Cases - Convent Hospital Ltd v Eberlin

Record details

Name

Convent Hospital Ltd v Eberlin

Date

(1988)

Citation

23 Con LR 112

Keywords

Contract administration

Summary

The defendants were a firm of architects who were sued by the claimant employers for failing to procure a performance bond for 10 per cent of the contract sum from the contractor. The contractor went into receivership during the course of construction works to extend a hospital in Nottingham. The architects joined the contractor as a third party to the proceedings, claiming that its director had misrepresented the true position vis-a-vis securing the requisite performance bond.

The court found that while the director had made fraudulent misrepresentations stating that the bond was being dealt with by the contractors' insurance brokers and that it would be provided imminently, this was not enough for the architect to claim a contribution from the contractor, as the misrepresentation did not induce the architect to allow and/or advise the employers to enter into the building contract.

The claim was rejected in the Official Referees' Court and also on appeal. The court held that the claim was not made out because:

• the first representation relied on was not made fraudulently, but was simply a statement of the price for which a bond could be purchased;
• Mr Roberts himself was not a party to the second representation, which, although fraudulent, was made by his quantity surveyor;
• the third and fourth fraudulent misrepresentations were made by Mr Roberts and were fraudulent but they did not induce the plaintiffs to enter into the construction contract.