Stick to the terms of your contract!

The Technology and Construction Court has refused to allow an employer to recover alleged overpayments under a repair and maintenance contract.

The dispute concerned a property maintenance contract on which the parties had in practice operated a pricing and payment system that differed from that specified within the contract. Whether the overpayments were knowingly paid or simply a regrettable oversight, the employer alleged that it should be entitled to recoup the alleged overpayments to the contractor by making deductions from subsequent payments properly due under the contract.

The Court disagreed and, after a detailed review of the conduct of the parties during the performance of the contract, held that the doctrines of “estoppel by convention” and “estoppel by representation” prevented the employer from making that deduction.

So what can we learn from this case? Pay attention to the details – having shrewdly negotiated a contract, be sure to check that you are acting in line with that contract as failure to do so can alter the terms of the contract and there’s no way back!

Mears Ltd v Shoreline Housing Partnership Ltd [2015] EWHC 1396 (TCC)

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