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Modern Engineering (Bristol) Ltd v Gilbert Ash (Northern) Ltd; HL 1974

References: [1974] AC 689, [1973] 3 All ER 195
Coram: Lord Diplock
The court considered how to construe a clause in a contract which excluded a remedy provided by law. Lord Diplock said: ‘It is, of course, open to parties to a contract . . to exclude by express agreement a remedy for its breach which would otherwise arise by operation of law . . But in construing such a contract one starts with the presumption that neither party intends to abandon any remedies for its breach arising by operation of law, and clear express words must be used in order to rebut this presumption. Lord Diplock said: ‘in relation to the presumption that each party to a contract is entitled to all remedies which arise by operation of law: ‘To rebut that presumption one must be able to find in the contract clear unequivocal words in which the parties have expressed their agreement that this remedy shall not be available in respect of breaches of that particular contract.’
An equitable set-off for defective work is not easily excluded even in building contracts where sums are payable under an architect’s certificate.
This case cites:

  • Approved – Hanak v Green CA ([1958] 2 QB 9)
    A builder was sued for his failure to complete the works he had contracted for. The buider sought a set-off against that claim of three of his one claims. One, under the contract, was for losses from the defendant’s refusal to allow his workment . .

This case is cited by:

  • Cited – Astea (Uk) Ltd v Time Group Ltd TCC (Bailii, [2003] EWHC 725 (TCC), [2003] All ER (D) 212)
    The question of whether a reasonable time has been exceeded in performance of a contract is ‘a broad consideration, with the benefit of hindsight, and viewed from the time at which one party contends that a reasonable time for performance has been . .
  • Cited – Stocznia Gdanska S A v Latvian Shipping Co and Others HL (Times 27-Feb-98, Gazette 16-Apr-98, House of Lords, Bailii, [1998] UKHL 9, [1998] 1 WLR 574, [1998] 1 All ER 883)
    The parties had contracted to design, build, complete and deliver ships. The contract was rescinded after a part performance.
    Held: It remained appropriate for payment to be made for the work already done in the design and construction stages: . .
  • Cited – British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd ChD ([1980] QB 137, Bailii, [1978] EWHC QB 2)
    Money expended by a tenant on discharging his landlord’s covenants will in appropriate circumstances operate as a partial or a complete discharge so as to furnish a defence at law to a claim for unpaid rent; and where the tenant has suffered damage . .
  • Cited – Melville Dundas Ltd and others v George Wimpey UK Ltd and others HL (Times 08-May-07, Bailii, [2007] UKHL 18, [2007] 1 WLR 1136, [2007] 3 All ER 889)
    The appellant sought an interim payment for works of construction undertaken for the respondents under a JCT contract. The respondents contended that, having terminated the contract on their receivership, the contract and Act meant that the interim . .
  • Cited – Stocznia Gdynia Sa v Gearbulk Holdings Ltd CA (Bailii, [2009] EWCA Civ 75, [2010] QB 27, [2009] CILL 2708, [2009] BLR 196, [2009] 1 Lloyds Rep 461, [2009] 1 CLC 134, [2009] 3 WLR 677)
    Orders were placed for the construction of ships. They were not delivered. The buyer, the defendant, cancelled the orders. The defendants sought the loss of profit. The claimants said they were entitled only to the repayment of instalments. The . .
  • Cited – Geldof Metaalconstructie Nv v Simon Carves Ltd CA (Bailii, [2010] EWCA Civ 667, [2010] WLR (D) 146, WLRD)
    The parties contracted for the supply and installation of pressure vessels by Geldof (G) for a building constructed by Simon Carves (SC). The contract contained a clause denying the remedy of set-off. G sued for the sale price, and SC now sought an . .

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