It’s easy to tell if you’ve made a contract with somebody
isn’t it? Well, there are some who would
argue that even if it looks like a duck and quacks like a duck, that does not
mean it necessarily is a duck! A company
called G.Percy Trentham Limited was instructed to carry out what Lord Justice
Steyn called “window works” on a construction site. That is, they were asked to design, supply
and install windows in a building. Now,
the other side in this argument, Archital Luxfer Limited, undertook this
work. They were manufacturers and
installers of aluminium windows. (Case
citation: G. Percy Trentham Ltd v
Archital Luxfer Ltd [1993] 1 Lloyd’s Rep. 25; 63 B.L.R.44 CA (Civ Div) I
am sure that you are now looking at this arrangement and saying to yourself –
well, that’s a clear case of a contractor and a sub-contractor. However, if you were on Archital’s side, you
would be wrong. They argued that there
was no binding contract (‘sub’ or otherwise) at all! This is despite the fact that Archital
carried out the work fully and Trentham paid them – in full. Confused?
You will be!
The problem arose when the main employer (Municipal Mutual)
took action against the main contractor (Trentham) for defects and delays who
then took action against the subbie (Archital).
It gets easier – honestly. Peeved
by having to pay out substantial sums of money when it wasn’t their fault,
Trentham placed the blame on their sub-contractors, one of which was Archital
who then took great exception to this and vigorously defended themselves. Their defence was two-pronged; firstly that
there were no defects or delays and secondly, that there was not even a
contract between them so how could it be breached… nurr!
Their reasoning was that no integrated written contract ever
came into being and, furthermore, they had never fully agreed on terms. Trentham argued that there were oral discussions,
written exchanges and, of course, performance
of these transactions by Archital. Hmm..
Checkmate I believe.
This was heard in the Court of Appeal and the point of
appeal was that the first judge should not have come to his conclusions (that
there was a binding contract) on the evidence placed before him. Archital’s appeal against this decision was rejected.
The Court of Appeal judge said “I am, in any event, satisfied that in this fully
executed transaction a contract came into existence during performance even if
it cannot be precisely analysed in terms of offer and acceptance and it does
not matter that a [written] contract came into existence after part of the work
had been carried out and paid for.” He
finished with “I would therefore hold that a binding contract was concluded”.
So
there you have it. Even if you faff
about swapping letters, forms, changing prices and asking endless questions, if
you then go on to perform the essential requirements of the service that you
have been asked to do and it is paid for – then, quite frankly, you have a
contract. Quack quack!
Tina
Morgan www.john-kennedy.co.uk
Legal-Easy
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