Cases - Day v Ost
Record details
- Name
- Day v Ost
- Date
- [1973]
- Citation
- 2 NZLR 385
- Legislation
- Keywords
- Contract adminsitration
- Summary
-
The New Zealand Supreme Court considered an allegation that an architect had assumed a duty of care to a subcontractor by giving him an assurance that he would be paid by the employer.
The plaintiff, a block-laying and plastering subcontractor, stopped work because he had not been paid. The defendant architect requested the plaintiff to resume work and assured him that he would receive the progress payment of $1,000 and that the employer had ample funds to cover the balance of his contract price. In reliance on this assurance, the plaintiff completed the work but received only the progress payment, not the rest of his contract price.
The court held that by, giving this assurance, the defendant had voluntarily assumed a responsibility towards the plaintiff to take reasonable care that his assurance was true. In fact, the defendant had been aware that the employer had not set aside sufficient money to cover the plaintiff's contract price. Accordingly, the defendant was liable for breach of a duty of care to the plaintiff. The measure of damages was the loss suffered by the plaintiff after resuming work.