In Jaevee Homes Limited v Mr Steve Fincham (trading as Fincham Demolition) [2025] EWHC 942 (TCC) the Technology and Construction Court ("TCC") considered the principles of formation of contract in a less formal context, and ruled on whether a simple invoice could suffice as an application for payment. The case serves as a warning to take care when negotiating agreements.
Background
This case concerned a contract for the demolition of a nightclub in Norwich. The parties discussed the works in person in April 2023, and Mr Fincham issued a written quotation on 11 May 2023, providing for a fixed price of £256,000 + VAT.
The parties subsequently exchanged emails and WhatsApp messages, discussing the timescale for the works and haggling over the price, which resulted in Mr Fincham proposing a reduced price of £248,000 + VAT. The following is an abridged version of an exchange between the Mr Fincham and the CEO of Jaevee, Ben James, by WhatsApp on 17 May 2023:
Ben James: Can you start on Monday?
Steve Fincham: I can start with getting the scaffolding sorted and stuff on Monday mate but men will start the following Monday
Steve Fincham: Ben Are we saying it's my job mate so I can start getting organised mate
Ben James: Yes
Ben James: Monthly applications
Steve Fincham: Are you saying every 28 or 30 days from invoice that's a yes …
Ben James: Ok
On 26 May 2023 an employee of Jaevee emailed Mr Fincham with a purchase order, attaching Jaevee's standard terms of business. Mr Fincham then commenced demolition works on 30 May 2023.
Court Proceedings
Following a payment dispute, Mr Fincham launched a successful smash and grab adjudication against Jaevee, which was enforced by the TCC. Jaevee then issued a Part 8 claim seeking a declaration that: (1) Jaevee's standard terms of business applied to the works; (2) the contract required Mr Fincham to issue applications for payment on a monthly basis and (3) the invoices issued by Mr Fincham were not valid applications for payment under the Housing Grants, Construction and Regeneration Act 1996 ("The Construction Act").
In relation to the contract, Jaevee argued that the WhatsApp exchange did not cover the essential terms of a construction contract, and was therefore not a valid agreement. Instead, by commencing the works after the issuing of Jaevee's standard terms, Mr Fincham had accepted those terms by his conduct.
It was held by the court that the parties had agreed on the scope of works, the start date of the works, the price, and a basic payment mechanism. While it is a requirement of construction contracts to contain detailed payment terms, the parties' lack of full express agreement on this issue was not fatal to the contract. The Judge held that the parties had agreed that Mr Fincham was entitled to issue one payment application per month, that the relevant final date for payment was at latest 30 days after the payment application was issued, and that the terms of the Scheme for Construction Contracts would fill the gaps in the payment process.
The court then required to answer the question of whether the invoices submitted by Mr Fincham were sufficient to constitute valid applications for payment. The court considered in particular the Construction Act's requirement for an application for payment to set out the basis on which the sum considered due was calculated. As an example, the first invoice provided by Mr Fincham provided the below:
"Mr Ben James as Agreed On The First Interim Payment To Be Paid On Return
First Interim Payment.
Employees, Scaffolding, Machines supplied
Works Carried Out On The Removal Of The Ceiling, Breaking Up The station Bases, The Concrete Bases, Taking Down The Metal Staircase, Breaking Up The Main Staircase, A Second Staircase & Breaking Up The Third Staircase By Hand.
First Interim Payment £48,000 + 5% VAT Leaving £200,000 On Account
As Our Agreement Next Invoice To Be Paid 28-30 Days From Date Of Invoice"
Mr Fincham argued that the invoices contained all that was needed to understand the sum sought. This argument won favour with the judge who held that the invoices were sufficient to amount to a valid application for payment. Informing the judge's decision were two cases in particular: Advance JV v Enisca Ltd [2022] EWHC 2252 (TCC), which provided a useful summary of the principles applicable to the validity of notices under a construction contract; and Everwarm Ltd v BN Rendering Ltd [2019] EWHC 3060 (TCC), in which it was remarked that such a short-form basis of calculation may be acceptable where the works were priced by a lump sum, as there is nothing else that can be stated in order to specify the basis on which the sum is calculated.
Implications
When making an agreement, simply following up with full terms after the fundamentals are agreed will not incorporate them into the agreement without further terms. A party in Jaevee's position not wishing to be bound should make it expressly clear that nothing is agreed until everything is agreed. A clear signal to go ahead with the job at a defined price goes a long way to signalling that an agreement has been reached, and seeking to apply standard terms after this point may not be successful.
This case also shows the courts' preference not to take an unduly legalistic approach when considering applications and notices under a construction contract. While it is always prudent to clearly identify the formal requirements for applications for payment prior to commencing works, and highly important to keep to these requirements, there is a degree of leeway given if arrangements are a little less formal.
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