Author: Justin Mendelle and Tola Odedoyin
It is common for parties to a construction contract to apportion risk and limit liability by specifying the damages that one party will be obliged to pay to the other in the event of a breach.  However, it is by no means straightforward to always capture commercial intentions with precise legal drafting, as demonstrated by the fact that the Court of Appeal took a different view to the High Court.


Authors: Amy Brown

Background

In 2007, Mr Dhanoa, operating through his four companies (the “Claimants”), engaged Fosters (the “Defendant”) as architects to design a luxury 5-star hotel at London Heathrow. According to Mr Dhanoa, he told Fosters that the scheme must be designed within a budget of £70 million. Just a few months later, costs consultants EC Harris costed the design at £195 million. Mr Dhanoa then increased his budget to £100 million, allegedly in reliance upon Fosters telling him that the scheme could be ‘value engineered’ down to that figure.