Clydebank and District Water Trustees v. Fidelity and Deposit Co. of Maryland [1915] ScotLR 322 (26 January 1915)

Clydebank and District Water Trustees v. Fidelity and Deposit Co. of Maryland [1915] ScotLR 322 (26 January 1915)

The obligation to give notice to the surety of any non-observance by the contractor of contract stipulations likely to involve loss was a condition precedent to the surety's liability. The pursuers failed to give such notice in respect of persistent and material delays, thereby discharging the surety from liability under the bond, regardless of whether the surety was actually prejudiced.

Citation
[1915] ScotLR 322
Parties
Pursuer: Clydebank and District Water Trustees; Defender: Fidelity and Deposit Company of Maryland
Jurisdiction
Scotland
Judgment Date
26 January 1915
Procedural Posture
Civil / Appeal (reclaiming Motion) From Lord Ordinary's Decision
Outcome
appeal dismissed; judgment for defenders affirmed
Legal Topics
Construction of Contract, Condition Precedent, Notice Requirements, Surety's Discharge, Modification of Contract Without Surety's Consent
Contract Law Insurance Law Suretyship Construction of Contract Condition Precedent Notice Requirements Surety's Discharge Modification of Contract Without Surety's Consent

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Parties

Clydebank and District Water Trustees

Pursuer

Fidelity and Deposit Company of Maryland

Defender

Procedural Posture

Civil / Appeal (reclaiming Motion) From Lord Ordinary's Decision

Legal Issues

  1. 1 Whether failure to give notice to the surety of contractors' non-observance of contract stipulations is a breach of a condition precedent discharging the surety.
  2. 2 Whether the surety is discharged if the employer fails to notify breaches that may involve loss.
  3. 3 Whether the employer's modification of the contract without the surety's consent discharges the surety.

Ratio Decidendi

The obligation to give notice to the surety of any non-observance by the contractor of contract stipulations likely to involve loss was a condition precedent to the surety's liability. The pursuers failed to give such notice in respect of persistent and material delays, thereby discharging the surety from liability under the bond, regardless of whether the surety was actually prejudiced.

Court Disposition

appeal dismissed; judgment for defenders affirmed

Orders

  • Defenders assoilzied (absolved) from conclusions of the summons
  • Pursuers to pay expenses