Bryen & Langley Ltd v Boston

A binding building contract may arise before execution of a formal standard-form document where the parties have reached final mutual assent and their conduct accepts the agreement. The mere intention to sign later does not prevent immediate contractual commitment, unless the arrangement is subject to contract or essential terms remain unsettled. Proposed variations do not prevent formation of the basic contract where they are to be agreed under it.

Under the Unfair Terms in Consumer Contract Regulations 1999, unfairness requires both significant imbalance and conduct contrary to good faith. The assessment includes the circumstances of contracting and fair, open dealing. For summary costs assessment, the court must assess overall proportionality and then each item independently. Similarity between the parties’ costs is only a cross-check.

Bryen & Langley Limited sought to enforce an adjudicator’s award of £65,995 under the eleventh architect’s certificate issued during building works at a dwelling house. The adjudicator had ruled that the contract incorporated the JCT standard form and therefore contained adjudication provisions. The adjudication jurisdiction did not otherwise arise under the Housing Grants, Regeneration and Construction Act 1996 because Mr Boston was a residential occupier.

The Technology and Construction Court dismissed the claim and the application for summary judgment on 4 November 2004, holding that the JCT form had not been incorporated. The judge also rejected, obiter, Mr Boston’s alternative argument that the adjudication provisions were unfair under the Unfair Terms in Consumer Contract Regulations 1999. The appeal concerned incorporation, unfairness and the summary assessment of costs.

The appeal was allowed. Rimer J gave the principal judgment, with Clarke LJ and Pill LJ agreeing with the reasoning and conclusions.

1. Incorporation of the JCT form. The invitation to tender was expressly based on the detailed terms of the JCT form. By 12 June 2001 the relevant blanks and options, price and contract period had been settled. The floor-levelling work and proposed bonus scheme were variations to be negotiated under the contract, not outstanding essentials preventing formation. B & L accepted the offer by commencing work. The contract therefore incorporated the JCT form, including its adjudication provisions.
2. Future formal document. The contemplated execution of a formal contract did not make signature a condition of contractual liability. The question was one of construction and final mutual assent. The court applied the principles in Harvey Shopfitters Ltd v ADI Ltd [2003] EWCA Civ 1757; [2004] 2 All E.R.982, Rossiter v Miller (1878) 3 App. Cas. 1124 and Von Hatzfeldt-Wildenburg v Alexander [1912] 1 Ch. 284. The wording concerning the project not proceeding was best understood as reserving a right to resile before work began, with limited recovery of preparatory costs. That issue did not affect the result because the project proceeded.
3. Unfair terms. Regulation 5(1) imposed a composite test. A term had to cause significant imbalance and do so contrary to good faith. Regulation 6(1) required consideration of the circumstances of contracting, as well as the nature of the services and other terms. Good faith involved fair and open dealing, not merely commercial effect. Mr Boston’s agent had specified the challenged provisions in the invitation to tender. Their incorporation therefore involved no lack of openness, fair dealing or good faith by B & L. The challenge failed.
4. Costs. Summary assessment was appropriate for a hearing lasting one day. Under the two-stage approach in Lownds v Home Office [2002] EWCA Civ 365; [2002] 1 WLR 2450, the judge had first to assess overall proportionality and then whether each item was reasonably incurred and reasonable in amount, resolving doubt for the paying party. Comparing the parties’ costs schedules did not satisfy that duty. The costs order was therefore also set aside on appeal.

• Court of Appeal (Civil Division) In [2005] EWCA Civ 973, the court allowed the appeal, holding that the building contract incorporated the JCT form, rejecting the unfair-terms challenge and allowing the appeal against the costs order.
• Queen’s Bench Division, Technology and Construction Court On 4 November 2004, His Honour Judge Richard Seymour QC dismissed the application for summary judgment and the claim, holding that the JCT form was not incorporated. He rejected, obiter, the alternative unfair-terms argument and summarily assessed costs at £21,750.