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Charles is an engineer and civil engineering contractorwho designed and constructed steel framed factory. The work was carried out for his friend Barry and because oftheirfriendship Charles allowed Barry a substantial reduction on his usual charges for such work.

Charles is a competent engineer and his work is reputed to be sound and there has never been a problem in the past. Charles is a member if the Institution of Engineers and six months before this project the Institution had forwarded to its members a circularwarning that the type of building required by Barry posed new problems and that further measures were needed to strengthen such a building. This circular was filed in Charles’s office without him seeing it. Charles designed the building based on his past experience and did not take into account the information in the circular. Soon after completion the building fails. To renderthe building safe forworkers to enter it will be necessarily to demolish and rebuild it at a cost of $1million. In the meantime industrial land has fallen in value and a similar site could be purchased in a nearby suburb for $200,000 and an identical building constructed for $400,000. Barry has received an offer of $100,000 for his existing site with the damaged building; Barry wishes to remain at his original site as it is close to its suppliers.

Advise Barry discussing the principles involved and indicating what the outcome oflegal proceedings is likely to be.

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