RMP Construction Services Ltd v Chalcroft [2015] EWHC 3737 (TCC)
RMP Construction Services Ltd was a ground works sub-contractor ("the Sub-Contractor") which carried out works for Chalcroft ("the Main Contractor") relating to the construction of a Shell petrol station.
The Main Contractor served a pay less notice under the Construction Act which, under the Main Contractor's version of the terms of the contract (the sub-contract order), was arguably served in time. Under the Sub-Contractor's version of the terms (a series of emails), the Scheme for Construction Contracts applied and the pay less notice was served late, entitling the Sub-Contractor to the full amount applied for.
The Sub-Contractor referred the matter to adjudication and the Adjudicator found in favour of the Sub-Contractor.
The Main Contractor's version of the sub-contract order was unsigned and certain terms rejected by the Sub-Contractor in writing.
The decision illustrates the dangers of relying on conversations and unsigned draft agreements, as this can ultimately lead to the parties spending time and money in proceedings to establish what the terms of the agreement were. It is essential to ensure that key contractual provisions are always documented, especially those as fundamental as payment provisions.
Practical Tip:
No worthwhile legal update is complete without a case stressing the importance of clearly documenting agreed contractual provisions in writing.
Due to the quick nature of an adjudication, adjudicators are often inadequately placed to investigate the terms of an oral contract. It is therefore, all the more important to ensure that the terms of a construction contract are clearly recorded in writing (or depending on your perspective – those not agreed clearly set out).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
