Law for Surveyors
Scenario
You are a surveyor on the staff of a well-known established consultancy M Harris LLP. Your client, Thistlewood Holdings PLC, is the owner and operator of ‘The Paradise Centre’, a large, modern, mixed-use retail site based in the City of Liverpool, UK.
Your client recently appointed a contractor known as Axis Limited to undertake the major refurbishment of its ‘flagship’ luxury retail unit located within The Paradise Centre.
A brief pre-commencement site meeting was held to discuss the works, but no contract was formalised between Thistlewood Holdings and Axis. As Axis have worked with your client previously without issue, a contract was not considered to be necessary.
The contractor had progressed works to the satisfaction of your client until a recent design team meeting held midway through the project. At that meeting Thistlewood Holdings confirmed that as
Axis had overvalued their previous application for payment, your client intends to deduct the overpayment from the contractors next payment application. At the same meeting, Axis responded to suggest that far from overvaluing the previous payment application, your client had in fact significantly undervalued the same application.
Senior surveyors from both organisations hold urgent talks to try to rectify the situation but fail to make progress on this issue and a wide range of other complex technical points relating to structural alterations and mechanical and electrical services. Axis threatens to suspend all works imminently if the matters cannot be resolved within the next one to two months. The parties are now engaged in an ongoing dispute.
Your client cannot tolerate a significant delay to completion of the refurbishment of the unit. The Paradise Centre is under financial pressure to re-let the prime retail unit and has been receiving negative publicity on social media and in local press relating to their failure to re-let the prominent premises.
To move forward, your client considers that their only remaining option is to take matters to court in order to obtain a decision on the sums in dispute. Your client seeks your advice.
Task
Use your knowledge of the law of contract and dispute resolution methods to write a report that advises your client, Thistlewood Holdings, on the enforceability of their agreement with Axis together with the most appropriate method/s that could be used to resolve the points in dispute between the parties.
Your report must provide legal advice and you should:
a. using legal principles, outline the elements that must be present to form a legally binding contract;
b. use your knowledge of contract formation to critically examine whether an agreement has been formed between the parties using appropriate legal principles;
c. examine the scenario facts to reach reasoned conclusions as to the most effective form(s) of dispute resolution available to Thistlewood Holdings in the context of the presented scenario.
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Sample Solution
The agreement between Thistlewood Holdings and Axis is most likely to be enforced via the Law of Contract. The law of contract requires that there must be an offer, acceptance and consideration in order for a legally binding contract to exist. In this case, it appears that the parties had discussed the works that were required and neither party raised any objections or reservations about the scope or price of the works. This suggests that all three elements were present.
However, given that no formal agreement was entered into between Thistlewood Holdings and Axis, it may be difficult to enforce certain obligations should a dispute arise. Therefore, it is essential that both parties are clear on exactly what they have agreed upon before commencing work on such projects in future.
In terms of resolving the points in dispute between Thistlewood Holdings and Axis, there are several methods available including alternative dispute resolution (ADR) such as mediation or arbitration; litigation through court proceedings; or negotiation by way of direct dialogue between the two parties involved. ADR is often considered to be a cost-effective way for both sides to settle their differences without having to resort to lengthy legal proceedings which can be expensive and time-consuming. If ADR fails then litigation may become necessary in order to obtain a decision from an impartial third party (the court). Negotiation is another viable option but relies heavily upon trust between both parties as well as being able to reach an amicable solution through informal discussions rather than formal legal procedures (O’Brien & Sims 2019).
In conclusion, given the current situation involving Thistlewood Holdings and Axis Limited with regards to their refurbishment project at ‘The Paradise Center’, my advice would be for them both to engage in some form of ADR process in order resolve their differences quickly before turning towards more costly legal action if necessary.