Engineers can't use 'overarching contract' defence to limit liability

A firm of engineers have been told they cannot use an ‘overarching contract’ defence to limit their liability for deficient work in a dispute with a homeowner.

The issue arose after the homeowner, Mr Elton, hired Buxton Associates (Consulting Engineers) Ltd to carry out engineering consultancy work.

He was dissatisfied with the work and his claim for compensation specified five separate engagements over three years: an initial appointment to carry out a survey; a second appointment to provide an impact study; a third appointment to carry out outline design services in relation to an extension and another structure to the rear of the property; a fourth appointment to provide advice in relation to conditions of the planning permission; a fifth appointment to carry out detailed structural design in relation to a garden room.

Elton claimed that when constructed the garden room design was discovered to be structurally deficient. He alleged breach of duty by Buxton under the fifth appointment.

Buxton asserted that the second appointment was subject to its standard terms and conditions which had been emailed to Elton.

It admitted that the design for the garden room was deficient but pleaded that the fifth appointment was subject to its standard terms as those terms had already been set out in the second appointment. This limited its liability for breach of duty to the sum of ten times its fee for its services.

It therefore admitted the claim but only up to the liability limit set out in its standard terms.

The court found in favour of Elton.

It held that Buxton’s defence had no real prospect of success. There were substantial difficulties with the single overarching contract analysis that proposed to make the fifth appointment subject to the same terms as the second when that was not made clear at the time. There were no adequate particulars of how such a contract was formed, what its terms were or where they could be found.

Please contact us if you would like more information about the issues raised in this article or any aspect of contract law.