Cost of Cure CASES
In English law, cost of cure is a measure of damages awarded to compensate a claimant for the expense of rectifying defects or incomplete work arising from breach of contract.
Definition and Principles
The cost of cure seeks to put the injured party in the position they would have been had the breach not occurred, specifically covering costs required to remedy defects or bring work up to the agreed standard.
Key Considerations
- Awarded when rectification is reasonable and proportionate.
- Alternative to diminution in value, typically when repairs or completion are practical.
- Courts consider reasonableness compared to overall benefit and cost.
Common Contexts
- Construction or building contracts.
- Defective workmanship or incomplete projects.
Practical Importance
Understanding cost of cure aids parties in assessing potential liabilities and managing expectations regarding rectification and remedy costs in contractual disputes.
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A contractor built a swimming pool shallower than specified. As there was no loss in financial value, the court denied the full rebuilding cost, instead awarding damages for 'loss of amenity'. This established a reasonableness test for contractual damages. Facts Ruxley Electronics and Construction Ltd (the appellant builders) entered into a contract with Mr Forsyth (the respondent owner) to construct a swimming pool in his garden for £17,797.40. The contract specified that the pool should have a diving area with a depth of 7 feet 6 inches. After completion, it was discovered that the diving area was only 6 feet
A purchaser covenanted to build a wall on her land adjoining the vendor's but failed to do so. The court held that the correct measure of damages was the cost of building the wall, not the lesser amount by which the vendor's property value was diminished. Facts The plaintiff sold a plot of land, part of his larger property, to the first defendant. A term of the sale, included as a positive covenant in the conveyance, required the defendant to build a brick wall of a specified type on the boundary between the plot sold and the plaintiff’s retained land.
