Yuanda (UK) Co Ltd v WW Gear Construction Ltd

Yuanda (UK) Co Ltd v WW Gear Construction Ltd

Yuanda did not deal on Gear’s written standard terms of business because material amendments were negotiated and most trade contractors had different terms; thus, section 3 of UCTA 1977 does not apply. Clause 9A, which required the referring party to pay both parties’ adjudication costs, is contrary to section 108 of HGCRA as it fetters the right to adjudicate and must be replaced in its entirety by Part I of the Scheme for Construction Contracts. Clause 4.11.2, providing for 0.5% over base rate interest on late payment, is not a substantial remedy under the Late Payment of Commercial Debts (Interest) Act 1998 and is void, so the statutory rate applies.

Parties
Claimant: Yuanda (UK) Co Ltd; Defendant: WW Gear Construction Ltd
Jurisdiction
England and Wales
Judgment Date
13 April 2010
Procedural Posture
Claim Under Part 8 of the CPR / Judgment After Hearing
Outcome
Declarations granted in favour of Yuanda on clauses 9A and 4.11.2; declaration in favour of Gear on UCTA 1977 section 3 non-applicability; further relief and costs reserved.
Legal Topics
Adjudication Provisions, Unfair Contract Terms Act 1977 (ucta), Late Payment of Commercial Debts (interest) Act 1998, Housing Grants, Construction and Regeneration Act 1996 (hgcra), Interpretation of Standard Terms, Substantial Remedy for Late Payment
Construction Law Contract Law Commercial Law Adjudication Provisions Unfair Contract Terms Act 1977 (ucta) Late Payment of Commercial Debts (interest) Act 1998 Housing Grants, Construction and Regeneration Act 1996 (hgcra) Interpretation of Standard Terms +1 more

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Parties

Yuanda (UK) Co Ltd

Claimant

WW Gear Construction Ltd

Defendant

Procedural Posture

Claim Under Part 8 of the CPR / Judgment After Hearing

Legal Issues

  1. 1 Whether Yuanda dealt on Gear’s written standard terms of business under UCTA 1977
  2. 2 Whether the contract is an international supply contract under UCTA 1977
  3. 3 Whether clause 9A is unreasonable or void under UCTA 1977

Ratio Decidendi

Yuanda did not deal on Gear’s written standard terms of business because material amendments were negotiated and most trade contractors had different terms; thus, section 3 of UCTA 1977 does not apply. Clause 9A, which required the referring party to pay both parties’ adjudication costs, is contrary to section 108 of HGCRA as it fetters the right to adjudicate and must be replaced in its entirety by Part I of the Scheme for Construction Contracts. Clause 4.11.2, providing for 0.5% over base rate interest on late payment, is not a substantial remedy under the Late Payment of Commercial Debts (Interest) Act 1998 and is void, so the statutory rate applies.

Court Disposition

Declarations granted in favour of Yuanda on clauses 9A and 4.11.2; declaration in favour of Gear on UCTA 1977 section 3 non-applicability; further relief and costs reserved.

Orders

  • Clause 9A is void and replaced by Part I of the Scheme for Construction Contracts.
  • Clause 4.11.2 is void as to the 0.5% interest rate; statutory rate of 8% over base applies.