Developer has issued a written order with new terms & conditions
Problem: I am a freelance quantity surveyor and seek assistance on behalf of one of my clients. The client in question is a plastering sub-contractor and earlier this year it was invited to submit a schedule of rates for a new housing development in Corby. Having submitted the schedule of rates, the developer telephoned and asked my client to start work, which my client did on 12 May 2014. On 11 June 2014, the developer issued a written order that contained previously unseen terms and conditions of contract.
I was asked by my client to look at these terms and on 19 June 2014, based on my advice, my client rejected certain terms and put forward new terms. The developer subsequently wrote back and stated that its original T & C’s stood and that there would be no negotiations. The developer has also stated that if my client continues to reject the order, then it will be removed from the project. I would very much appreciate your view.
Wojtek
Response: Hello Wojtek. As your client commenced the sub-contract works on 12 May, then the terms subsequently issued by the developer on 11 June, unless expressly accepted, are not binding.
I am not aware whether your client just issued a schedule of rates or that it was accompanied with its own T & C’s. However, the fact that your client commenced work on 12 May, this is known as ‘contract by conduct’, and any attempt by the developer to introduce other T & C’s post this date will not be binding upon the parties.
The contract terms in existence are those that were apparent immediately prior to your client commencing the works, and to which the developer did not dissent. What those terms are will depend upon what your client included in its offer (i.e., when it submitted its schedule of rates). If your client just issued the schedule of rates, there will be certain terms that are implied, including time and quality.
However, your client will need to be cautious as it may not have stated what the minimum amount of work it was required to do, thus allowing the developer to cease providing any further work and your client would not be entitled to any compensation. If the agreement did not include for a minimum amount of work to be performed, there cannot be any compensation for loss of profit due to the sub-contract not being performed, as there was no agreement as to future works and in turn, there could be no future work to incur a loss on.
I suggest that both parties attempt to agree mutually acceptable terms, failure of which your client should continue performing the works under the initial agreement.
© Michael P. Gerard
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 Practising Solicitor, Barrister, Chartered Builder, Registered Construction Adjudicator & Accredited Expert in quantum and planning matters. He is a Consultant Solicitor with Edward Hands & Lewis, based in Leicestershire.