Bryen & Langley Ltd. v Boston

A letter of intent which anticipates execution of a standard building contract does not incorporate that contract merely because it identifies the proposed form. A court must determine independently whether an adjudicator had jurisdiction before enforcing the adjudicator’s decision.

Obiter, adjudication and withholding-notice provisions will not generally create a significant imbalance under the Unfair Terms in Consumer Contracts Regulations 1999. Fairness is assessed prospectively by reference to the term and the circumstances when the contract was made.

The claimant building contractor sought summary judgment to enforce an adjudicator’s decision requiring the defendant, a private residential employer, to pay the balance of an interim certificate.

The parties had begun work following a letter stating that the works would proceed in accordance with the contractor’s tender and that a JCT contract would later be executed. No JCT form was signed by the defendant. The adjudicator decided that the letter incorporated the JCT adjudication provisions and then determined the payment dispute in the claimant’s favour. The defendant challenged enforcement on jurisdictional, unfair-terms, set-off and waiver grounds.

1. Summary judgment refused; action dismissed. The adjudicator’s substantive decision was unenforceable because the adjudicator had no jurisdiction.
2. The letter of 12 June 2001 was a preliminary agreement looking forward to a further contract in the JCT form. The references to future execution and preparation of contract documents pointed to a later agreement. The letter did not itself incorporate the JCT form.
3. An adjudicator may determine his own jurisdiction where invited to do so, but that determination has limited interim effect. At enforcement stage the court must form its own independent view. If the adjudicator lacked jurisdiction over the substantive dispute, his contrary view is immaterial.
4. Had jurisdiction existed, the alleged agreement accepting £50,000 in settlement of further claims would not have defeated enforcement. The adjudicator had considered that defence, and his decision would have been binding on an interim basis even if wrong in fact or law. The judge did not decide whether the alleged agreement existed.
5. The judge added obiter observations on the Unfair Terms in Consumer Contracts Regulations 1999. Fairness must be assessed prospectively at contract formation, by considering the term in its contractual context. Adjudication is a statutory, impartial and interim dispute-resolution procedure. Its subsequent cost or tactical use does not itself establish unfairness.
6. A withholding-notice requirement limits set-off but does not exclude it where the required notice can be given. It was difficult to envisage bad faith where a contractor merely accepted standard terms selected by a consumer, with or without professional advice.