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Review Your SQE 1 Practice Records

Examination Timing: 00H00M01S

Mr. Spencer contracted with BuildWell Ltd for the construction of an extension at his home, including a garage specified to be 28' wide and 14' deep. Upon completion, the garage measured 27' wide and 13' deep. Mr. Spencer has issued court proceedings against BuildWell Ltd, claiming £50,000 for demolishing and rebuilding the garage to the correct specifications and for the cost of storing his car off-site due to the garage being "unusable." You have been instructed to advise BuildWell Ltd in the defence of the claim. 


Which of the following is the best description of your client's position on quantum?

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The best description of BuildWell Ltd's position on quantum is that the contractor can defend the claim in part on the basis that Mr. Spencer is entitled to claim for difference in value or loss of amenity, rather than the full cost of reinstatement. The principle here is derived from the case Ruxley Electronics and Construction Ltd v Forsyth [1995] UKHL 8, which established that damages for breach of contract are intended to place the claimant in the position they would have been in if the contract had been performed as agreed. This can be assessed by the difference in value between what was provided and what was contracted for, or by considering loss of amenity if the cost of reinstatement is disproportionate to the benefit gained. In this scenario, the cost of demolishing and rebuilding the garage to gain an additional foot in width and depth is likely disproportionate to the actual benefit Mr. Spencer would receive. Therefore, the court is more likely to award damages based on the difference in value of the garage as built compared to the garage as specified, and possibly for any loss of amenity due to the garage being smaller than expected. BuildWell Ltd should thus be prepared to offer a settlement reflecting these principles to avoid the cost of further litigation. 


Key Point: In cases where the cost of reinstatement is disproportionately high compared to the benefit gained, the court may award damages based on the difference in value and/or loss of amenity. This approach ensures that remedies are reasonable and proportional to the actual loss suffered by the claimant.

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