Civil Engineering Reference
In-Depth Information
In the leading case of
Davis Contractors Ltd
,theHouseofLordsheldthatacon-
tract which had been scheduled to take eight months, and was said to be subject to
there being adequate supplies of labour available as and when required, but which
took 22 months to complete due to unanticipated shortages of labour and materials,
hadnotbeenfrustrated.hequaliicationastotheavailabilityofadequatesupplies
of labour was contained in a letter which accompanied the contractor's tender. That
letter was held not to form part of the contract and the contractor had to bear the
additional costs.
Nevertheless, there may be circumstances where modifications, which necessarily
and fundamentally alter the whole design of a project, frustrate the original contract
andentitlethecontractortoaclaimbasedupon
quantum meruit
. This is considered
more fully in Section 8.4. he absence of intimation by a contractor that he is proceed-
ing upon a
quantum meruit
basis may be an important element in deciding whether
there has, in fact, been frustration.
Anotherexampleoffrustrationiswheretheperformanceofacontractisdependent
upon a certain thing existing and that thing is either destroyed or is so fundamentally
altered that the contract cannot be performed. This is known as
rei interitus
.Ifthis
occurs prior to the contractor taking possession of the site, then neither party will have
a claim against the other. If it occurs when building works are underway, the contrac-
tor has a claim for the work carried out and the materials supplied. By the doctrine
of accession, property in the building passes to the owner of the ground upon which
it is erected and the contractor's entitlement to payment arises under the principle
of
res perit domino
(a thing perishes to its owner). A contractor may not be entitled
to payment if the work carried out is so defective that the employer would have a
defence to an action raised against him. If payments have been made in advance and
the contract is subsequently frustrated, the payments made can be recovered under
the doctrine known as
condictio causa data causa non secuta
(a claim that the consid-
eration has failed of its purpose), see
Cantiere San Rocco, SA
v.
Clyde Shipbuilding and
Engineering Co. Ltd
(1923).
Where the contract is frustrated, it is more accurately parties' rights and obliga-
tions as to future performance under the contract that are frustrated. In the context
of building contracts this distinction is important as, even after frustration, certain
clauses, most notably arbitration clauses, may continue to be enforceable, see
Heyman
and Another
v.
Darwins Ltd
(1942). The same position is likely to prevail with adjudi-
cation clauses, see
A & D Maintenance and Construction Ltd
v.
Pagehurst Construction
Services Ltd
(2000).
In
Robert Purvis Plant Hire Ltd
v.
Alex Brewster & Sons
(2009), it was held that a
planning enforcement notice which prevented the intended use of a site was not a
supervening event which frustrated a contract for the lease of that site. The tenant
argued that the enforcement notice prevented the use of the land as specified in the
user clause of the lease, but the court rejected this argument, holding that there was
nosuperveningeventastheplanningstatusofthesitehadbeenknownatthetime
the lease was entered into.
