Rok Building Ltd v Bestwood Carpentry Ltd

The law as to the writing requirements for construction contracts for the purposes of section 107 of the Construction Act with particular reference to implied terms


Technology and Construction Court
Akenhead J
17 June 2010
Akenhead J confirmed that the law as to what the writing requirements were for construction contracts for the purposes of section 107 of the Construction Act was that all the terms of a construction contract had to be in or evidenced in writing. He went on to discuss the position with regard to implied terms
Whilst it was not necessary that the actual price was expressly recorded in writing for there to be a construction contract in writing, if the price was orally agreed but was nowhere in or evidenced in writing an agreed term was not in writing and the contract was not a construction contract in writing for the purposes of the Act. It was always open to parties both in ordinary contractual terms and for the purposes of a construction contract in writing under the Act to have an agreement in which the contract price was not expressly stated or agreed and to agree a verbal or mathematical formula by which the price could be determined. It was necessary to distinguish between the construction or interpretation exercise which established what the agreed price was and a written confirmation that something had been orally agreed. It was incorrect that where no prices had been agreed orally or otherwise in what was otherwise a construction contract in writing and a court or arbitrator would otherwise imply a term requiring payment of a reasonable price or reasonable remuneration, there could be no construction contract in writing. The whole point about implied terms was that they were almost invariably implied as a matter of law in the absence of any material express agreement and were terms which necessarily were not and did not have to be expressed as they arose by operation of law. A very large number of construction (and other) contracts had implied terms and it would be an extraordinary state of affairs if contracts which would otherwise be construction contracts in writing were taken outside the operation of the Act because there were one or more implied terms. It followed that a construction contract in writing in which there was no agreement about the price, whether oral, in writing or otherwise, would still be a construction contract within the Act even if the price or the rates fell to be determined by reference to an implied term as to reasonable rates or prices.