1. I don't understand the boldened phrase at the bottom of the quote. Recoverability of cost or repair may affect the quantum of damages awarded by the judge, but why ought recoverability affect how the obligation broken would have been treated?

  2. Please see the question in the title.

Poole, Shaw-Mellors. Contract Law Concentrate (4 ed 2019). p 157.

When can the cost of repair be awarded?

Ruxley Electronics and Construction Ltd v Forsyth (1996) (HL)

FACTS: The D employed the P to build a swimming pool and specified the maximum depth and the depth at a point for diving. The swimming pool depths did not meet these requirements but were safe and there was no difference in value as a result. The D argued that he should be able to recover £21,560 to demolish and rebuild the swimming pool to the depths specified in the contract.

HELD (agreeing with the trial judge): The cost of demolition and rebuilding was refused. Instead the HL awarded damages of £2,500 for loss of amenity (recognizing concern over diving depth).

• Recovery of cost of replacement had to be reasonable, i.e. not out of all proportion to the benefit to be obtained.
• Intention to rebuild was relevant to assessing the loss for which compensation was required— and hence was relevant to the reasonableness of awarding cost of replacement.

Cost of replacement tends to be relevant to land and buildings on land. It has the effect of guaranteeing the result of the obligation. Thus if a surveyor is employed to survey a property but fails in his duty to exercise reasonable care and skill (breach of qualified obligation)—so missing property defects which need to be rectified—usually only the difference between the price paid (at least where the purchase price is the market value for the property as represented) and the actual value of the property can be recovered (Watts v Morrow (1991)) [summary]. If cost or repair were recoverable, the obligation broken would have been treated as if a guarantee.

1 Answer 1


why ought recoverability affect how the obligation broken would have been treated?

Because, according to Lord Mustill's assessment of Ruxley, when it comes to award of recovery there is only one measure of damage: the loss truly suffered by the promisee. There, he distinguishes between contracts for a purely commercial purpose and those which involve --at least in part-- a non-commercial purpose. In the latter scenario, the loss "is usually incapable of precise valuation in terms of money, exactly because it represents a personal, subjective and non-monetary gain".

A guaranty would have preempted that incapability of, and actually the need for, making a precise monetary valuation. That would hold true even if the good or service at issue were acquired only for non-commercial purposes, such as personal leisure. At least from the portions of Ruxley I have read, the parties don't appear to have entered a clause in the sense of guaranty or remedies in the event of departure(s) from pool specs.

If cost or repair weren't recoverable, then how would've the obligation broken been treated?

The aforementioned inability to ascertain actual losses prompts the need for a criterion of reasonableness when awarding recovery.

In Ruxley, that criterion allegedly took the form of compensating for customer's subjective loss of amenity. The customer's alleged losses were not susceptible to quantification. Furthermore, the courts concluded that the departure from contract specs would hardly have an impact on the financial value of his house compared to the scenario of strict compliance with said specs.

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