How important is a written contract?

We are often instructed in relation to disputes between homeowners and builders/building contractors.

The homeowners usually complain that the job done by the builder is not satisfactory.

While, on the other hand the builders often complain about not receiving payments from the homeowners on time, which leads to unnecessary delays in carrying out the works.

Most of these disputes lack relevant documentation and evidence in support and in the event any dispute arises. Communications and agreements are generally done verbally and at most they are handwritten. Only few go through the formal process and negotiating and agreeing a written contract. Invoices and receipts are mostly handwritten which leads to allegations of tampering with the evidence etc.

Brief facts

In a case of similar nature, we were instructed by a homeowner (“Our client”) who was taken to a county court by a builder who had been commissioned to build a residential extension to a property where our client was living with his family. Our client was not satisfied with the work carried out by the builder and on the other hand the builder complained that he had completed the work satisfactorily and filed a civil claim against our client for a large sum of monies outstanding towards the building works.

The discussions and negotiations on costs for the work were carried out verbally between the parties. There was no written contract between the parties agreeing to particulars of the work to be carried out, costs and time estimate in order to complete the works.

Trouble ensued between the parties after the works were commenced. The builder had a whole host of complaints against our client ranging from alterations to agreed instructions which led additional works, delay in payments and tampering of the handwritten receipts for the payments already made.

On the other hand, our client maintained that the quality of work was not satisfactory, works were incomplete, a delay in completing the works by more than 3 months and that the builder had overcharged for work which was never completed.

The builder brought a claim against our client claiming the outstanding invoice and for the works that he said that had been completed.

The trial

Our client defended the proceedings and also filed a counter claim seeking damages from the builder for the loss that he had suffered by making excess payments for works which were never carried out by the builder.

Both the claim and the counter claim had come up for hearing together.

At the trial, it emerged that the handwritten receipts were pivotal evidence on which the case hinged. Though the builder disputed the veracity of the receipts, but there was no scientific evidence to back such claim. On the other hand, our client maintained his position that the receipts were genuine, and all the receipts taken together showed a substantial over payment to the builder.

The builder was also not able to substantiate his claim and could not produce any invoice describing the works / jobs for which the claimant remained unpaid. The builder also failed to adduce any witness evidence in support of the claim. It proved difficult for the court to believe that the builder who remained unpaid, had continued to carry out the work or the additional work, when he could have simply stopped carrying out the work until payments were received.

Order

We were successful in defending our client. The court dismissed the claim of the builder and in addition upheld the counter claim of our client and awarded damages.

The builder was further ordered to pay the legal costs that our client had incurred in defending the claim as well pursuing the counter claim.