Debeck Ductwork Installation Ltd V T & E Engineering Ltd

The oral agreement did not constitute a "construction contract" by reason of it not having been evidenced in writing in accordance with section 107(2) in the form of a fax from the claimant
 
DEBECK DUCTWORK INSTALLATION LTD v T & E ENGINEERING LTD

Technology and Construction Court
Her Honour Judge Frances Kirkham
14 October 2002
 

The claimant company applied to the court for summary judgment in respect of the installation of air conditioning services. The parties reached an oral agreement whereby the claimant agreed to undertake the installation of ductwork for a specified sum in two stages, ie first and second fix works. The issue for determination by the court was whether the oral agreement constituted a “construction contract” (and was therefore governed by the Construction Act 1996) by reason of the contract having been evidenced in writing in accordance with section 107(2) in the form of a fax from the claimant.

 

Section 107(4) provides that an agreement is evidenced in writing if an agreement made otherwise than in writing is recorded by one of the parties or by a third party with the authority of the parties to the agreement. Section 107(2) provides that there is an agreement in writing if the agreement is made in writing or by an exchange of communications in writing or is evidenced in writing. Judge Kirkham held that the oral agreement was not a “construction contract” on the basis that the fax did not constitute evidence of the whole agreement as required by the Court of Appeal’s decision in RJT Consulting Engineers v DM Engineering (2002).

 

The claimant’s fax did not contain the whole of the agreement insofar as it did not explain even in summary terms the scope of the work to be undertaken since the contract was a labour only one but the description of the work in the fax was merely general and it was not clear whether materials were to be supplied by the claimant or whether the work was to be carried out by way of first and then second fix. Also a director of the defendant gave evidence that there were further terms of the contract not contained in the fax.

 

Advice Note

Parties will sometimes rely on an exchange of correspondence as sufficient evidence of a “construction contract” to come within the meaning of section 107(2) and (4) of the Construction Act 1996. Such reliance will be misplaced unless the whole of the agreement constituting the alleged “construction contract” is evidenced in that exchange.
 

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