Branlow Ltd v Dem-Master Demolition Ltd

The exchange of two letters between the contractor and the sub-contractor constituted a contract in writing for the purpose of section 107(2)(b) of the Construction Act notwithstanding that the nature and scope of the sub-contract works were not referred to in the letters
 
BRANLOW LTD v DEM-MASTER DEMOLITION LTD

Scotland, Sheriffdom of Lothian and Borders
26 February 2004
 
There was an exchange of correspondence between the contractor and the sub-contractor comprising two letters which the contractor admitted constituted a (sub-)contract. The sub-contractor referred a valuation of works dispute to adjudication and the adjudicator made a decision in its favour. The contractor refused to pay the sum awarded on the ground that the sub-contract was not a contract in writing for the purpose of section 107(2) of the Construction Act 1996. The sub-contractor brought court proceedings to enforce the decision. Section 107(2)(b) provided that there was an agreement in writing if the agreement was made by an exchange of communications in writing
 
The Sheriff held that the exchange of letters constituted a contract in writing for the purpose of section 107(2)(b) (with the result that the adjudication decision in the sub-contractor's favour should be enforced) notwithstanding that the nature and scope of the sub-contract works were not referred to in the letters. Whilst the contractor contended that there was no contract in writing for the purpose of 107(2)(b) by reason of the nature and scope of the works not being set out in the exchange of correspondence, the contractor crucially admitted that there was a contract comprising the two letters in question, the contractor crucially admitted that there was a contract comprising the two letters in question. The courts recognised that the jurisdictional threshold could be overcome (after which an adjudicator could decide if a clause could be incorporated) and if there was an agreement in writing established by an exchange of communications in writing, the threshold had been satisfied. Whilst there were variations to the sub-contract works, there was not variation to the contract itself. The adjudicator had asked the right question which was essentially to give the valuation of the sum due to the sub-contractor and to answer that question he had to consider each claim and decide if it was validly asserted under the contract, which he did.
 
Advice Note
If the party challenging the decision admits that a contract was entered into and was evidenced in writing, it is not relevant for the purposes of section 107(2) that the documents in question do not spell out the nature of the work to be carried out.