A specialist concrete subcontractor made a £40 million claim against its consultant, alleging defective design but the consultant denied liability and said that, even if it was liable, there was a simple contract with a liability cap of £610,515. The court had to decide if there was a contract and whether any of the three sets of competing terms and conditions, and the cap, were incorporated in it.
There was, said the court, a simple contract which was not “subject to contract”. Work was done and paid for on the basis of instructions from the subcontractor, which were accepted by the consultant, as evidenced by its conduct in undertaking the work. And none of the sets of terms and conditions and the schedule containing the liability cap was incorporated in that contract. While the court should always strive to find a concluded contract where work has been performed, the court is not entitled to rewrite history so as to incorporate express terms which were not the subject of a clear and binding agreement. The case demonstrated, said the judge, that it is usually better for a party to reach a full agreement, which in this case would almost certainly have included some liability cap, through negotiation and give-and-take, than to delay and fail to reach any detailed agreement.