A C Controls Ltd v British Broadcasting Corporation [2002] EWHC 3132 (TCC) (26 November 2002)

A C Controls Ltd v British Broadcasting Corporation [2002] EWHC 3132 (TCC) (26 November 2002)

The court held that the initial letter of intent constituted a limited contract for survey and pre-installation work, capped at £250,000. The subsequent letter of 7 July 1999 authorised ACC to proceed with the full works up to a total of £500,000, but did not create a full formal contract. No formal contract was ever executed. ACC was entitled to payment for work performed up to the authorised cap, but not beyond, unless further authorisation was given. The BBC was entitled to recover any overpayment. The contractual relationship was governed by the terms of the letters of intent and not by a superseding detailed contract.

Citation
[2002] EWHC 3132 (TCC)
Parties
Claimant: A C Controls Limited; Defendant: British Broadcasting Corporation
Jurisdiction
England and Wales
Judgment Date
26 November 2002
Procedural Posture
Trial / Judgment
Outcome
Claim partly allowed; counterclaim partly allowed
Legal Topics
Letters of Intent, Formation of Contract, Quantum Meruit, Contractual Interpretation, Cost Capping, Variation of Contract
Contract Law Construction Law Letters of Intent Formation of Contract Quantum Meruit Contractual Interpretation Cost Capping Variation of Contract

Case Brief

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Parties

A C Controls Limited

Claimant

British Broadcasting Corporation

Defendant

Procedural Posture

Trial / Judgment

Legal Issues

  1. 1 What was the contractual basis for the work performed by ACC?
  2. 2 Did the letter of intent constitute a binding contract or merely an 'if' contract?
  3. 3 Was there a cost cap or ceiling on ACC's entitlement to payment?

Ratio Decidendi

The court held that the initial letter of intent constituted a limited contract for survey and pre-installation work, capped at £250,000. The subsequent letter of 7 July 1999 authorised ACC to proceed with the full works up to a total of £500,000, but did not create a full formal contract. No formal contract was ever executed. ACC was entitled to payment for work performed up to the authorised cap, but not beyond, unless further authorisation was given. The BBC was entitled to recover any overpayment. The contractual relationship was governed by the terms of the letters of intent and not by a superseding detailed contract.

Court Disposition

Claim partly allowed; counterclaim partly allowed

Orders

  • ACC entitled to payment for work performed up to £500,000 as authorised by the letters of intent.
  • BBC entitled to recover any overpayment to ACC beyond the value of work properly performed and authorised.