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Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344

Forsyth contracted with Ruxley for the construction of a swimming pool in his garden with a diving area of 7 feet 6 inches deep at a price of £17,797. In breach of contract, the diving area was only 6 feet deep but was still suitable for diving and there was no adverse effect on the market value of the pool (i.e. the diminution in value was nil). The estimated cost of rebuilding the pool to the specified depth was £21,560 (representing the cost of cure). Their Lordships were of the opinion that if the court took the view that it would be unreasonable for the claimant to insist on cost of cure because the expense of the work involved would be out of all proportion to the benefit to be obtained, then the claimant was confined to the difference in value. Furthermore, the claimant's intention, or lack of it, to carry out the remedial works was relevant to the extent of the loss which was sustained since, if the claimant did not intend to cure the defect, he had lost nothing except the difference in value, if any. Where the diminution in value caused by the breach was nil, it was not correct automatically to award the cost of cure as an alternative to the difference in value, since it could not be right to remedy the injustice of awarding too little by unjustly awarding too much.