Background
Our client, A, purchased a ground-floor retail unit in a building. Ground-floor units command higher pre-sale prices thanks to their accessibility and visibility, and A signed the contract expecting exactly those advantages. After the contract was signed, however, the seller (the developer) changed the routing of the building's large sewer (waste and drainage) pipe during construction, installing it so that it crossed the ceiling of A's unit and ran down along the exterior wall. The problem was that A was neither informed of this change nor asked to consent to it.
What Was at Stake
The thick pipe running through the ceiling severely constrained A's interior fit-out, and drainage noise together with the impairment of appearance and sightlines reduced the unit's value and usability. The contract, however, contained a clause providing that "minor design changes are deemed to have been consented to," and at first instance A's claim was dismissed.
How Changchun Helped
On appeal, Changchun reframed the dispute. ▲ We established that the contract's "consent to minor design changes" clause applies only to trivial changes that do not materially affect the value of the unit, and cannot be read as consent to a change of this kind that substantially impairs the property's value. ▲ We proved that the seller's failure to disclose so significant a change was both a failure to properly perform its contractual obligations and a breach of the duty of disclosure arising under the principle of good faith. ▲ Because the loss was difficult to quantify precisely, we secured compensation on the legal principle that the court may fix a reasonable award taking all the circumstances into account.
The appellate court accepted Changchun's arguments and ordered the seller to compensate A for the loss caused by the undisclosed change (an amount equal to 10% of the purchase price). Compensation that had been refused at first instance was obtained on appeal after the claim was reconstructed from the ground up. The case shows that a significant change made quietly after contracting can, by the very fact of non-disclosure, become the basis of liability. Outcomes depend on the facts of each case and may differ.