Holme V Guppy (1838)
The case of Holme v Guppy concerned the deduction of liquidated damages following late completion of carpentry and joinery works by Holme at Guppy’s brewery in Liverpool. During the project, Holme had had some labour problems and Guppy thought it was entitled to deduct liquidated damages at the rate in the contract. At first instance, the court agreed with Guppy, but on appeal, the judgment was overturned. The Court of Exchequer held that Guppy was not entitled to recover the liquidated damages, because it had also been responsible for delays to the works. In particular, it was found that Holme had been significantly delayed by Guppy’s masons and the late handing over of the site, and that these delays had prevented Holme from completing on time. The court referred to each of these delays as ‘an act of prevention’ and, in the absence of an extension of time clause (or alternatively, a revised contract with a longer period provided for completion), it held that time was left ‘at large’. With time at large, the liquidated damages provisions were unenforceable.