ERDC Group Ltd. v Brunel University

ERDC Group Ltd. v Brunel University

The court held that the letters of intent prior to 1 September 2002 constituted binding contracts, and work done under them is to be valued under the JCT Valuation Rules. After 1 September 2002, there was no contract, so ERDC is entitled to a quantum meruit, but the valuation is to be primarily by reference to the previously agreed rates and prices, not cost plus, as these were objectively reasonable and used by both parties. Delay/disruption and time-related costs are only allowed where justified, and Brunel's counterclaim for defects/unfinished work abates ERDC's claim only to the extent of the value of benefit conferred, not as damages. The net sum due to ERDC is the assessed value...

Parties
Claimant/part 20 Defendant: ERDC Group Limited; Defendant/part 20 Claimant: Brunel University
Jurisdiction
England and Wales
Judgment Date
29 March 2006
Procedural Posture
Civil (construction Contract Dispute) / Judgment After Full Trial
Outcome
Judgment for ERDC Group Limited for the balance of its claim, subject to abatement for defects and sums already paid.
Legal Topics
Letters of Intent, Quantum Meruit, Valuation of Construction Works, Delay and Disruption, Counterclaims for Defects
Contract Law Restitution Construction Law Letters of Intent Quantum Meruit Valuation of Construction Works Delay and Disruption Counterclaims for Defects

Case Brief

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Parties

ERDC Group Limited

Claimant/part 20 Defendant

Brunel University

Defendant/part 20 Claimant

Procedural Posture

Civil (construction Contract Dispute) / Judgment After Full Trial

Legal Issues

  1. 1 Whether binding contracts existed prior to 1 September 2002 under letters of intent and their terms
  2. 2 On what basis the works before and after 1 September 2002 should be valued (contractual/JCT rules or quantum meruit)
  3. 3 Entitlement to delay/disruption costs and assessment of time-related costs

Ratio Decidendi

The court held that the letters of intent prior to 1 September 2002 constituted binding contracts, and work done under them is to be valued under the JCT Valuation Rules. After 1 September 2002, there was no contract, so ERDC is entitled to a quantum meruit, but the valuation is to be primarily by reference to the previously agreed rates and prices, not cost plus, as these were objectively reasonable and used by both parties. Delay/disruption and time-related costs are only allowed where justified, and Brunel's counterclaim for defects/unfinished work abates ERDC's claim only to the extent of the value of benefit conferred, not as damages. The net sum due to ERDC is the assessed value...

Court Disposition

Judgment for ERDC Group Limited for the balance of its claim, subject to abatement for defects and sums already paid.

Orders

  • Brunel University to pay ERDC Group Limited £360,110.09 plus VAT of £63,019.26, total £423,129.35.
  • Interest to be awarded in the usual way on sums found due.