W.F. Price (Roofing) Ltd v Primebuild Ltd
In this Scottish case, the contract contained a provision that:
"...not later than 6 months after practical completion of the Sub- Contract Works the Sub-Contractor shall send to the Contractor all documents necessary for the purpose of computing the Ascertained Final Sub-Contract Sum."
The question before the Court was whether this clause provided a six-month time bar in respect of any claim for payment being made by the sub-contractor. The contractor said that the existence of the word "shall" would have no effect if a strict time limit was not imposed by the clause. Sheriff Principal Taylor did not agree. He said that when interpreting a commercial contract the Court should adopt a businesslike approach and try to ascertain what was the commercially sensible construction which two businessmen might have intended when they agreed to be bound by the contractual terms. Here, it seemed unlikely to the Court that such businessmen would have intended that the condition in question should preclude an otherwise legitimate claim for payment. For example, the sub-contractor would almost certainly have incurred costs in both materials and labour in fulfilment of his contractual obligations. It should not be forgotten that in such circumstances, there is a counterpart obligation on the contractor to pay the sub-contractor.
To deny the Sub-Contractor payment because he has failed to provide documentation in a given time frame could not, under this wording, be a proper commercial interpretation of the contract. That said, the Sheriff noted that if the sub-contractor failed to provide documentation within the six month period, this would be a breach of contract. Accordingly, it would be liable should any loss be incurred by the contractor as a consequence.