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Question
Road Builders Ltd. was the successful bidder for a contract with a provincial government to construct a 23- kilometre highway by-pass ofa large city. As a part of its preparation for the contract bid. Road Builders Ltd. engaged the sewices of Highway Engineering Corporation Ltd. to prepare engineering design and speci?cations for the construction project. This was done. and Road Builders Ltd. submitted the engineering design and speci?cations as a part ofits bid for the contract. The bid was successful. and the engineering design was incorporated in the contract by the government.
During construction ofthe roadway. errors were discovered in the design, and Road Builders Ltd. was obliged to correct the design errors at considerable expense. As a result. Road Builders Ltd. suffered a loss on the construction project, and demanded compensation for the loss from Highway Engineering Corporation Ltd.
Highway Engineering Corporation Ltd. refused to pay for the loss on the basis that it was not involved in the construction, and also that the province had accepted the design by including it in the contract.
Discuss the arguments of Highway Engineering Corporation Ltd., and the arguments that Road Builders Ltd. might raise ifit tool: legal action against the engineering ?rm for its loss. Render a decision.
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