Manfate Pty Ltd v Krahe & Krahe (No 1) [2016] NSWDC 70

Manfate Pty Ltd v Krahe & Krahe (No 1) [2016] NSWDC 70

There was no fixed price contract between the parties; the oral arrangement evidenced a flexible and informal agreement, and the plaintiff is entitled to recover at actual cost for the work performed. The estimate provided by the plaintiff was not a firm quote, and the parties operated based on trust and mates' rates. Damages are awarded for unpaid actual costs and interest, not on quantum meruit or for unjust enrichment exceeding contract damages.

Parties
Plaintiff: Manfate Pty Ltd; First Defendant: Peter Krahe; Second Defendant: Paula Krahe
Jurisdiction
Australia
Judgment Date
17 March 2016
Procedural Posture
Civil / Principal Judgment After Trial
Outcome
Judgment for the plaintiff
Legal Topics
Oral Contract for Construction, Breach of Contract, Quantum Meruit, Damages, Interpretation of 'estimate' Vs 'quote', Contract Variation, Unjust Enrichment
Building and Construction Law Contract Law Oral Contract for Construction Breach of Contract Quantum Meruit Damages Interpretation of 'estimate' Vs 'quote' Contract Variation +1 more

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Parties

Manfate Pty Ltd

Plaintiff

Peter Krahe

First Defendant

Paula Krahe

Second Defendant

Procedural Posture

Civil / Principal Judgment After Trial

Legal Issues

  1. 1 Was there a fixed price contract or an estimate for restaurant construction?
  2. 2 Were there contract variations and how should they be priced?
  3. 3 What is the appropriate measure of damages in the absence of a fixed price contract?

Ratio Decidendi

There was no fixed price contract between the parties; the oral arrangement evidenced a flexible and informal agreement, and the plaintiff is entitled to recover at actual cost for the work performed. The estimate provided by the plaintiff was not a firm quote, and the parties operated based on trust and mates' rates. Damages are awarded for unpaid actual costs and interest, not on quantum meruit or for unjust enrichment exceeding contract damages.

Court Disposition

Judgment for the plaintiff

Orders

  • Judgment for the plaintiff Manfate Pty Ltd against the defendants Peter Krahe and Paula Krahe in the amount of $122,335.10 inclusive of interest