The claimant, Westminster Building Company Limited, tendered for refurbishment works of a property and by the defendant Mr Beckingham at 40 Willesden Square, London WC1. Part 1 of the specification stated that the contract would be in the form of a JCT IFC 1998 incorporating Amendments 1, 2 and TC/94/IFC. The specification listed various amendments and provided the necessary details for insertion into the Appendix. The letter of intent dated 27th June 2002 instructed the claimants to proceed with the work in accordance with the specification and drawings. The commencement date was to be 15th July, and the work was to be completed by 18th October 2002. It also stated:

“My Surveyor will be progressing the preparation of the formal contract documents over the next few weeks for signature by both parties, in the interim please proceed to make arrangements for the implementation of the works. In the unlikely event of matters not progressing I would confirm that you will be reimbursed any reasonable expenditure in connection with the project”.

The work started on site on 15th July 2002, and the day after the surveyor’s forwarded a completed IFC Form of Contract for signature. Some of the details were different, most of them minor, save perhaps for the date for completion which had been changed. Nonetheless, the contractors signed and returned it on about 19th July 2002. The defendant never signed it. Work proceeded and interim certificates were issued. On 20th February 2003 a “capping agreement” was signed. It stated that the fees would not exceed £300,000 including VAT, and provided staged release of retention. The documents were signed by both parties. Payment certificates 5 and 6 were issued, and by that stage the contractor had been paid £284,209.90. Mr Beckingham refused to pay on the basis that the maximum sum due was £270,000 (after deduction of the £30,000 retention) in accordance with the capping agreement. He did not serve a withholding notice. The dispute was referred to an adjudicator who decided that Mr Beckingham should pay Westminster £122,409.16 plus interest. A variety of issues arose: (1) was the contract governed by an adjudication clause, (2) did the adjudicator have jurisdiction to deal with the dispute because of the capping agreement, and (3) was the adjudication clause unfair and therefore not binding. The parties agreed that HHJ Thornton QC should treat the summary judgment application as a trial of the issues based upon the documents without a cross-examination. HHJ Thornton QC held that the letter of intent was not sufficient to form a contract because when the body of the letter was read with the last paragraph the intention was clearly that if a contract was not concluded then the contractor would be reimbursed any reasonable expenditure. Further, a formal contract document was also anticipated by the parties. A formal contract was prepared and signed by the contractor and presented to Mr Beckingham for signature. By receiving the signed contract and then remaining silent whilst allowing the works to proceed Mr Beckingham was:

“clearly signifying acceptance of the terms of the contract pro-offered by Westminster and was waiving any pre-condition as to signature, if such was the effect of the wording of the letter of intent.”(paragraph 15).

The absence of executed documentation did not preclude the Court from finding that a binding contract had been entered into because all of the necessary ingredients for a valid contract were in existence (Stent Foundations v Carillion (2001) 78 Con LR 188 and Harvey Shop Fitters Limited v ADI Limited [2003] EWCA Civ 1757). The capping agreement set the fee at £300,000, and provided a mechanism for release of retention. Unlike Shepherd Construction Limited v Mecright Limited [2000] BLR 489 the capping agreement did not amount to a settlement agreement. The adjudicator had decided that the Agreement was a variation to the original contract but was of no affect because it was not supported by consideration (Williams v Roffey Brothers & Nicholls (Contractors) Limited [1991] 1 QB 1). In the absence of a withholding notice Mr Beckingham had no surviving defence to resist payment of the decision, save for a challenge pursuant to the unfair Terms in Consumer Contracts Regulations 1999. HHJ Thornton QC held that those regulations, whilst applicable, did not assist Mr Beckingham because the contract was in plain language, Mr Beckingham had been professionally advised, there was no significant imbalance in the terms of the contract, and the adjudication clause did not significantly exclude or hinder the consumer’s right to take legal action. In conclusion, the decision was binding and summary judgment was given in favour of Westminster.