HT-2024-000423 - [2025] EWHC 942 (TCC)

Fecha: 16-Abr-2025

The Terms of the Parties’ Contract

The Terms of the Parties’ Contract

78.

It is the Defendant’s case that the contract between the Parties was concluded by the exchange of WhatsApp messages exchanged on 17 May 2023.

79.

The Claimant’s case is set out at paragraphs 94 to 101 of Mr Hanna’s skeleton argument:

(3)

Was a contract formed on 17 May 2023?

94.

The Whatsapp messages from Mr James on 17 May 2023 confirmed that the Defendant had won the tender (on the basis of a price of £248,000), but other terms essential for a construction contract had not yet been agreed:

94.1

It was unclear who the employing party was. The Defendant had primarily been negotiating with Mr James, who had been emailing from an email address associated with another business called Estateducation, as well as corresponding by email with persons using emails associated with the Claimant. It is difficult to see how the Defendant can maintain, as it does, that it is clear that a contract formed by Whatsapp on 17 May 2023 was with the Claimant (as opposed to Estateducation). The WhatsApp messages show that the Defendant had worked for and been paid by Estateducation on other projects in 2022 / early 2023. (Footnote: ³)

94.2

There was no agreement on the duration of the works. By emails on 12-13 May 2023, the Claimant proposed 8 weeks and the Defendant suggested 12 weeks, but no consensus was reached (and nor is there any evidence that the matter was discussed again prior to 17 May 2023).

94.3

It is unclear whether a start date had been agreed. On 17 May 2023, Mr James asked whether work could start “on Monday”. The Defendant responded that scaffold could start that day, but that “men will start the following Monday”. There was no direct response to that from Mr James and hence it is unclear where matters were left.

94.4

Payment terms were not agreed. Mr James proposed monthly applications. The Defendant replied, “Are you saying every 28 or 30 days from invoice that’s a yes not on draw downs then good [thumbs up emoji] call you at 8:30 mate Thanks mate appreciated Ben”. To which Mr James immediate response was “Ok” and (4 seconds later) “Chat in the am”. The conclusion to be drawn from that exchange, it is submitted, is that the Parties were talking past one another on payment terms. There is no evidence that any call took place the next morning (and the Defendant’s evidence says he does not recall any such call (Footnote: ⁴)). The next Whatsapp between Mr James and the Defendant was not until 2 weeks later, on 31 May 2023 (by which time works had already begun).

95.

In the Claimant’s submission, an informed, objective observer would not infer that the Parties both have intended to form legal relations and a binding contract through the exchange of Whatsapp messages on 17 May 2023. The following matters in particular would affect this conclusion:

95.1

This was work amounting to approximately one-quarter of a million pounds. For a job of that scale and value, participants in the construction industry would typically expect the agreement to be formalised in a written agreement.

95.2

It was only on this date that Mr James confirmed, for the first time, that the job would be given to the Defendant. In the context of normal practice in the construction industry, this was a confirmation of a successful tender (on the basis of a £248,000 price); it was a staging point in the Parties’ negotiations rather than a complete and concluded agreement.

95.3

That is reinforced by the fact that the Parties had not yet reached a landing (and in some cases had not yet even discussed) certain essential terms by 17 May 2023. Whilst some of those terms could be supplied by law (eg payment terms via the Scheme), others could not (such as identity of the employer). Moreover, the fact that key terms such as duration and payment terms had not yet been concluded tends to suggest that the Parties regarded the negotiations as ongoing. Whilst the law can imply a term that the works are performed within a reasonable, it would be unusual for experienced parties in the construction industry to knowingly commit to a legally binding agreement without first reaching an agreement on duration.

(4)

Was a contract made on the terms of the written Subcontract?

96.

The written Subcontract was emailed to the Defendant on 26 May 2023. Although is witness evidence at one point sought to suggest that the email was never received, the Defendant has indicated that the Court should decide this case on the basis that it was received. The Defendant never acknowledged or replied to the email, either agreeing or rejecting the Subcontract terms.

97.

The Claimant’s case is that the agreement was not formed on 17 May 2023 (for the reasons given above) and that the Subcontract terms provided on 26 May 2023 apply, on the basis of the “last shot” doctrine. (In the present case, since these were the only formal written terms exchanged between the Parties, “only shot” might be the more apt description).

98.

As at 26 May 2023, when the Subcontract and Purchase Order were sent, the scaffolding subcontractor had begun some scaffold modifications on behalf of the Defendant, but (it is common ground) the Defendant had not yet mobilised to site and started his demolition works (which would not occur until 30 May 2023). The Purchase Order and Subcontract were the first time that it was made clear that the contracting party would be the Claimant. The Subcontract also filled in inter alia the remaining essential terms that had been left unagreed or undiscussed as at 17 May.

99.

The acceptance of the Subcontract terms by the Defendant was by conduct, in the form of mobilising to site on 30 May 2023 to commence its demolition works. (For the reasons given in the legal section above, the fact that some preparatory scaffold work had been done on the Defendant’s behalf prior to 30 May is not decisive. What instead matters is that the Defendant mobilised itself and began work without demur from the Subcontract).

100.

That the Subcontract was intended to apply (and was understood to have applied) is supported by the Parties’ subsequent conduct. In particular:

100.1

On 23 June 2023, Mr Ball of the Claimant emailed the Defendant (Subject line: “Application 1”)¸referred to “the below table which schedules out your payment terms that reflect your subcontract” and included a table with Interim Valuation Dates (which was the language of the Subcontract). The full text of the email is in the chronology section of these submissions.

100.2

The Defendant did not reply to that email asking what was meant by a Subcontract, or denying that the Subcontract formed the terms of their agreement.

100.3

On 24 June 2023 (which was the day after the Defendant had submitted its second invoice in a three week span), Mr James sent a Whatsapp message to the Defendant at 12:59 saying, “Why did you submit application no.2? You’re not sticking to the subcontract that’s in place” [Main / 42]. The Defendant’s reply was “Well I know I have to wait 30 days now or what ever it is and I’ve finished all inside sections… So will you please pay me something mate”. Again, the Defendant did not respond by denying that the Subcontract was in place, or indicating that he was unaware of a Subcontract. His reaction, if anything, indicates that the true position was that he was unbothered by any formal terms of the agreement (“or what ever it is”) and that his approach instead was that payments should be made on demand as and when he finished parts of the works.

101.

For those reasons above, it is submitted that the agreement was made on the terms of the written Subcontract sent on 26 May 2023. If that is accepted by the Court, then it is common ground that the invoices are invalid for failing to comply with the Subcontract terms.

80.

I do not accept the Claimant’s analysis.

81.

In my judgment, the exchange of WhatsApp messages, whilst informal, evidenced and constituted a concluded contract.

82.

The Claimant’s argument to the contrary contends that essential terms were not agreed, thus indicating that there was no concluded agreement on 17 May 2023.

83.

Firstly, the Claimant contends that there was no agreement as to the party with whom the Defendant was contracting, pointing to the involvement of a company other than the Claimant, namely Estateducation.

84.

The Defendant draws attention to the fact that this is a new point. It was not raised in the Adjudication and, indeed, is contrary to the Claimant’s pleaded case brought in the name of the Claimant.

85.

In my judgment, the answer to the Claimant’s submission is that when a quotation was sought this was done by one email dated 2 May 2023 from Paul Wymer sent from an email address of [email protected] and describing himself as being “Property Development Director JaeVee” and two emails dated 3 May 2023 sent by Mr Rory Armitage with an email address of [email protected] and describing himself as being “Site Project Manager JaeVee”; and that the Defendant addressed his quotation to “Jaevee Ltd.”

86.

Viewed objectively, the Parties intended the contract to be between the Defendant and the Jaevee company carrying out the identified project. There is no dispute that this was the Claimant.

87.

Secondly, the Claimant contends that there was no agreement as to the duration of the works. Agreement as to duration of contract works is not an essential element of a construction contract: absent express agreement, there is an implied term that the contractor will complete within a reasonable period.

88.

Thirdly, the Claimant contends that it is unclear whether a start date had been agreed. In my judgment it had been agreed that the first part of the works (namely erection of scaffolding) would start on the following Monday, but even if that had not been agreed, agreement as to a precise start date was not an essential term of the contract.

89.

Fourthly, and finally, the Claimant contends that payment terms had not been agreed. I consider below what had been agreed as to payment, but the absence of payment terms is not antithetical to the existence of a concluded contract – an important target of the 1996 Act is to fill the gap if a contract does not contain appropriate payment terms.

90.

Accordingly, none of the four matters raised by the Claimant taken on its own requires the conclusion that no contract was concluded on 17 May 2023. However, that conclusion on its own is not sufficient – whilst the absence of an essential element of the contract might drive the conclusion that there was no concluded contract, even where that situation did not arise it is still important to step back and ask whether all the facts indicate that the Parties did not intend to conclude, and did not conclude, an agreement that day: this point was reiterated in paragraph 9 of the Claimant’s Post-Hearing Submissions.

91.

In my judgment:

(1)

The Parties intended that the works should be started as soon as possible, and had agreed when the Defendant would come to site;

(2)

The scope of the works had been agreed;

(3)

A price had been agreed;

(4)

There was no express indication that the final terms of the agreement between the Parties depended upon agreement as to any other matter such as incorporation of the Claimant’s standard terms of contract;

(5)

The following exchange is redolent of a concluded agreement:

[17/05/2023, 17:43:15] Steve Fincham: Ben Are we saying it's my job mate so I can start getting organised mate

[17/05/2023, 20:06:42] Ben James: Yes

92.

To the above list of factors, I would add that in my judgment terms of payment had been agreed.

93.

The exchange of WhatsApp messages on 17 May concluded:

[17/05/2023, 20:06:51] Ben James: Monthly applications

[17/05/2023, 20:11:50] Steve Fincham: Are you saying every 28 or 30 days from invoice that's a yes not on draw downs then good … call you at 8.30 mate Thanks mate appreciated Ben

[17/05/2023, 20:12:12] Ben James: Ok

[17/05/2023, 20:12:16] Ben James: Chat in the am

[17/05/2023, 20:17:49] Steve Fincham: Thanks Ben”

94.

The evidence before me showed that the background to this exchange was that in respect of a previous contract the Claimant had held back monies until it had received monies from its customer. This exchange made it clear that the Defendant would be paid at latest 30 days after delivery of an invoice – there is a separate issue as to whether the Defendant was at liberty to deliver more than one invoice in any one monthly period.

95.

The conclusion that there was an agreement as to timing of payment is also indicative of a concluded agreement.

96.

In arguing against the proposition that there was a concluded agreement on 17 May 2023, the Claimant referred to well known authorities as to contract formation, often referred to as “the battle of the forms” in respect of which the leading modern statement of the law is to be found in the judgment of Dyson L.J. (as he then was) in Tekdata Interconnections Ltd. V Amphenol Ltd [2009] EWCA Civ 1209; [2010] 1 Lloyd’s Rep. 357.

97.

In paragraph [25] of that judgment, Dyson LJ said:

…. But where the facts are no more complicated than that A makes an offer on its conditions and B accepts that offer and, without more, performance follows, it seems to me that the correct analysis is what Longmore LJ has described as the ‘traditional offer and acceptance analysis’, i.e. that there is a contract on B’s conditions ….

98.

In my judgment, the position here is even simpler than the example there given, because on 16 and 17 May 2023 there was simply no discussion of any conditions. In the WhatsApp exchanges on 16 May 2023, Mr Smith asked Mr Fincham to come up with a reduced price. Mr Fincham did so, putting forward a figure of £248,000. Mr Smith’s response on 16 May was to say that he would confirm on the following day whether Mr Fincham had a deal. On the next day the following exchange confirmed that Mr Fincham had his deal:

“[17/05/2023, 16:34:43] Steve Fincham: Hi Ben How did you get on mate is the job mine mate
[17/05/2023, 16:38:32] Ben James: Can you start on Monday?
[17/05/2023, 16:55:06] Steve Fincham: I can start with getting the scaffolding sorted and stuff on Monday mate but men will start the following Monday Tom needs to get the scaffolders there on Monday too mate to alter the scaffolding with ladder beams above the door way and make gates into the hoarding to get the equipment in He will know what we are talking about mate Appreciate this work I really do Ben
[17/05/2023, 17:43:15] Steve Fincham: Ben Are we saying it's my job mate so I can start getting organised mate
[17/05/2023, 20:06:42] Ben James: Yes

99.

My conclusion that, subject to an exchange a few minutes later clarifying payment terms, the contract was then concluded. That exchange a few minutes later concluded the contract.

100.

On that basis, the Claimant’s Subcontract terms were not incorporated into the Parties’ contract when it was concluded.

101.

The Claimant attempted to incorporate those terms a few days later when a zip file of contract documentation was sent to the Defendant on 26 May 2023, but that attempt at incorporation received no acceptance from the Defendant.

102.

That leaves an issue as to interpretation of the terms of the contract. Does the exchange which I have set out at paragraph 93 above mean that the Defendant could only make one application each month?

103.

The Claimant’s primary submission, set out in paragraph 94.4 of Mr Hanna’s skeleton argument (see paragraph 79 above) is that payment terms were not agreed as the “Parties were talking past one another on payment terms” (this was repeated in paragraph 17 of the Claimant’s Post-Hearing Submissions).

104.

In his skeleton argument, Mr Frampton submitted:

75.

There was not an agreement that the Defendant could only make one application each month.

76.

Rather the agreement was that the final date for payment would be 28 or 30 days following an invoice. That was the clarification or counter-offer raised by the Defendant which was accepted by the Claimant (“Ok”).

77.

It also reflected the parties previous dealings. Mr Smith’s WhatsApp message on 3 February 2023, when the Defendant was chasing for payment on a different job, confirmed that:

“Our payment terms are always 30 days from application so if we applied that then the payment isn’t due for another 2 weeks as you only finished 2 weeks ago”
[emphasis added]

78.

Mr Fincham’s reference to “not on draw downs” was because the Defendant had worked for the Claimant on previous projects and the Claimant had delayed payments on the grounds that it was waiting for bank drawdowns. See Fincham 1, §23:

“…when Mr Smith said the works were awarded to me at the same time he suggested monthly applications. I had had issues before with such an approach with Mr Smith via other companies in the Jaevee Group, as I would be told sums couldn’t be paid due to draw-downs, so I was reluctant to agree to this. I replied saying: “Are you saying every 28 or 30 days from invoice that’s a yes not on draw-downs then good”. I was only prepared to take on the job if I was paid within 28 or 30 days of an invoice.”

79.

An example is shown by the WhatsApp messages on 24 June 2022:

“Steve Fincham: Remember it's payday mate
Ben James: We're chasing the bank for payment now as we speak
Steve Fincham: [3x thumbs up emoji]
Steve Fincham: You are breaking your promise again mate still not been paid Ben
Ben James: [Missed voice call]
Ben James: We've not received the payment though I put £10k in in your account from other funds. We get our money on Monday so the balance will be with you then.”

80.

The agreement in this case was to the benefit of both parties. The Claimant would have 28-30 days to pay an invoice. The Defendant knew that it would (or should) be paid after 28-30 days.

105.

I accept that what happened on previous contracts is relevant background, but I do not find it conclusive in this case.

106.

In paragraph 20.1 of its Post-Hearing Submissions, the Claimant submits:

The phrase “monthly applications” cannot bear the construction that the Defendant seeks to give to it. The plain and ordinary meaning of those words is that there would be one application per month. The Defendant’s interpretation – namely that there could not only be 1 application per month but as many applications as the Defendant wished – turns the plain meaning of the words on its head.

107.

I accept the Claimant’s argument in that regard: in my judgment the agreement was that the Defendant was free to make one, but only one, application for payment each month.

108.

There was however no agreement as to when in the month such an application could be made.

109.

Mr Frampton submits that if he is wrong in his primary submission (that there could be more than one application in any particularly monthly period), the Defendant is entitled to succeed in respect of three of the four contested invoices. I return to that alternative case below.