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Building work on private homes is very often carried out on an informal basis without clear contractual terms in place. However, one High Court case vividly shows that such an approach can create uncertainty and fertile ground for costly dispute. Such difficulties are best avoided by entering into a formal contract for any substantial amount of work to be done.
A couple instructed a building firm to carry out various renovation and improvement works on their home. A disagreement arose as to the sums due to the firm and it placed the matter before an adjudicator. He directed the couple to pay more than £70,000 to the firm, which launched proceedings to enforce his award.
The firm argued that the agreement incorporated standard terms, commonly used in minor works contracts, and that they included an adjudication clause. However, the couple submitted that there was nothing in the contract to confer jurisdiction (the legal authority to decide the issue) on the adjudicator. Although the possibility of including the standard terms had been discussed, no final accord on the issue had been reached.
In refusing to grant the firm summary judgment on its claim, the Court found that the evidence as to whether an adjudication clause was included in the agreement was equivocal and that the issue required a full hearing. Given the relatively low value of the claim, and both sides' agreement that there was an outstanding balance due to the firm, the Court urged the parties to sit down and settle the dispute.