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ARTICLE · 16 JULY 2019

Legal Developments In Construction Law - May 2019

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What if one party owns a defective new building but a different party originally contracted for its construction?

United KingdomReal Estate and Construction
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1. Court of Appeal revisits "black hole" fix for failure of performance for third party

What if one party owns a defective new building but a different party originally contracted for its construction? The first party has suffered the loss but the second party, which has the benefit of the contract and is entitled to sue, has suffered no loss. In the absence of a warranty or third party rights, does the loss fall into a legal "black hole" and the contract breaker enjoy a windfall? Over the years the courts have understandably struggled with this issue, the concept of "transferred loss", and in BV Nederlandse Industrie Van Eiprodukten v Rembrandt Enterprises, Inc. the Court of Appeal had to revisit the case law.

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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