A employed by P to construct building on land belonging to UIP, an
associated company of P.
A therefore had strict legal obligations to P.
But A also had duty of care to UIP, because it executed a duty of care
deed in its favour.
Question for House of Lords: Were P allowed to claim damages from A?
Linden Gardens had established principle that party not suffering any loss might be able to claim on behalf of third
party for benefit of whom contract was entered into.
But in Linden Gardens third
party had no direct remedy, whereas here UIP did, on the duty of care deed.
House of Lords therefore held that where direct duty existed, contracting
party entitled to nominal damages only.
[This was so even though duty of care deed did not provide as good a
remedy as P would have had –
P could have sued for specific performance on the contract whereas UIP
can only sue for negligence of the duty of care deed]
[What impact would Contracts (Rights of Third Parties) Act 1999 have had
if case occurred now?
Would have allowed P and A to confer rights on UIP.
But A probably wouldn’t want to give strict obligations to UIP – would
just give duty of reasonable care.
Thus result would be same]