Tomkins v Knowsley Primary Care Trust

A contract is not void for uncertainty merely because an outstanding term remains to be determined, where the parties have agreed a sufficiently certain dispute-resolution mechanism. A concluded transitional dental services contract could therefore incorporate terms subsequently determined under the prescribed procedure. An entire agreement clause does not automatically exclude evidence of an additional contractual term where the parties did not intend the written document to contain their complete agreement. A public body’s budgetary constraints do not entitle it unilaterally to avoid an existing contractual liability.

The claimant, a dental practitioner, contracted with the defendant primary care trust to provide NHS dental services under transitional general dental services arrangements. The parties agreed the contract value and associated Units of Dental Activity, subject to resolving the effect of atypical historical earnings relating to an associate dentist. The contract also included an additional £100,000 for work taken over from a closing dental practice.

The Appeal Unit later determined that the associate’s work should be assessed over an extended period. The Trust recalculated the contract value but purported to set off the additional £100,000. The claimant sought damages for breach of contract. The issues included contractual intention, uncertainty, the effect of the entire agreement clause, the Appeal Unit’s jurisdiction, construction of its determination, and the Trust’s asserted power of unilateral variation.

1. Contract formation and certainty. The parties intended to create legal relations and had agreed all material terms. The unresolved question concerning the associate’s historical earnings did not make the contract void for uncertainty because the parties had agreed that it could be determined through the applicable dispute-resolution procedure. The second paragraph 6 of the supplementary agreement did not give the Trust a right to terminate the whole contract merely because that issue remained unresolved.
2. Entire agreement clause. Clause 366 did not prevent the court from considering evidence of the parties’ agreement. The parol evidence rule does not apply where the parties did not intend the written document to contain their complete agreement. The court may consider all the evidence to ascertain the bargain, and may give effect to an additional term which truly expressed the parties’ common intention. The parties mutually intended the contract value to be adjusted retrospectively following determination of the outstanding issue.
3. Jurisdiction. Article 4(6) of the Transitional Provisions Order adopted the Regulation 8 procedure for disputes arising during negotiations towards transitional contracts. The requirement that the disagreement arise during negotiations did not require the reference to the Appeal Unit to be made before the contract was signed. The Appeal Unit accordingly had jurisdiction to determine the identified dispute after conclusion of the contract. Article 4(6) supplied the additional power to vary or terminate the contract where necessary.
4. Effect of the determination. The Appeal Unit determined the associate-earnings issue and its determination was binding. Paragraph 3.9 did not determine that the Trust could withdraw or set off the separately agreed £100,000. That sum was not in issue before the Appeal Unit and formed part of the parties’ binding agreement.
5. Unilateral variation and liability. The Trust’s statutory duty to remain within its financial allocation did not entitle it to vary the contract under Clause 288. Judgment was entered for the claimant on liability. Quantum was agreed subject to updating, with interest awarded at 4 per cent for the relevant period.