2 South West Building & Construction

SOUTH WEST

March 2010

BUILDING &

CONSTRUCTION

Tavistock Newspapers Ltd, 14 Brook Street, Tavistock, Devon, PL19 0HE. Tel: 01822 613666 Fax: 01822 618222

INSIDE THIS ISSUE

■ Business-to-business - Page 4 ■ Aspects of Construction - Page 6 ■ Brian Teague & Sons - Page 10 ■ Concrete in Construction - Page 15 ■ Focus on Penzance area - Page 18 ■ Joinery feature - Page 20 ■ Environment Topics - Page 23 ■ Federation of Master Builders - Page 26 ■ Welding and fabrication - Page 30

CAPTIONS FOR MAIN FRONT PAGE PICTURES: clockwise

from top: Payne Timber and Duchy Timber, see page 16; Brian Teague & Sons, see feature on page 10; BJ Kenny Truckmix, see page 15; and New Generation Energy, see page

25.

Quote of the month

‘

I don’t care about losing a million pounds. It’s just money -

Pop singer Joss Stone.

STEPHEN HOMER

Interpretation of contracts

Stephen Homer, a former chairman of the CIC South West (Devon & Cornwall), highlights a case involving pre- contract correspondence and negotiations.

THE issue of whether a court or tribunal can look at pre- contract correspondence and negotiations to interpret the meaning of a contract, where the meaning is ambiguous, was explored in the recent

case of Chartbrook Ltd v Persimmon Homes Ltd.

This case concerned the

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’

extent to which pre-contract correspondence and negotiations could be used to assist interpretation of a payment formula which, interpreted using everyday meaning of the words in the contract, made no commercial sense. It was held, in accordance with established principles of law, that where a court was required to clarify an ambiguity in a contract, it should be guided by what a reasonable person, having full knowledge of all the background which would have been available to the parties, would have understood the parties to have meant.

The House of Lords

confirmed that pre-contract correspondence and negotiations should not be admitted as evidence of what

the parties intended. The positions taken by parties during negotiations frequently shift.

As such, taking pre- contract correspondence and negotiations into account during subsequent attempts to interpret the contract can lead to an uncertain, subjective approach which is not reconcilable with the objective ‘reasonable person’ approach mentioned above. However, at the same time, the case confirmed the established principle that pre- contract correspondence and negotiations are relevant when a court is asked to consider claims relating to misrepresentation, mistake and estoppel by convention. A lesson to be learned from this case is to ensure that all terms in a contract are clear, as pre-contract correspondence and negotiations will not usually be admissible to explain these if the contract terms are disputed in court. If anyone has any queries arising from this article, I can be contacted via email at s.homer@ashfords.co.uk.

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DISCLAIMER: The CIC SW (Devon & Cornwall) will not accept any responsibility for any loss occasional to any person acting or refraining from action as a result of the material included in this publication. Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30