Traditional Structures submitted a tender for the supply and installation of structural steelwork and roof cladding at a new business centre in Sutton Coalfi eld. It provided a price for each element. There were two versions of the tender, and they were identical except that one did not contain a reference to the price for cladding. HW Construction accepted all the works for a total of approximately £38k. HW Construction maintained that that was the contract sum whilst Traditional Structures said that it was obvious that the fi gure related to only one part and that the cost the cladding was a further £32k.
The main issue was whether the subcontract should be rectifi ed on the grounds of a unilateral mistake in order to include the missing reference to the cladding in the quotation. In other words should the price be increased (so rectifying the mistake) or was the subcontractor bound to carry out the work for the price recorded on the face of the subcontract.
The Judge decided that that subcontract should be rectifi ed in order to add in the missing line containing the price for the cladding. The traditional view has been that a party is held to the price that they submit for the works. A unilateral mistake is very rarely invoked in order to try to rectify mistakes. A claimant needs to prove that both parties to the contract clearly knew that the written contract was wrong. Here, the Judge decided that the managing director of the contractor would have known about the mistake because it was obviously inconsistent with the information exchanged between the parties. Consequently, the Judge considered that any reasonable reader of the tender would know that the fi gure put forward related only to the structural steelwork.
In coming to this decision HHJ Grant considered three possible degrees of knowledge on the part of that contractor - (i) actual knowledge; (ii) wilfully shutting one’s eyes to the obvious; or (iii) wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make. On the facts, the Judge considered that the contractor “wilfully and recklessly failed to enquire” as to whether the price included the cladding works and any honest and reasonable person would have questioned this.
The contractor clearly shut his eyes to the obvious and so had actual knowledge of the mistake. This was unconscionable and so the contract should be rectified.
In addition, even if the subcontract had not been rectifi ed, the Judge considered that Traditional Structures would have been entitled to be paid a reasonable price for the works under s15 of the Supply in Goods and Services Act 1982. So in any event they would have been paid a reasonable price for the carrying out of the cladding and the structural works.