ScotCs CSOH 83
The issue here was whether the Bains entered into a contract with Martin as a sole trader or a limited company for the construction of an extension to their home. Disputes arose, the parties fell out and the contract was terminated before the work was completed. The Bains brought a claim. The difficulty was that there were no written contractual documents, payments were made in cash and it was said that certain written documents were not “true and reliable”.
Having reviewed what evidence there was, Lady Clark “inferred” that on the balance of probabilities, the Bains knew that the business vehicle used by Martin was the limited company and that he was acting on behalf of the limited company, not as a mere sole trader. The Judge also noted that at the beginning of the project: “all parties were on amicable terms and mutually advantageous business contacts were expected to outlive the building of the extension”. As a result of there being no formal contract documents, the parties ended up in a (no doubt costly) three-day hearing to decide who was in contract with whom.