Pre-contract issues - Construction Contracts - page 18

9 Can pre-contract minutes form a binding contract?
This question was considered in a recent case 6 concerning whether a contract had been
entered into between a contractor and sub-contractor. As is common practice, the contractor
had arranged a meeting with the sub-contractor to go through a pro-forma agenda and agree
all the basics. The meeting duly took place and the contractor produced a set of minutes
which confirmed what had been agreed. Prior to the meeting, the sub-contractor had already
submitted a price and priced part of the bills of quantities. The contractor issued a letter in-
structing the sub-contractor to proceed and saying that a formal sub-contract would be pre-
pared. The sub-contractor neither signed the letter nor the contractor's official order which
followed some days later.
The court's view was that there was a contract on terms agreed at the meeting and con-
firmedintheminutesbecausealltheessentialtermsofthecontracthadbeenagreedbetween
thepartiesatthattime.However,becauseneitherpartyhadframeditsargumentsinthatway,
thecourtwasunabletomakethatdecision.Thecourtthereforedecidedthattheagreedterms
constituted an offer which was accepted by the contractor when it sent its letter instructing
commencement, and the reference to the preparation of a formal sub-contract made no dif-
ference.
Whether an agreement was in writing was an important question if a contract was to be
broughtwithintheHousingGrants,ConstructionandRegenerationAct1996.However,part
8ofthe Local Democracy,Economic Development and Construction Act 2009removed the
requirement that the 1996 Act applied only to agreements in writing. That has been the pos-
ition since October 2011.