negligence in the Twenty-First Century.
Oxford University Press.
Great Peace Shipping Ltd vs. Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407
Halsall vs. Brizell [1957] Ch 169

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Hampton, J., 2017. Contract and consent. A companion to contemporary political philosophy,
pp.478-492.
Hill vs. Tupper [1863] 2 H & C 121
JA Pye (Oxford) Ltd. Vs. Graham [2002] UKHL 30
Jones vs. Morgan [2001] EWCA Civ 995
Land Registration Act 2002
Law of Property Act 1925
Leigh vs. Jack [1879] 5 Ex D 264
Luntz, H., Hambly, D., Burns, K., Dietrich, J., Foster, N., Grant, G. and Harder, S.,
2017. Torts: cases and commentary. LexisNexis Butterworths..
Moncrieff vs. Jamieson [2007] UKHL 42
Mullin vs. Richards [1998] 1 WLR 1304
Nicol, M. (2018) . Diss. Lancaster University, The fiction of adverse possession
Palsgraf vs. Long Island Railroad Co. [1928] 248 NY 339, 162 NE 99
Partnership Act 1890
Peoples, L. and MacDougall, V.L., 2018. Negligence: Purpose, Elements & Evidence: The
Role of Foreseeability in the Law of Each State.
Phipps vs. Pears [1965] 1 QB 76
Re Ellenborough Park [1956] Ch 131
Rhone vs. Stephens [1994] UKHL 3

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Rose & Frank Co vs. JR Crompton & Bros Ltd [1924] UKHL 2
Seton vs. Slade [1802] 7 Ves 265, 273
Smirk vs. Lyndale Developments Ltd [1974] 3 WLR 91
Smith vs. Hughes [1871] LR 6 QB 597
Unfair Contract Terms Act 1977
Vernon vs. Bethell [1762] 28 ER 838
Zhang, M., 2019. Breach of Contracts and Remedies. In Chinese Contract Law-Theory &
Practice (pp. 345-380). Brill Nijhoff.