When a letter can amount to a written contract

A firm of architects has won a dispute over fees after the High Court ruled that a letter it had sent to its client did amount to a written contract.

The case arose after the architects agreed to carry out consultancy services for a local authority under a framework agreement. The work was to be carried out in two stages. 

The first stage was completed without incident but there was a disagreement about fees for the second stage. 

The architects claimed they were entitled to charge commission at 5.5% as set out in a letter they had sent to the authority. They argued that the authority had effectively accepted those terms by its conduct in allowing the work to go ahead.

The authority maintained that the overall framework agreement required that commissions had to be renegotiated for the second phase. Those negotiations had not taken place and there was no written contract in relation to paying commission of 5.5%.

The court ruled in favour of the architects. It held that the terms were set out in the letter. The authority had effectively accepted those terms by allowing the work to go ahead. The architects were therefore entitled to their fees.

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