| Date | 7 September 2005 |
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| Judgment | Bryen & Langley Limited v Martin Boston, TCC 29 July 2005 |
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| The Issue | Incorporation of terms by reference to a standard form of contract where it is intended that a formal contract will be drawn up in the future. |
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| Implication |
Where
parties have agreed all necessary terms for the formation of a contract,
including the incorporation of terms by reference to a standard form
of contract, those terms will apply notwithstanding the stated intention
to draw up a formal contract at a later date. |
printThe recent case of Bryen & Langley v Martin Boston related to the conversion of two flats in London owned by a Mr & Mrs Boston. Mr Boston engaged a firm of quantity surveyors to prepare bills of quantities to be sent out to potential contractors. The preliminaries section of the bills consisted of a list of project particulars and under the heading of "The Contract" provided that the 'JCT Standard Form of Building Contract, 1998 Edition, Private with Quantities' would apply, subject to certain listed amendments. The stipulated amendments made it clear that Article 5 was to be left undeleted. Article 5 of the JCT form provides that "If any dispute or difference arises under this Contract either party may refer it to adjudication in accordance with clause 41A". Clause 41A sets out the conditions under which disputes or differences can be referred to an adjudicator. Six builders tendered for the works and Bryen & Langley's tender was the lowest. Negotiations about the price and the works took place and these eventually led to the agreement of a revised price. Boston's quantity surveyors wrote to Bryen & Langley confirming Boston's intention to proceed with the works and confirming that a contract, in the JCT form, would be issued shortly. The letter also noted that the cost of levelling floors and a bonus scheme were still to be agreed. Shortly after that letter Boston's quantity surveyors issued completed contract documents to Bryen & Langley incorporating the JCT form. Bryen & Langley duly signed the contract and returned these to Boston for his signature. Boston never signed the contract. Meanwhile the works were progressing, and in the event the project overran and a dispute materialised over the final certificate issued by the Architect which Boston refused to pay. Bryen & Langley referred the matter to adjudication under Article 5 asking the adjudicator to rule upon its claim that Boston was liable to pay it £65,995 due under the Architect's final certificate. Boston's position was clear from the start. He claimed that because the works related to a dwelling in which Boston was a residential occupier, statutory adjudication under the 1996 Construction Act did not apply. He also claimed that the contract had not incorporated the JCT form and as such Bryen & Langley had no contractual right to adjudicate Bryen & Langley disputed these jurisdictional challenges asserting that even though Boston had never signed his copy of the contract, all the parties had acted as if a contract in the JCT form was in place. The adjudicator ruled in Bryen & Langley's favour on these points of jurisdiction and allowed the adjudication to proceed. He went onto award Bryen & Langley the sums contained within the Architect's certificate. Boston refused to comply with the award and Bryen & Langley sought enforcement proceedings in the court. The matter was brought before HHJ Seymour QC for summary judgment. Boston repeated his view that the contract did not incorporate the JCT terms and even if it did, then it was unenforceable under the Unfair Terms in Consumer Contract Regulations 1999. On the first issue the Judge held that, contrary to the adjudicator's finding, the JCT form was not incorporated into the building contract. Accordingly, there was no basis for adjudication. Bryen & Langley's application for enforcement of the adjudicator's decision was dismissed. The Judge also rejected Boston's argument concerning the 1999 Unfair Terms regulations. Bryen & Langley appealed the decision to the Court of Appeal where Mr Justice Rimer accepted Bryen & Langley's submission that all the terms of the building contract were in fact agreed. He commented that the mere fact that two parties propose that their agreement should be contained in a formal contract to be drawn up and signed in the future did not preclude the conclusion that they had already informally contractually committed themselves on exactly the same terms. He also agreed with Bryen & Langley that the outstanding issues of floor levelling and bonus could not be regarded as essential elements of the building contract that still remained to be agreed. They were simply variations to be negotiated under the terms of the contract. In respect of the alternative case under the 1999 Regulations, Justice Rimer rejected Boston's submission that the adjudication provisions were contrary to the requirement of good faith and caused a significant imbalance in the parties' rights. The adjudication provisions were not imposed by Bryen & Langley (the supplier). It was in fact Boston (the consumer), acting through his quantity surveyor, who had imposed them on the supplier by virtue of the original invitation to tender. In conclusion, Mr Justice Rimer stated that "I regard the suggestion that there was any lack of good faith or fair dealing by Bryen & Langley with regard to the ultimate incorporation of those terms into the contract as repugnant to common sense". Finding that there was no lack of openness, fair dealing or good faith he rejected Boston's alternative claim. Lord Justice Clarke and Lord Justice Pill agreed with the conclusions of Justice Rimer and the decision of the Adjudicator was duly enforced.
CJ-0535
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