What is the Prevention Principle?

The Prevention Principle was defined in the case of Barque Quilpe Ltd v. Brown (1904),

as follows:

There is an implied contract by each party that he will not do anything to prevent the other party from performing a contract or to delay him in performing it.

I agree that such a term is generally imported into every contract by law.

In the more recent Canadian case of Perini Pacific Ltd v. Great Vancouver Sewerage and Drainage District (1996), it was said:

Since the earliest times, it has been clear that a party to a contract is exonerated from the performance of a contract when that performance is prevented or rendered impossible by the wrongful act of the other party.

The principle can be traced back in construction contracts as far as Holme v. Guppy (1838). This case involved the construction of a brewery in Liverpool. The employer failed to provide access to the site on the contractual date and this was regarded as an act of prevention.

This has led to the general view that when acts of the employer prevent the contractor from achieving completion by the date of completion if there is no contractual machinery to extend the date for completion:

• The contractor is excused from completing by the date for completion.

• There is no date from which to calculate liquidated or delay damages.

• Time is left at large and the contractor is obliged to complete within a reasonable time.

• Whilst the employer will be unable to levy liquidated or delay damages, unliquidated damages may be charged, in other words, such costs and losses that the employer can demonstrate resulted from the failure on the part of the contractor to complete

within a reasonable time.

Contracts which have been drafted with no provision for granting the contractor an entitlement to extensions of time due to delays caused by the employer or his architect or engineer may attract the Prevention Principle.

Reference: 200 Contractual Problems and their Solutions, Third Edition, Roger Knowles

Categories: : Contract Administration