Practical Law

Desperate times may call for desperate measures, but think carefully before you cross the line.

There is a temptation to do what is necessary to secure the deal, but make sure what you say is accurate.

Fitzroy Robinson v Mentmore Towers

One recent example was the case of Fitzroy Robinson v Mentmore Towers. In that case, the architect did not tell the client that the director who led the bid had resigned, as this would have meant losing the tender. The parties ended up in protracted litigation about this and other issues.

BSkyB v EDS

Telling the employer what he wants to hear rather than what the true position is was also an issue in the BskyB v EDS case decided earlier last year. The defendant was found guilty of fraudulent misrepresentation as a key employee:

“proffered timescales which he thought were those which Sky desired, without having reasonable basis for doing so and knowing that to be the position.”

Emails go viral

It is not only in tender situations that people need to be careful. Commercial pressure can of course also exist during the life of the contract. One particular risk is the quick e-mail sent without thinking.

Every now and then a foolish e-mail gets sent around the world and some people end up feeling very embarrassed. Sometimes, however, it ends up in the courts…

…as was the case in a recent decision by the Birmingham TCC.

Traditional Structures Ltd v HW Construction

In Traditional Structures v HW Construction, a sub-contractor issued a quote for steelwork and cladding. Unfortunately, the copy of the quote sent out only covered the steelwork price (not the cladding price). This meant that the total price was about a half of what it should have been. This should have really been obvious from the start.

Nonetheless, when the sub-contractor found out its mistake and asked the contractor to acknowledge it, the contractor refused. A strong e-mail was sent in instant protest, where the contractor described himself as flabbergasted by the costs and said that other tenders received were at the same low level.

The sub-contractor tried to persuade him to change his mind, saying:

“We trust that this is just a blond moment on your part…”

This may well have fuelled the dispute, and they ended up in court in an argument about that unilateral mistake.

Things do get looked at in more detail when there are court proceedings and it turned out that the contractor was not telling the truth when he said that other contractors tendered for the same low price. In fact, he had to explain himself in his witness statement:

“I was upset and angry… I also implied that other contractors have submitted prices of not much more that TS at tender stage. In fact this is incorrect.  …I am not sure why I said this, but I think it was a combination of not having my papers in front of me, having my holiday ruined and being very angry. It was a knee jerk reaction in the heat of the moment and which I now regret. With hindsight, I should have spent longer considering my position and my response, before e-mailing TS.”

It is not impossible to feel some sympathy for the contractor who had to deal with this issue while on holiday. However, none of the reasons given justify the decision to make an untrue statement to support his position. It seems that, had he taken some time to consider what he had written, he may not have sent the same e-mail.

Unsurprisingly, the sub-contractor’s claim for rectification succeeded.

E-mail self-discipline

Traditional Structures is a good incentive to practice e-mail self discipline. Printing an e-mail and reading it before sending may waste paper but is a good way to help ensure things are not said in the heat of the moment, once the send button is pressed.

Overall, there are plenty of reminders from the courts that there is no excuse for making statements which are not true.