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Clarke Williams Ltd Insurance Brokers

Contract protects architects from full impact of claim

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.

For an independent review of your Professional Indemnity Insurance contact our indemnity specialists today on 01732 252 898 or email info@clarkewilliams.co.uk

Content provided by Warners Solicitors.

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    Clarke Williams Ltd are authorised and regulated by the Financial Conduct Authority under reference 758683. The Financial Conduct Authority’s Register can be accessed through http://www.fca.org.uk/ . We are registered in England and Wales with Companies House under number 10317065. Our registered office address is Blue Bell Court, Sovereign Way, Tonbridge, Kent, TN9 1FU.

    Clarke Williams Ltd
    Blue Bell Court
    Sovereign Way
    Tonbridge
    Kent
    TN9 1FU

    Tel: 01732 252 898

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