Lloyds Bank Plc v Waterhouse, [1993] 2 FLR 97, EWCA
Citation:Lloyds Bank Plc v Waterhouse, [1993] 2 FLR 97, EWCA
Rule of thumb:If you a product (such as a house or product, like a ship) which has still to be manufactured or constructed, does this matter if you then have to sue under it? Yes, if the product is not yet manufactured/constructed, this is a contract for services, meaning that the laws are different – heritable & movable property law do not apply to it.
Judgment:
: Care has to be taken to ensure that the contract was for the purchase of a movable product and not services to make the product, which is a different type of action, Where someone buys a form of movable property that is not yet ready, this is a contract for services and not a contract for movable property. Where someone cancels a contract for building services the person who was carrying out the service is entitled to payment for the work they have done, even if the final end result was not achieved, ‘Much of the plausibility of the argument on behalf of the guarantor seemed to me to be derived from the assumption that the contract price was simply a purchase price. That is not so, and once that misconception has been removed I think it is clear that the shipbuilding contract has little similarity with a contract of sale and much more similarity, so far as the present issues are concerned, with contracts in which the party entitled to be paid had either performed work or provided services for which payment is due by the date of cancellation. In contracts of the latter class, which of course includes building and construction contracts, accrued rights to payment are not (in the absence of express provisions) destroyed by cancellation of the contract.’ Lord Fraser
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.