Cases - Turriff Construction Ltd v Regalia Knitting Mills

Record details

Name

Turriff Construction Ltd v Regalia Knitting Mills

Date

[1971]

Citation

9 BLR 20

Keywords

Construction contract – Letter of intent – Subject to contract – Contract for design – Entitlement to payment for preparatory design work

Summary

In this case, Regalia was negotiating with Turriff for Turriff to design and build a factory. The work was urgent and so Turriff commenced the design on the basis of a letter of intent from Regalia, which concluded with the following statement: 'The whole to be subject to agreement on an acceptable contract.' In fact, negotiations subsequently broke down and the contract was not awarded to Turriff. Turriff sought payment for the design work it had undertaken in anticipation of the contract award. Regalia was held liable to pay Turriff for the preparation of the design on the basis of the letter of intent. As part of the negotiations, Turriff had made it clear that it expected to be paid for its design work.