27/11/2015

As Clear As Mud! The Importance Of Clarity In Communication

A recent case dealt with by the Technology and Construction Court reinforces the importance of parties to construction contracts being very clear on what they have (or have not) agreed.

The case of Mi-Space (UK) Ltd (Mi-Space) v Bridgwater Civil Engineering Ltd (BCE) concerned a subcontract between the parties for the carrying out of groundworks for a residential development in Plymouth. The dispute centred on an application for payment made in December 2014. The dispute was referred to adjudication and the adjudicator held as Mi-Space had failed to serve a payment notice in time, BCE were entitled to be paid the amount claimed.

Mi-Space failed to pay the sum ordered by the adjudicator, so BCE started proceedings to enforce the adjudicator’s decision. Mi-Space defended the proceedings alleging that an agreement on the amount due in respect of the application had been reached by an exchange of emails on 3rd March 2015. BCE argued although the agreement had been performed and payment had been made, that it was conditional on a deed of variation being entered into and that the agreement “was subject to contract”. Therefore the court had to consider the issue of whether the parties had reached an agreement or not. Having carefully considered the wording of the relevant emails exchanged on 3rd March 2015, the court held that the parties had reached a binding agreement. This meant that there was no dispute to refer to adjudication and the adjudicator’s decision could not be enforced. In the words of Mr Justice Edwards-Stuart, BCE’s director had “made a bargain…that he came to regret and so looked for a way out of it”.

Although this case was decided on its own facts, it highlights how important it is to be clear and precise on the exact terms of any settlement, otherwise you may find yourself bound by an agreement you never intended.

Mi-Space (UK) Ltd v Bridgwater Civil Engineering Ltd [2015] EWHC 3360 (TCC)

For more information on this case or for any construction or other dispute resolution queries, please contact Tracey Ashford on 01562 512484 or tashford@thursfields.co.uk

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Thursfields Legal Limited is authorised and regulated by the Solicitors Regulation Authority in England and Wales. Registered number 08829685.

Thursfields Legal Limited is authorised and regulated by the Solicitors Regulation Authority in England and Wales. Registered number 08829685.