| Failure to make contractual terms clear is a sure | | | | were the contractual terms? |
| recipe for trouble and in construction contracts, | | | | 3. If there was a binding contract or contracts, was |
| where the sums of money involved can be | | | | either party to the dispute in breach of the |
| substantial, getting the contract terms agreed up | | | | contract(s)? and |
| front is always sensible. | | | | 4. If there was a breach of contract, what damages |
| In a recent case, a woman arranged with a property | | | | resulted? |
| developer that the developer should carry out | | | | The court concluded that the woman had entered |
| refurbishment work on her property. The | | | | into two separate contracts with the developer. The |
| development of the property was to proceed in | | | | first was with regard to the first phase of the works. |
| three stages and it was agreed that the developer | | | | She had repudiated this contract when she regarded |
| would start the first phase as soon as the necessary | | | | the developer’s breach of the contract as a |
| planning permission and building control permission | | | | repudiation of it. Her response had not been the |
| were obtained. | | | | correct one. She had herself created a repudiatory |
| The woman made up-front payments to cover | | | | breach of contract by failing to pay the second |
| professional fees and to fund the commencement of | | | | instalments due under the contracts. The developer |
| the works. Unsatisfied with the subsequent progress, | | | | was therefore entitled to damages for the profits he |
| she demanded an account of how the money had | | | | would have made had the contracts been completed |
| been spent and decided that now was the time to | | | | and paid for as agreed. |
| have a formal contract. She refused to make further | | | | This case shows how what may seem to be a |
| payments until a schedule of payments based on | | | | reasonable reaction – in this case declining to |
| progress achieved was agreed. The developer | | | | make payments when a development falls behind |
| refused to continue without further progress | | | | schedule – can lead to difficulties. In this case, the |
| payments. He sent a solicitor’s letter to the | | | | problem was compounded by the woman’s |
| woman demanding payment of the sums due. | | | | response to the solicitor’s letter sent on behalf |
| Each side accused the other of repudiating the original | | | | of the developer. Had the original contract contained |
| contract and eventually the dispute ended up in court. | | | | a clause which linked payments to the meeting of |
| The court had to decide the following issues: | | | | specific targets, then each side would have known |
| 1. Was there a binding contract or contracts? | | | | where it stood and the dispute could probably have |
| 2. If there was a binding contract or contracts, what | | | | been avoided. |