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Cooperative Insurance Society v Henry Boot Scotland Limited (2003) CLJ 19

Co-operative Insurance Society Ltd (CIS) was the freehold owner of the property at Lomond House, 9 George Square, Glasgow. Under a contract dated 1 September 1995 made between CIS and Henry Boot Scotland Ltd. (“Boot”) Boot agreed to perform for CIS the works described in the Contract as “demolition (including façade retention), design and reconstruction at and of Lomond House, 9 George Square, Glasgow.” On 13 - 14 March 1996, during the carrying out of the Works, water and soil flooded into sub-basement excavations. There were several sub-contractors involved in the contract and the issue in this case was, not whether a liability existed, (which it clearly did) but the construction of the contract. This included the duty of the contractor(s) to check an employer's pre-existing design to be satisfied that it would produce a completed design capable of being constructed. -

Ruxley Electronics & Construction Limited v Forsyth (1995).AC344

Mr Forsyth engaged the plaintiff builder to build a swimming pool. It was an express term of the contract that the deepest point of the pool should be 7ft 6in. When constructed the maximum depth of the pool was only 6ft 9in. The trial judge thought it unreasonable for the pool to be demolished and rebuilt and awarded Mr Forsyth £2,500 as special damages for loss of amenity. The Court of Appeal disagreed and awarded Mr Forsyth £21,560, the full cost of demolishing and rebuilding the pool. The House of Lords held that the cost of reinstatement was economically wasteful and not the only possible measure of damage for defective performance under a building contract. In this case it was not the appropriate measure of damage where the expenditure would be out of all proportion to the benefit to be obtained. Accordingly the House of Lords held that Mr Forsyth was not entitled to the cost of demolition and rebuilding the pool. Further there was no diminution in value as a result of the pool being 9in shallower than it should have been. The House of Lords also held that the trial judge had been entitled to make an award for loss of pleasure and amenity on the grounds that the contract was one for the provision of a pleasurable amenity. -