Cases - ERDC Group Ltd v Brunel University

Record details

Name

ERDC Group Ltd v Brunel University

Date

[2006]

Citation

EWHC 687 (TCC)

Keywords

Contract - building contract - letters of intent - letters of intent based on works being carried out under a JCT Standard Form of Contract with Contractors Design (1998 edition).- contract never signed - whether the claimant should be paid on a quantum meruit basis - assessment of a quantum meruit

Summary

The claimant submitted a tender for the construction of new sports facilities at its Uxbridge campus, to be carried out on the basis of the JCT Standard Form of Contract with Contractors Design (1998 edition). Pending full planning permission, progressed with the design of the works under the terms of a letter of appointment. Further letters of appointment were issued and the claimant started construction under further such letters. When the works were largely complete, the claimant declined to sign and claimed (for the first time) that it would only continue work on the basis that all work carried out by it would be valued on a quantum meruit basis rather than in accordance with the valuation principles applicable under the JCT Standard Form of Building Contract with Contractors Design (the JCT Valuation Rules). The claimant left site, by agreement, at the end of March 2003. The works were then not entirely complete.

The Court found that there was a clear intention to create legal relations, and that the work done pursuant to the letters of contract prior to the expiry of the last contract on 1 September 2002 was to be treated and valued as if it had been carried out under the contract contemplated by the last letter. It was not to be valued on a quantum meruit basis. After 1 September 2002, it was agreed that the basis of payment would be quantum meruit, but the claimant contended that this would be a costs-plus approach, and the defendant contended that this would mean the continuation of the contractual approach. The Court held that there are no hard and fast rules for the assessment of a quantum meruit, and all the factors have to be considered. On the facts of this case, which were unusual in that there was a move from contractual to a non-contractual basis, it was considered incorrect to switch from an assessment based on the claimant's rates to one based entirely on its costs.