22nd March 2019

Can a partially signed JCT contract be binding?

In the recent case of Anchor 2020 Ltd v Midas Construction Ltd[1], the Technology and Construction Court held that the employer and the contractor agreed a binding contract based on the 2011 edition of the JCT Design and Build Contract, even though it had only been signed by the contractor.

In the recent case of Anchor 2020 Ltd v Midas Construction Ltd[1], the Technology and Construction Court held that the employer and the contractor agreed a binding contract based on the 2011 edition of the JCT Design and Build Contract, even though it had only been signed by the contractor.

The employer, Anchor 2020 Ltd, engaged Midas Construction Ltd as the contractor in relation to a project concerning the construction of retirement accommodation in Hampshire. The works undertaken by Midas initially were carried out under a series of letters of intent while the negotiations of the JCT contract were ongoing.

In July 2014 Midas signed the JCT contract. At that point, the essential terms of the JCT contract – including the contract sum analysis, the schedule of amendments and the form of consultant novation agreements - had been agreed.

Following the Supreme Court’s previous decision applying an objective assessment on the parties' intention to judge whether they reached an agreement[2], Mr Justice Waksman held that it is possible for the parties to be bound to an unsigned contract, even if the contract provides otherwise. In this recent case, the judge's findings on whether there was a contract formed were heavily based on the facts. ct form de depended there was a contract form depended atarties to contact on the

The judge’s comments on how he would have valued the works had he not found that there was a binding contract are also valuable. He noted that had there been no contract in place, Midas would have been entitled to “reasonable remuneration” for the works carried out after the period covered by the letters of intent, and the proper basis for the valuations would have been the terms of the unsigned JCT contract.

By coming to this conclusion, the judge found it relevant that Midas had carried out some work under the letters of intent, the parties agreed the contract sum analysis, and after the expiry of the last letter of intent Midas' works were performed and applications for payment were made in accordance with the JCT contract’s terms.

For further commentary on this case, please contact Eszter Lakos, or another member of  the Thrings Construction and Engineering Team.


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