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Project manager had a duty to take reasonable skill and care in procuring a signed construction contract

The works were completed under a series of letters of intent; consequently the employer did not have the benefit of a liquidated damages clause. The works were delayed and the employer claimed for damages against the contractor. Because it had no formal contract with the contractor the employer settled for a low sum. However, the employer successfully claimed damages against the project manager for the shortfall in what it would have been able to settle for if it had had a formal contract in place.

Significantly the court dis-applied the project manager’s limit on liability using section 3 of the Unfair Contract Terms Act 1977.
The project manager had breached its duty to exercise reasonable skill and care in procuring an executed building contract and could not rely on its limit of liability in the particular circumstances of the case.

Case: Ampleforth Abbey Trust v Turner & Townsend Project Management Ltd [2012] EWHC 2137 (TCC) (27 July 2012).

Jonathan Waters is the founder of Helix Law. Before qualifying as a Solicitor he worked in industry and in investment banking for over a decade. He was also the Partner in charge of Commercial Litigation, Employment Law and Property Litigation at Stephen Rimmer LLP. Jonathan has wide experience of helping and advising businesses to avoid or to deal with commercial disputes and in particular construction disputes.

This article is written to raise awareness of the issues it discusses and it may not be updated after it is first written, even if the law changes. It is not intended to be legal advice and cannot be relied on as such. Helix Law is not responsible or liable for any action taken or not taken as a result of  this article. If you think the matters set out affect you and you wish to apply them to your particular circumstances then we are happy to give you free initial telephone advice. 

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