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Homeowner Awarded Damages Resulting From Architect’s “Ambiguous” Contract

Contract and pen
4th September 2015

A couple won damages against their architect for negligence in failing to properly supervise a building contractor’s renovations to the ground and lower floor of their home, which was later found to be sub-standard and needing extensive remedial repairs.

Unfortunately, the contractor had become insolvent so proceedings were started against the architect’s practice to recover costs for the various losses.

The court heard that extensive damp in the lower floor was discovered when the couple moved in after the building work was completed. An independent investigation revealed inadequate waterproofing, defective floor slabs and serious problems with newly installed mechanical and electrical services, which had to be removed and replaced.

The defendant architect argued that the contract between themselves and the claimant home owners contained a ‘net contribution clause’*, stating their liability for “loss or damage would be limited to the amount it would be reasonable to pay in relation to the contractual responsibilities of other contractors appointed by the claimants.” 

The defendant had not explained the meaning and effect of the clause to the claimants and the clause was not negotiated between the two parties.

Clause did not limit liability

The judge decided that the inclusion of the clause, a procedure recommended by the RIBA (Royal Institution of British Architects), was not considered to be “taking advantage” of the claimants but, nevertheless, was “ambiguous.”

Communications between the parties suggested that the clause was understood as only referring to “other contractors” and specialists appointed directly “by the claimants” and did not include the main contractor.

The defendant architect was found liable for design defects, a failure of their inspection duties and to properly co-ordinate the works. Consequently, the judge found that the clause did not limit the architect’s liability to the claimants for the whole of their loss and also awarded compensation for the homeowner’s distress and inconvenience.

* A net contribution clause is designed to limit a party’s liability to the proportion of loss, which is fair/reasonable for the party to pay taking account of other parties who share liability for the same loss. A clause may not limit liability if it is not properly drafted to include all those parties who share liability for the loss.