What is the ratio in Panatown v Alfred McAlpine Construction?

A contracting party cannot recover substantial damages for defective performance affecting third party property where the third party has its own adequate contractual remedy against the defendant.

What did the court decide in Panatown v Alfred McAlpine Construction?

The House of Lords held that Panatown could not recover substantial damages for construction defects because the property owner had its own direct contractual warranty with the construction company.

Why is Panatown v Alfred McAlpine Construction important for contract law?

It clarifies the limits of the privity exceptions established in Linden Gardens, showing that contracting parties cannot recover third party losses where adequate alternative remedies exist.

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