The Ballad of Bob Windows

Having a contract is important...

Some years ago, when given my first mobile phone, I developed the habit of storing people by their first name and profession. The practice seems widespread. Hence, I am on messaging terms with, Brian Electrician, Kevin Carpenter, Chris Gardener and Warren Carwash. The sharp cookies among you will therefore be able to guess the basis of my relationship with Bob Windows. 

I recently decided, or more correctly Mrs Wheeler decided, that we were going to have a garden room. I asked several people what the difference is between a garden room and a conservatory and the answers varied from, “…a room that has a gable end and a solid pitched roof, not a glass or polycarbonate roof …” to “…about five grand, mate…”. My research would suggest that both are true. The obvious candidate to assist with this modest but important project was, of course, Bob Windows. Much tea was sipped, and many biscuits were consumed, over the next few months. We met, sketched, designed, and discussed and eventually submitted for planning permission. The work started a few weeks ago and things are going extremely well. I had chased Bob for a contract, which in previous fenestration fun, he had drawn up very quickly on acceptance of a quote. This time however no contract was provided. During a visit to check on progress, one of the fitters advised me that he liked working on the job, as he could take his time and do whatever I asked. This was not the norm, but apparently Bob had recently googled me, and discovered that I was COO of an international construction claims company. He had apparently decided that it would be much better not to have a formal contract.

This got me to thinking: why would people think that not having a contract was a good thing?

In truth, he was of course already wrong as we had formed a contract some time ago. We had agreed upon a price, payment terms, the scope of the work, and the specifications of various items. The contract was simply oral, rather than written. Often, smaller independent traders are suspicious of entering into a contract as they are unsure of the content, and what it actually means. They are also unsure of the future, and what events may or may not unfold and how the contract will impact on that. As they are unsure about whether signing the contract will make them better, or worse, off the status quo is the logical choice.

I have acted as mediator in a number of cases where smaller contractors have ended up in some bitter, and expensive disputes. In over half of those cases there has been no clear contract available and in every single case, some clarity over the terms of the bargain made would have helped the parties, and saved money in legal fees. I have also sat on a number of professional review panels, where professionals have done themselves, and their clients, a disservice by not having a contract agreed that reflected the service to be provided. In most cases, phrases like, “I have been doing this for 30 years without a problem…” are very common. In every case, they go away after the hearing resolute that their paperwork will be in apple-pie order in the future.

Reducing an agreement to writing is never going to be a bad thing, if the document correctly records what was agreed. I often point out that oral contracts are rarely worth the paper they are not written on. In the recent case of MacInnes v Gross [2017] EWHC 46 (QB), an agreement over dinner was alleged to give one party a percentage of a business when sold, was found not to be binding. The claim for €13.5M failed.

In many cases party A’s quotation will appear with some clauses printed on the rear of the document in a tiny font and pale grey ink, setting out as many clauses as can possibly be fitted on the page. Party B’s purchase order will no doubt have its own miniature grey wording, as will Party A’s order acknowledgement, and ultimately the delivery note. It is easy to see how confusion arises.

Contracts do not need to be overly complex, and many organisations publish standard forms of contract that can readily be adapted for a specific use. However, ending up without a contract is not something that only happens to small firms. Much larger organisations have become involved in significant projects without concluding a contract. This usually arises when negotiations have been going on for some time, and several offers and counter offers have been exchanged. Each party will often append their terms and conditions to the counter offer, and this game of tennis needs to be followed to ascertain which terms apply or, as often as not, whether any agreement has been reached. Things can get adversarial. This process is often referred to as the ‘Battle of the Forms’, a phrase coined in Butler Machine Tool Co Ltd v Ex-Cell-O Corp Ltd. This case takes the battle analogy further, by suggesting that in some cases the battle is won by the man who fires the last shot. It is also said that, in some cases, the man who fires the first shot may prevail. Perhaps firing both the first and last shots is the best policy.

So, sorting out your agreement in writing, or agreeing a formal contract is a damn good idea. On another positive note, Mrs Wheeler is happy with her garden room, Bob Windows has done a cracking job. Not a shot was fired, first, last, or otherwise, and I’m even reviewing his tiny grey terms and conditions free of charge, having explained that it will protect him and his other clients in future.