Problem: I run a small painting and decorating company and earlier this year I was awarded a contract to carry out painting to a small block of ten purpose built flats in the centre of Leicester City.
The scope of works was straight forward, painting the walls and ceilings in a single colour (magnolia) with one mist and two full coats, whilst the rails were already KPS’d and only required an undercoat and a top coat (again in the single colour of magnolia).
Upon commencing the work, I was instructed by the client to apply a colour to the walls of the public areas to the flats. The colour was selected and the paint was purchased and in my next application for payment, I included an extra over cost for the change in colour.
The client subsequently came back to me and said that it was surprised that I had claimed any additional monies for the change in colour, which I responded saying that the paint itself was more expensive than a plain magnolia, plus there was the additional labour costs in cutting in the paint and wastage.
The client then said that if I was insistent in charging more for coloured paint, then it would be dispensing of my firm’s services, which it subsequently did, and got another painting contractor to come in and complete my works.
At the time of leaving the site, I probably carried out about one-quarter of the work, and I am still owed monies for that work carried out plus I had purchased all of the materials for the job, and although I could use the magnolia on other future work, the coloured paint is a special colour which means that in all probability, it will not be used on another job.
Any advice of what I can do to get my costs back?
Response: Given that there are only ten new build flats, I would have thought that the contract value for the painting is not that great, whilst the cost for the change of colour must be a small percentage of the contract value, and hence I am surprised that your client thought it was worthwhile in terminating your contract and engage another contractor: Your client may have a hidden agenda and be using the change of colour as an excuse to dispense of the your services.
I have not had sight of the terms and conditions of your contract as the first port of call must be to look at the termination clause and to see what are the grounds for termination and the procedure thereof. I doubt that there would be a specific ground for termination relating to what is effectively a disagreement on price for a variation, but there could be a ‘no reason’ clause that may allow your client to terminate on a summary basis without being in breach.
Notwithstanding any expressed T’s and C’s you may be under, the common law position would be on your side. Your client cannot simply terminate the contract on the ground that it disagrees that a variation to the works means an additional cost to the value of the contract. Of course, your client can disagree that there is a cost implication associated with the variation and that disagreement can be referred to an appropriate dispute resolution procedure.
Subject to what your T’s and C’s say, my recommendation is for you to reject that your client has lawfully terminated the contract and that the actions of it was a repudiatory breach, of which you accept, then put in a final account for the work that you did carry out plus a claim for the damages you have suffered as a result of the wrongful repudiation, that being the cost of the unused materials plus your loss of profit on the work that you did not carry out.
© Michael Gerard 2023
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.
Author background
Michael is a Solicitor, Chartered Builder & Registered Construction Adjudicator, and is a director at Michael Gerard Law Limited, a solicitors practice regulated by the SRA.