So until a judge rules the breach or variation is not a certainty? If a breach had been established and the breach is less than 1% of the contract value they would struggle to reject? Had they not achieved the third party contract the breach would have resulted in the installation being unusable and they could have rejected but that is not the case. Ruxley also didn't get "expectation" damages either they got a third option? Loss of amenity, but how was loss of amenity any easier to work out than loss of expectation surely they would be similar? If there is a loss. The cost of replacing what has caused the loss is say £200 however as a proportion of the investment the loss is £540 something, which has been offered. If we then look at expectation they are then considering the prediction of a forward loss on the income the investment will return. OK -There was no certain knowledge at the time that the breach would have caused the client loss. Technically it would have improved their likelihood of achieving the prediction of return and the product replaced was of higher value not lesser without charge. The client will have to also factor the cost of litigation for the benefit he expects to gain from the litigation and likelihood of realising that benefit which he may or may not be entitled to. Thank you Steampowered. I would add to your Rep but I seem unable to. I think you have been very explanatory and helpful without knowing the whole story.

I understand. What you are saying here there is nothing requiring variation in writing as far as I am aware. I think the acceptance of the variation is confirmed by the acceptance of the certificate specifying the part that was changed, and the system as installed rather than as per the contract was specified in the application with a third party whose contract the client had to sign. It's after that that things are complicated by several events. However the client in accepting a compromise offer with the third party still using the variation in equipment specified again acknowledged the system was different to the contract, however whether this is relevant/material to the original occurrence I don't know, or whether this is viewed as separate to that. Ruxley v Forsyth you mentioned earlier the client didn't terminate the contract I presume they wouldn't have been able to because the overal pool fulfilled most of the expectations albeit it was marginally shallower than they wanted it didn't prevent them using it. So I am a little confused here, the court looks at the overal use of the pool as not being materially affected, although the particular of the breach is that the pool is a percentage smaller than specified? In this instance the expectation is surely the prediction of the non guaranteed performance, should it outperform this that is a bonus not an expectation? No it is not a maintenance issue. In that case it still exists as HMTax have prevented the dissolution. However the company has not traded since it was set in dissolution and has no assets. it cannot afford to defend itself in court nor would it be able to pay any settlement imposed as it has no assets. Hmtax are unsecured creditors(although I explained they are apparently not owed anything) and presumably any settlement imposed by any court for the third party would be as an unsecured creditor? Thank you that is very helpful. I am hoping I will be allowed to provide a more explanatory answer to the breach aspect but I am grateful for that which has been provided. I know it is quite complex and resolves around terms in a third legislative document that are not clear.

Hi Steampowered, i wonder if you could possibly comment further or if anyone else can help further on this issue? Many thanks

Thank you Steampowered for your further comments. What constitutes consent? If the Variation was verbally agreed, and on that basis the client then used the variation to form a new contract with a third party, although the Installers contract was not changed in writing The client new, all recorded certificates applications and contracts thereafter were based on the variance and signed or accepted by the client, can the client absolve themselves of any knowledge and responsibility/acceptance for the change? It's the non quantifiable nature of the calculation, the original indicator of performance was not guaranteed, the system is out performing, technically there is no loss only a gain. Each year the system can be assessed to compare with the predicted figure, if it is less than this then its a loss but that could be affected by factors outside of the control of the system, equally it could return a gain. Any figures produced are purely predictive but the likely hood is the system will not form a loss. Therefore should a calculation be done each year to see if there is any loss or gain? Should that be relied upon to predict future loss or gain? That is why the clearest means is on the cost of purchase where it can be represented by the cost of purchase for the size of the system. proportionately reduce the cost of the system by the proportional change is size as a direct ration? The client is then left with the same loss or gain risk as he had before for an exact proportional value of investment. At the time they of dissolution the business wasn't viable, they had lost their investment in time and equipment etc, they had no creditors and decided to DS01. The company hasn't traded since and complied with DS01. This current issue over compensation cam up 6 months after the DS01, unfortunately hmtax decided they hadn't received a payment despite knowing they had, and despite bank sending proof, wouldn't accept it until they found it in their system. This prevented the DS01 completing so now the company is technically dissolved but still and entity. Ok this is difficult as the directors are not callous and want to do the right thing but equally I see that this alos opens a can of worms linking them to a separate legal entity? yes agreed I think that is answered above. Thank you again it is finding a balance between doing things right and trying to be fair and being legally covered. I think you are saying that blurring those lines between personal and company are a line to avoid. But are you saying if a totally goodwill offer were made that would be outside any comeback between the directors and the company? Thank you again

sorry it was apparently being dissolved under DS01 not administration. Don't apologise please.

Firstly thank you for your response. The installation was performed over a year ago and at no time has the client suggested they considered the company in breach, until now. However they are unlikely to wish to terminate as the instalaltion is performing better than designed and will not cause them a loss. I understand that if it terminates that it would be liable for the full cost of purchase which is much more. However you consider it a breach and not a variance why is that? because the loss the client would have is based on a non guaranteed performance, and it is expected the modified installation would still meet the original guidance set out in the contract. Certainly the first year it made 15%+ above the projected non guaranteed return, the modification will likely mean it will still make 10% above in future. There is no guarantee of a return only a best guess. I understand, I will ask if I can be a little more explanatory. Agreed but the point was if it were awarded £650 then that is less than the cost involved in seeking a higher amount than the £550 the £550 is directly quantifiable as a proportion of the whole cost of the contract. There is no basis for negligence on what basis can the directors be pursued? I think the directors were willing to pay up the client for restitution but would balk at a speculative loss. - yes my mistake the company is in dissolution (ceased trading)for almost a year through no direct fault of the directors but through a change in gov policy, but has no assets or a means to defend themselves. I believe there is only one secured creditor hmtax who has put the dissolution in suspension.

Hi, My colleague is offering a client restitution for a variance in contract, without accepting liability. However if they reject this and pursue loss of performance then this is much harder to quantify due to a number of variables but in exploring this may we speculate?: if a speculative loss were deemed to be acceptable as a basis for compensation, and the maximum loss were say to be £1300 over the 24 year period, would this figure need to be paid upfront for losses that may or may not occur in the future OR would the £1300 be due as a sum that would delivery £1300 by year +24 if invested and an allowance for inflation made? eg £650 invested at 5% with 2% inflation would return close to £1300 in 24 years. So would the figure paid be £650 or £1300? However, Were the client to reject outright restitution: The company is a limited company, it is endeavoring to pay full restitution (lets say that us £550) but it has no assets and is currently in administration and unlikely to trade again, the directors would want to see the client paid as the honourable thing to do and may consider a personal sum to cover that, although under no legal obligation to do so. As this is now a dispute the client will have to be informed as to the status of the company. But there would be little point taking the company to court as it is unable to defend itself the client could win in court either by default or on merit of its claim, the company would be unable to pay or afford to defend itself it would receive judgement against it and the debt would be filed against the company with the client unable to recover. In fact the client could win but the court find the company's original offer was fair and reasonable and consider the claim at worst vexatious or at best misguided and might consider it a waste of the courts resources?