BetterLawNotes-5 (2)

CONTRACT LAW

Freida needs more storage space for her belongings. She decides to have an extension to her house built. Otto agrees to carry out the work at a total price of £75,000 to include all labour, materials and fittings. Freida signs a document prepared by Otto headed ‘Schedule of Works’. This contains the detailed specifications for the project. At the bottom of the document are printed the words: ‘Work subject to terms and conditions: copies available on request.’

The extension is soon completed. A month later, a heater in the extension explodes. Freida is injured and some of her belongings are badly damaged. The heater had been supplied and installed by Otto but manufactured by a third party. It subsequently emerges that the heater contained a hidden manufacturing defect.

A week later several tiles fall off the extension roof. One tile hits and damages the motorbike parked below belonging to Freida’s aunt, Agatha. Another tile strikes Freida’s cat, Tabitha. The ensuing visit to the vet lands Freida with a £500 bill. It turns out that Otto failed to attach the tiles properly to the roof structure.

When Freida demands compensation, Otto insists he is not liable and refers Freida to his terms and conditions. Clauses 1 and 2 of these read as follows:

‘1. Otto shall have no liability for loss or damage arising out of any defect in goods or equipment supplied, but not manufactured, by Otto.

2. Otto’s liability for loss or damage arising out of his negligence shall not exceed £100.’

Advise Otto on any contractual liability he may have.

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