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Spiersbridge Property Developments Limited v Muir Construction Limited [electronic resource]

Language: English Publication details: 2008Subject(s): Online resources: Summary: [2008] ScotCS CSOH 44, 14 March 2008. The case considers whether an employer who calls a performance bond is obliged to account to the contractor for any overpayment. The pursuer, Spiersbridge Property Ltd (Spiersbridge) entered into a building contract with Muir Construction Ltd (Muir). Muir gave Spiersbridge an on demand performance bond (the Bond) from the Royal Bank of Scotland (the Bank). On 14 November 2006, Spiersbridge requested the bank for a bond alleging various breaches of contract from Muir. The bank made the payment and claimed back to Muir the amount paid to Spiersbridge. Muir argued that there was no breach of contract on his part; that Spiersbridge had no proper basis to ask for that money and requested that the sum paid by him to the bank should be reimbursed to him by Spiersbridge. There was no provision in the bond or the Building contract under such circumstances. The Outer house had to decide whether the entitlement to repayment of excess arose under the Bond or the Building contract. Held: The Court decide that the repayment term should be implied in the Building Contract.
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Law report Virtual Online ONLINE PUBLICATION (Browse shelf(Opens below)) 1 Available 145103-1001

[2008] ScotCS CSOH 44, 14 March 2008. The case considers whether an employer who calls a performance bond is obliged to account to the contractor for any overpayment. The pursuer, Spiersbridge Property Ltd (Spiersbridge) entered into a building contract with Muir Construction Ltd (Muir). Muir gave Spiersbridge an on demand performance bond (the Bond) from the Royal Bank of Scotland (the Bank). On 14 November 2006, Spiersbridge requested the bank for a bond alleging various breaches of contract from Muir. The bank made the payment and claimed back to Muir the amount paid to Spiersbridge. Muir argued that there was no breach of contract on his part; that Spiersbridge had no proper basis to ask for that money and requested that the sum paid by him to the bank should be reimbursed to him by Spiersbridge. There was no provision in the bond or the Building contract under such circumstances. The Outer house had to decide whether the entitlement to repayment of excess arose under the Bond or the Building contract. Held: The Court decide that the repayment term should be implied in the Building Contract.