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Bespoke Amendments to Standard Contracts Can Be Hazardous

Even in the case of very large construction projects, standard contracts are often employed and the greatest care is needed before making any bespoke amendments to them. That point was strikingly made by the Court of Appeal in a case concerning a £121 million hotel development.

The relevant contract was in standard Joint Contracts Tribunal (JCT) form but amendments were made to its terms, particularly in respect of stage payments due from the developer to the contractor as work progressed. An email, which included a timed schedule in respect of 23 such payments, formed part of the contract.

Final completion of the project was delayed by over a year and, by that time, the 23rd stage payment had been requested and made. The contractor sought a 24th stage payment, but the developer refused to pay on the basis that it was under no contractual obligation to do so. The contractor’s bid to enforce payment of the relevant sum was rejected by a judge.

In dismissing the contractor’s appeal, the Court found that, on a true construction of the amended contract, there was no obligation to make the 24th payment, nor could such an obligation be implied. The schedule of stage payments constituted a complete record of what had been agreed and arguments that further payments accorded with commercial common sense could not avail the contractor.