Introduction - Building Contract Claims - page 5

therefore, avoiding the need for mobilisation costs 8 . Valuable guidance was
given on the basis of quantum meruit in Serck Controls Ltd v. Drake & Scull
Engineering Ltd 9 where Drake & Scull had given a letter of intent to Serck
instructing them to carry out work on a control system for BNFL. Part of the
letter said:

'In the event that we are unable to agree satisfactory terms and conditions
in respect of the overall package, we would undertake to reimburse you
with all reasonable costs involved, provided that any failure/default can
reasonably be construed as being on our part.'

The way in which the quantum meruit was to be calculated was the basis of
the trial. Several points of interest were considered.
Judge Hicks had to consider whether, by 'reasonable sum', was meant the
value to Drake & Scull of Serck's reasonable costs in carrying out the work.
In his view the term quantum meruit covered the whole spectrum from one to
the other of these positions. Reference to 'reasonable sums incurred' entitled
Serck to reasonable remuneration. 'Costs' implied the exclusion of profit
and, possibly, overheads, but the judge did not believe that they were
excluded in this instance.
What, if any, relevance was to be placed on the tender? Because the tender
did not form part of any contract, its use was limited. It could not be the
starting point for the calculation of the reasonable sum. Probably its only
use was a check on whether the total amount arrived at by other means was
surprising.
So far as site conditions were concerned, if the criterion was the value to
Drake & Scull, site conditions in carrying out the work would be irrelevant.
If the starting point had been an agreed price, the only relevant points
would have been any changes to the basis of the price. On the basis of a
reasonable remuneration, the conditions under which the work was actually
undertaken were relevant: if the work proved to be more difficult than
expected, Serck were entitled to be recompensed.
The conduct of the two parties was considered, particularly allegations
that Serck had worked inefficiently and what effect that had on the
calculation of quantum meruit . It was held that if the value was to be worked
out on a 'costs plus' basis, deductions should be made for time spent
in repairing or repeating defective work, and for inefficient working. If
the value was to be worked out by reference to quantities, the claimant
gains nothing from such deficiencies and, if attributable to the claimant or
his sub-contractors, they are irrelevant to the basic valuation; extra time and
expense enter into the picture at this stage only if relied upon by the
claimant as arising without fault on his part. Defects remaining at comple-
tion should give rise to a deduction, whatever method of valuation was
chosen.

8 Costain Civil Engineering Ltd and Tarmac Construction Ltd v. Zanin Dredging & Contracting Company
Ltd (1996) CILL 1220
9

(2000) CILL 1643.