ABSTRACT
Over the years the courts had started to show a readiness to award a claimant damages for the negligence of designers and/or contractors, even if the claimant did not have a direct contract with the contractor, ie, was not in privity of contract. Thus expanding the area of negligence claims beyond that of just the original employer. However, in the late 1980s the courts took a more stringent position, which held that it was not possible to recover damages for negligence in relation to defects in buildings, as such damages were economic losses, which are not recoverable in tort. The two key decisions in this regard were the House of Lords decisions in D&F Estates v Church Commissioners559 and Murphy v Brentwood District Council.560 After these two cases it was clear that owners and those occupying buildings, such as tenants, needed a contractual method with which to claim damages against either the designers and/or contractors. These sorts of claims had to be based in a breach of contract and as they had no privity of contract with either the designer or contractor such claims would fail. This problem extended to not just subsequent owners and occupiers but also to those providing the funds, other purchasers and those who had any other interest in the building or project that was constructed. Thus, the development of collateral warranties created the contractual relationship needed.
