Eribo & Anor v Odinaiya & Anor

In a domestic refurbishment contract, the court must identify the contractual documents and cannot imply terms merely because they would be convenient. A promotional proposal was not contractual where the parties intended the detailed specification and timetable to govern. A contractor’s failure to complete, persistent defective work, unreliable systems and inability to remedy defects may, cumulatively, justify termination, even where some delay results from variations or events outside the contractor’s control. A term giving the contractor an unqualified right to return and remedy defects will not be implied unless it is necessary, obvious and reasonable. Damages may include the reasonable cost of remedial works and VAT, but general damages for inconvenience are unavailable for ordinary refurbishment works that have gone wrong.

The claim arose from design and refurbishment works carried out at the claimants’ home by the defendants. The claimants alleged delay, serious defects and incomplete works. The defendants denied liability and brought a counterclaim for alleged underpayment.

The principal issues were whether the promotional proposal formed part of the contract, who the contracting party was, whether termination was justified, whether the claimants had to allow the contractor to return and remedy defects, and the appropriate measure of damages. The court also considered claims for overpayment, inconvenience and distress, and the defendants’ counterclaim.

1. Contractual documents. The proposal document was a promotional brochure or mere puff, not a contractual document. The contractual package comprised the detailed specification and timetable. The proposal’s promised completion date and penalty clause therefore did not form part of the contract. The defendants had nevertheless waived an exclusion for unlisted work by supplying additional items as part of the fixed-price works.

2. Liability. The contracting party was the Second Defendant. The claim against the First Defendant failed, including the claims based on personal contract, collateral contract, misrepresentation and personal duty of care. The representations concerning his involvement had been made on behalf of the company, and imposing a personal duty would not have been fair, just or reasonable.

3. Termination. Applying the approach in Sutcliffe v Chippendale & Edmondson [1971] 18 BLR 149, the court assessed the circumstances cumulatively. The missed target and subsequent promised completion dates, the substantial incompleteness, persistent defects, unreliable electrical and other systems, and the contractor’s limited presence on site justified termination. Variations and some external delays did not explain the overall failure. The claimants were entitled to refuse further access.

4. Right to remedy. Pearce & High v Baxter [1999] BLR 101 did not justify implying an unqualified right for the defendants to re-enter and remedy defects. The contract contained no express term, and such a term was neither necessary nor obvious. The claimants were entitled to employ others.

5. Damages. The claimants recovered the reasonable cost of replacing or remedying the defective building, electrical, mechanical, AV, IT and security works, together with VAT. The overpayment claim failed for want of proof of mistake, save for £4,500 paid for three undelivered curtain poles. General damages for inconvenience and distress were unavailable: the contract was an ordinary refurbishment contract, notwithstanding the defendants’ reference to relieving “nest stress”.

6. Judgment was entered against the Second Defendant for £298,180.75 inclusive of VAT. The claim against the First Defendant and the counterclaim were dismissed. Costs were to be addressed when the judgment was handed down; no interest was awarded on the remedial-cost element because those costs had not yet been incurred.