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The Construction Industry for Negotiating Parties - Research Paper Example

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This paper demonstrates that notwithstanding the current legislative framework for addressing safety in the construction industry, there appears to be a significant inconsistency between various facets of the hierarchy within the industry to ensure adequate safety compliance protection…
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The Construction Industry for Negotiating Parties
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Download file to see previous pages The leading decision in this area is British Steel Corporation v Cleveland Bridge & Engineering Co Limited where it was held that that where work was undertaken pursuant to a letter of intent, in most cases it would not matter whether the formal contract was concluded. If the parties had acted on the letter of intent, then payments claim would due on a quantum meruit basis under restitution. However, the inherent difficulty with a letter of intent is where a party is seeking to claim damages for breach of contract and it is argued that no contract is entered into. Accordingly, the issue of whether a contract is in existence is vital. Moreover, if there is no contract, it begs the question as to what sums the CCL is entitled to under quantum meruit principles. In British Steel, it was held that the letter of intent covered pre-contractual negotiations and as no terms had actually been agreed, there was no binding contract. Therefore, the extent to which a contractor can rely on the letter of intent to enforce their rights will inherently be dependent on what terms are agreed to in the letter of intent itself. In the British Steel case, for example, it was evident that issues pertaining to price, delivery dates and the applicable terms and conditions had not been agreed. As such, the Court concluded that there was simply an obligation upon Cleveland to pay a reasonable sum for such work as had been done pursuant to its request contained in the letter of intent on a quantum meruit basis.
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