Cases - Emcor Drake and Scull Ltd v Sir Robert McAlpine Ltd

Record details

Name

Emcor Drake and Scull Ltd v Sir Robert McAlpine Ltd

Date

[2004]

Citation

ECA Civ 1733 (21 December 2004)

Keywords

Construction contract – offer – acceptance - letter of intent – successive letters of intent – agreement to cap liability - protracted and difficult negotiations – Repudiation - whether contractor entitled to be paid reasonable sum up to liability cap

Summary

Emcor Drake and Scull (EDS) were appointed under the terms of successive letters of intent by Sir Robert McAlpine Ltd (McAlpine) to work on the mechanical and electrical services on a hospital in Dudley.

Negotiations of the terms of the subcontract were protracted and difficult. Concurrent with the negotiations of the subcontract works were proceeding and EDS were issued with successive letters of intent each raising the limit of expenditure.

Ultimately there came a point where EDS refused to accept any more letters of intent and walked off site.

The court held that EDS were entitled to refuse further letters of intent. They were under no obligation to complete the whole of the mechanical and electrical services but merely to carry out the M&E works up to the value of the latest accepted letter of intent (in this case £14m).

The judge therefore concluded that EDS were entitled to be paid a reasonable sum for the works that it had carried out up to a limit of £14m.