Direct loss and/or expense - Building Contract Claims - page 88

The claimants claimed against the defendants in respect of alleged late
delivery and defective materials. They sought to recover:
(1) Loss of productivity
(2) Inflation costs resulting from delay
(3) The amount of a sub-contractor's claim for delay to his work.
The actual question in the case was whether such damages were to be
regarded as 'consequential' loss. The Court of Appeal held that the items
claimed were not excluded as 'consequential'. They were heads of direct
loss. Their lordships quoted with approval: 'on the question of damages, the
word ''consequential'' has come to mean ''not direct'' . . . ' 267 .
Croudace Construction Ltd was one of the cases considered by the Court of
Appeal in F. G. Minter Ltd v. Welsh Health Technical Services Organisation 268 ,
which affirms the view that, in the JCT contracts, the term 'direct loss and/
or expense' (and equivalent phrases in other contracts) in effect means that
what is recoverable is substantially the same as the damages recoverable at
common law according to the ordinary principles of damages under the first
limb of the rule in Hadley v. Baxendale 269 .
These principles apply to claims for direct loss and/or expense arising
under JCT contracts and under other contracts where similar phraseology is
used. It should be noted, however, that because the recovery of direct loss
and/or expense is a specific term of the contract, the recovery of certain
heads of claim may be permitted which might not be recoverable at
common law 270 .
267 Millar's Machinery Co Ltd v. David Way & Son (1934) 40 Com Cas 204 at 210 per Maugham LJ.
268 (1980) 13 BLR 7.
269 (1854) 9 Ex 341.
270 Some of the grounds for such contractual claims are not breaches of contract as an examination of
the 'matters' in JCT 98 clause 26.2 will confirm.