The surge in construction work in Auckland and greater New Zealand has contributed to a significant increase in the amount of case law in the building and construction law area.
One issue that often arises is how far is a contractor required to go when something goes wrong.
A recent High Court decision shows the risks of a contractor failing to adequately install or provide equipment necessary to meet a specification.
A contractor had installed an underfloor heating system which it acknowledged was a breach of contract in that the design was defective.
The contractor raised a number of defences which included that (as is common in many terms of trade) its liability was limited to the cost of the defective product or supply of a replacement product of equivalent standard.
The High Court disagreed and said that the contractor was required to install equipment that would comply with and meet the necessary specification even if that resulted in a higher quality or more expensive product. The contractor’s argument that this would constitute betterment was discounted by the High Court. The High Court stated the contractor was required to do what was necessary to perform its obligations and meet the agreed specification even if that required a more expensive product than what was quoted and installed by the contractor.
This is a salient reminder to contractors to ensure that the appropriate investigations are done prior to commencement of the job and tendering so that there is no disconnect between what is required and what is priced and installed.
Farry and Co are able to advise on all aspects of building and construction for both contractors and customers.
If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:
Paul Farry
pfarry@farry.co.nz
09 379 0055 or 03 477 8870
The information contained in this publication is intended as a guide only. It does not constitute legal advice and should not be relied upon as such. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain.