Deep Blue Pools Ltd is a company that manufactures and installs high-quality swimming pools. It contracted with Gainsborough Construction Ltd to build swimming pools for ten luxury properties. In the contract they specified that the depth of the pools should be 2.4m, but after their installation, it became clear that each pool was shallower by 25 to 50cm at different points. Deep Blue Pools Ltd received £265,600 to do the work. However, after their installation, the measures according to the contract were not exact to those stated in the contract that the two parties agreed upon. The two companies explicitly agreed on the characteristics of the swimming pools. The company that should build the pools according to the contract terms failed to do so. They breached the contract, which means they failed to perform a contractual obligation. For this reason Gainsborough Construction is claiming £312,680 to demolish and rebuild the pools with a depth of 2.4m.
Thank you for contacting us to help you with your legal question. From the description of the facts of the case can be concluded that the Deep Blue Pools Ltd breached the contract because they built the pools shallower than the depth of 2.4m specified in the contract. This can interpret that Deep Blue Pools Ltd has breached the contract because they did not build the pools in the size that the both parties had agreed on. The other party did not respect the essential term of the contract. This is the reason why the breach of the contract leads up to the inefficiency of the contract. The depth of the swimming pools is a requirement stated in the contract. The final depth of each of the pools that were built by Deep Blue Pools Ltd was not the same as the depth specified and contracted by the parties. Shallower pools are not suitable for the intended use. Future users of the pools can be injured because the depth of the pools is not safe for diving.
There would also be loss of enjoyment. The constructed pools are defective and Deep Blue Pools Ltd has caused losses of value to luxury properties for the company of Gainsborough Construction Ltd which can also cause the loss of company’s credibility for prospective buyers. According to the Sale of Goods Act 1979 Section 53 (1), which is important for our case, the buyer is not only entitled to reject the goods, but he may maintain an action against the seller for damages for the breach of warranty. Section 53 (2) sets the measure of damages for breach of warranty as the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty. Accordingly you can assert your right by claiming damages.
In contract law the assessment of damages is subject to the requirement of reasonableness which requests an assessment of the claimant’s purposes in contracting, whether the claimant has cured or intends to cure and the proportionality between the cost of cure, the contract price, the benefit already received by the claimant, and the benefit which cure would add to that benefit. In line with your purpose to demolish and rebuild the pools to the proper depth the amount that you are claiming is appropriate. To these arguments the opposite party can contradict that each pool is still save for diving and there would be no loss of enjoyment because of the smaller depth of the pools. In this case the Court will decide which party’s arguments are more valid.
Another and probably more suitable possibility that you have is to try and negotiate with the opposite company and find a better solution that would suit both parties. Section 53 (1) determines that another possibility you have is to set up against the seller the breach of warranty in diminution or extinction of the price. So you can settle with the opposite company for them to lower the contract price of the pools or for them to rebuild or repair the pools at their own expense and pay the potential damages that could arise from it. It is always better to keep good relations with business partners. So we would recommend you to try and resolve the dispute in an alternative way so that the public reputation of the company stays intact. If you have any other question please do not hesitate on contacting me.