In Traditional Structures Limited v HW Construction Limited [2010] EWHC 1530 (TCC) the Claimant submitted a tender in early 2008 for the supply and installation of structural steel work and roof cladding at a development in Sutton Coldfield. In the file copy of the tender submission the following words appeared under the heading ‘Prices’:-
“For the supply and delivery of structural steel work and claddings erected onto prepared foundations (by others) to form the proposed buildings as detailed above our budget prices would be:
Steel work - £37,573.43 plus VAT
Claddings - £32,365.83 plus VAT”
The copy sent to HW Construction did not include the final line thus omitting the specified price for claddings. HW Construction subsequently sent an email to Traditional Structures requesting some further clarification on the details of their tender. Traditional Structures were also asked by email to confirm how long its quotation of £37,573.43 for the floor support beams and roof structure was open for.
HW Construction were subsequently awarded the main contract and following a telephone conversation, Traditional Structures’ tender was accepted for the steel work and cladding portions of the work. Revised prices were then sent to HW Construction including some variations to the steel work and cladding. The revised details specified the separate prices and came to a total of some £76,000. HW Construction protested on the basis that Traditional Structures’ initial quotation was for £37,573.43.
Due to time constraints an order was placed on the basis of the revised details but HW Construction reserved their right to bring a claim against the subcontractor. The matter was subsequently referred to the Technology and Construction Court by Traditional Structures who asked the Court to exercise its discretion and rectify the subcontract to include the missing sentence regarding the cladding. The claim was advanced on the basis that Traditional Structures had unilaterally made a mistake by omitting these important words when the initial tender documents were sent out. As an alternative argument, Traditional Structures submitted that the subcontract included a term implied by Section 15 of the Supply of Goods and Services Act 1982 i.e. that it would be paid a reasonable price for its works and Traditional Structures were entitled to further payment for its works.
The Court found for Traditional Structures and directed that the subcontract should be rectified so as to include the missing details of the price for the cladding work. The Court went on to hold that, even if it had decided not to rectify the sub-contract, Traditional Structures were still entitled to be paid a reasonable price for the works and services it had provided. The Court found that on the evidence presented to it, any reasonable professional reader of the initial tender would have appreciated that the figure of £37,573.43 must have related to just the structural steel work element of the proposed works. HW Construction was, or ought to have been, on notice at that stage that the low price was unlikely to include the cladding work. The fact that HW Construction had subsequently contacted Traditional Structures requesting further information regarding its price strongly indicated that it had actual knowledge of the mistake in the quotation.
By failing to make honest enquiries regarding the price, HW Construction was found to have acted in an unconscionable way - even though the parties were involved in a commercial transaction at arms length. This decision emphasises the importance of certainty when entering into commercial agreements.
