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Architects win invoice dispute after developer ends contract

Posted: 13th December 2017   In: Corporate Commercial

A firm or architects have won their dispute over the payment of a final invoice after a developer unexpectedly dispensed with their services.

The issue arose after the developer had accepted the architects' fee proposal in relation to a housing project.

After a few months, the developer emailed the architects, indicating that it intended to use another firm to prepare the planning application and develop the layout of the project, but would still work with them in relation to house styles.

The architects replied, indicating that their understanding had been that they would be designing the layout and that they had submitted a fee proposal for a full service. They stopped work on the project and submitted an invoice for work up to that point on the basis that their agreed fee was no longer relevant.

The employer failed to pay so the architects obtained an adjudication award.

The developer took further legal action and the court ruled in its favour. It said the developer’s decision to use another firm was a repudiation of the contract, which the architects had accepted. The contract had therefore been discharged.

The Court of Appeal has overturned that decision. It held that the architects had not accepted the developer’s decision as a breach of contract; they had treated it as a termination of the contract without the appropriate notice.

Their final invoice was a claim for money due under the contract, rather than a claim for damages for breach of contract.

The adjudicator's decision had plainly been correct and enforceable.

Please contact Simon Porter if you would like more information about the issues raised in this article or any aspect of contract law.