Cases - Sanjay Lachhani v Destination Canada (UK) Ltd

Record details

Name

Sanjay Lachhani v Destination Canada (UK) Ltd

Date

(1997)

Citation

13 Const LJ 279

Keywords

Contract - no concluded contract - remuneration - indication as to level of remuneration in respect of which the contractor would have carried out the work - fair value - whether the fair value of the contractor's worked was to be capped at the level it had previously indicated that it would carry the work out for

Summary

The defendants required extensive work to their offices. They engaged architects to prepare drawings and a specification, and let the strip-out works to a Mr Vaghjiani. The latter in fact engaged others to carry out the works, invoicing the defendants in the name of Jupiter Builders. The defendants then approached Mr Vaghjiani to tender for the main work, who in turn approached the claimants allowing them to believe that he was a representative of the defendants.

The claimants and the defendants considered that there was a contract in place for the work in the sum of £100,000. The work took longer than anticipated and there were additional works. It was decided that no contract had in fact been concluded. The issue was therefore the basis of remuneration. Mr Recorder Reese QC found that when fixing the appropriate level of remuneration, any pricing level at which the building contractor had indicated it was prepared to undertake the works ought to be taken into account. A building contractor ought not be better off as a result of the failure to conclude a contract than he would have been if his offer had been accepted.

Thus, in some cases it may well be appropriate to take into account established market prices. In other cases it may well be appropriate to consider the level or levels of prices at which the parties had been negotiating before the works were commenced. In others, although in many cases a 'fair value' may be calculated on a 'costs-plus' basis, the allowable remuneration may fall to be capped by reference to a pricing level put forward by the contractor.