When a couple engaged a firm of architects to manage the refurbishment of their house, the architects inserted a ‘net contribution clause’ into the contract. The intention of the clause was to limit the liability of the architects to the extent to which any defects in the work were their responsibility rather than that of builders or contractors engaged.
In the absence of such a clause, the principle of ‘joint and several liability’ would apply, which could make the architects or the builders liable for the full cost of any rectification works.
When defects were discovered, the couple sued the architects, the builders involved having gone out of business. The couple claimed that the net contribution clause was invalid and advanced arguments based on the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999.
Their argument failed in the Court of Appeal, which accepted that the negotiation of the contract was ‘between equals’ and that the agreed contract terms could not therefore be considered to be unfair because of an imbalance of negotiating power. The couple now face substantial legal fees as well as the bulk of the rectification costs.
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