Civil Engineering Reference
In-Depth Information
foreseeable at the time the contract is entered into, see Section 10.4.2. The reasoning
behind this distinction is that in a contract there is the opportunity for one party to
obtain protection against a particular type of potential loss by directing the other
party's attention to it before the contract is made. In cases arising out of delict there
is no such opportunity.
10.10.3 Economic loss
As a general rule, the losses claimed in delict must not be too remote. This means
that damages for personal injury, death and loss of or physical damage to property
(and economic loss flowing from such loss of or physical damage to property) arising
from a breach of duty would normally be recoverable. However, the right to recover
economic loss in the absence of physical damage is a particularly problematic area. A
detailed examination of the issue is beyond the scope of this topic, but the following
is a brief overview.
A convenient starting point, which illustrates the type of situation in which mat-
ters of this nature arise, is the decision of the House of Lords in the Scottish case of
Junior Books Ltd
v.
he Veitchi Co. Ltd
(1982). In this case the pursuers owned a fac-
tory. They entered into a contract with builders for, among other things, the laying
of flooring in the factory's production area. The builders sub-contracted this work to
the defenders, who were specialist flooring contractors. The pursuers subsequently
raised an action against the defenders, seeking damages for loss allegedly sustained as
a result of their negligent workmanship. This loss included the cost of replacing the
floor surface, allegedly defectively laid; storing goods and moving machinery during
the period of replacement; paying wages to employees unable to work during this
period; and fixed overheads which would produce no return during this time.
The pursuers also claimed for loss of profit sustained by the temporary closure of
the business. They argued that the defenders, as specialists, knew what products were
required; were alone responsible for the composition and construction of the flooring;
must have known that the pursuers had relied upon their skill and experience; and
must be taken to have known that if they did the work negligently, the pursuers would
suffer economic loss in requiring to expend money to remedy the resulting defects.
The pursuers did not argue that actual or prospective danger to persons or property
arose from the state of the flooring. If they had done so there would have been a duty
of care under the principles laid down by
Donoghue
v.
Stevenson
(1932).
The defenders argued that the case was irrelevant in law. They contended that the
lawdidnotmakethemliableindelictforthecostofreplacingtheloororforeco-
nomicorinanciallossconsequentuponthatreplacement.heyarguedthatwhile
they were under a duty of care to prevent harm being done to property or persons by
their faulty work (in accordance with
Donoghue
),theyhadnodutyofcaretoavoid
such faults being present in the work itself. hey argued that for the court to hold oth-
erwise would extend the duty of care owed by manufacturers and others far beyond
the limits to which the courts had previously extended them; and that a manufac-
turer's duty not to make a defective product set a standard of care which was much
lesseasilyascertainedthanthatforadutynottomakeadangerousproduct.
