Cases - Galliard Homes Ltd v J Jarvis and Sons plc

Record details

Name

Galliard Homes Ltd v J Jarvis and Sons plc

Date

[2000]; [2000]

Citation

CLC 411; BLR 33; 71 Con LR 219

Legislation

Companies Act 1985

Keywords

Construction contract – letter of intent – agreement that contract documents would be executed as deed - requirement for formal contract – certaint

Summary

Galliard Homes had appointed Jarvis in this case on the basis of a letter of intent. The invitation to tender and the draft contract documents stated that the contract documents would be executed as a deed. Directors from the respective companies subsequently met, agreed terms and shook hands. However, contract documents were never executed.

A dispute subsequently arose as to the contractual nature of the directors' agreement. The court held that the intention of the parties was that formal contract documents would be executed as a deed. Therefore, the agreement of the directors had no contractual significance.

This case demonstrates how uncertainties (and therefore disputes) can arise when projects are proceeding on the basis of letters of intent, with negotiations proceeding in the background.