Cases - Kelly Pipelines Ltd v British Gas plc

Record details

Name

Kelly Pipelines Ltd v British Gas plc

Date

(1989)

Citation

48 BLR 126

Keywords

Contracts - price - rate - work force - when assessing whether the contract rate was reasonable, whether the court was entitled to take into consideration to the employee's failure to employ sufficient work force

Summary

The defendants employed the claimants to lay mains and provide maintenance services. The contract covered a period of two years and provided that the claimants would have available for use on the contract a maximum of 46 and a minimum of 30 non-supervisory teams. Over the two-year period of the contract, the defendant employed an average of only 28 gangs per week. The claimant sued for £78,000 in respect of the loss of indirect site costs, overheads and profit as a result of the defendant's failure to employ 30 gangs per week. The relevant clause of the contract provided that if, in relation to any part of the works executed, there was no appropriate rate or price in the contract, or the contract rate was unreasonable or inapplicable, then the engineer should determine a reasonable and proper rate or price. However, the Court held that the engineer was not entitled to take into account the decrease in the number of gangs, in assessing whether the contract rate was reasonable or unreasonable.