Tayside Contracts is suing an Angus quarry for more than £800,000 after roads across the region disintegrated during harsh winter weather.
Tayside Contracts blames the “widespread failures” on faults with stone chippings, which were supplied by Arbroath firm D Geddes Ltd.
It is understood the damaged road surfaces had to be relaid as a result, causing misery for hundreds of motorists.
Tayside Contracts bought 8,800 tonnes of chippings in April 2010 for £177,000.
Lawyers acting for D Geddes Ltd argue the company, which runs Waulkmill Quarry, was only liable to reimburse the contractors for the amount they had paid for the material as Tayside Contracts had agreed to such terms under their contract.
A clause in the contract also said it is not liable for loss or damage arising from faults in the material.
Robert Howie QC, acting for Tayside Contracts, argued the terms of the clause were inconsistent and therefore void.
He said the materials were not of a sufficiently high quality, as required by the Sale of Goods Act, and sought total damages of £812,718.
An opinion delivered by Lord Woolman at the Court of Session states: “Mr Howie argued that a clause restricting liability must be clear and unambiguous.
“Condition six fails that test, because the limitation and exclusion elements are mutually inconsistent. It is therefore void for uncertainty.
“He also submitted that the meaning of the phrase ‘cost price of materials’ was uncertain.”
Solicitors for D Geddes Ltd argued there was a clear intention to restrict liability, however, and urged the judge to consider alterations to the wording which would uphold the condition.
Lord Woolman ruled in favour of Tayside Contracts on the basis the clause was poorly worded, thereby allowing the contractor to pursue D Geddes Ltd for the full £813,000.
Both Tayside Contracts and D Geddes Ltd declined to comment on the case.
The winter of 2010-11 had the coldest December since Met Office records began in 1910, with the country recording an average temperature of -1C.
Councils across Tayside were faced with multi-million-pound repair bills as thousands of potholes opened across the region.
Dundee Road, Arbroath Road and Baldovie Road in Broughty Ferry were among some of those hit, with recently filled sites “failing dramatically”.
In the first six weeks of 2011, road crews in both Tayside and Fife patched more than 10,000 potholes.