1. Absence of novation sinks adjudication award against assignee
A contractor obtained an adjudication award against an assignee of its employer, which had gone into administration. But was that assignee the correct respondent in the adjudication? The assignment transferred the benefit of the contract to the assignee but had it also, in some way, transferred the burden so that the assignee was liable?
Ruling that it had not, and that the adjudicator consequently had no jurisdiction, the court provided a clear reminder of the critical difference between assignment and novation. It is trite law, said the court, that only rights and benefits, and not burdens, obligations and liabilities under a contract may be transferred by an assignment. Further, the contractual relationship under the original contract is not affected by the assignment, beyond the transfer of such rights to the assignee. The assignee does not become a party to any contract which contains or gives rise to the rights, unless there has been a novation.
The court also noted that:
- (Subject to any express contractual restrictions) a party to a contract can assign the benefit of a contract, but not the burden, without the consent of the other party to the contract;
- in the absence of any clear contrary intention, reference to assignment of the contract by the parties is understood to mean assignment of the benefit, that is, accrued and future
rights; - novation would require the consent of all three parties.
As noted in previous case law, it is possible to assign future rights under a contract without the accrued rights but clear words are needed to give effect to such intention.
Grove Construction (London) Ltd v Bagshot Manor Ltd [2025] EWHC 591
2. Court of Appeal confirms how to spot a condition precedent (and warns against relying on other cases)
In May 2024, Mr Justice Constable (see June 2024 update) ruled that two contract clauses created conditions precedent. On appeal, the Court of Appeal had to review his decision on just one of those clauses and whether a breach of that clause prevented the defendants from being able to recover £1.592 million by way of what were called Delay Payments (similar to liquidated damages). In doing so the Court reviewed the characteristics of a condition precedent.
Dismissing the appeal, Lord Justice Coulson noted that it is a futile exercise to endeavour to articulate an exhaustive checklist of the factors that fall to be considered in any investigation into whether a particular clause was a condition precedent, or not, but, from the case law, he identified these general principles:
- Whether or not a party has to comply with one or more stated requirements before being entitled to relief will turn on the precise words used, set within their contractual context;
- to be framed as a condition precedent, a clause needs something that makes the relief conditional upon the requirement;
- as with exclusion clauses or clauses which seek to limit liability, clear words will usually be necessary for a clause to be a condition precedent but it is not necessary for the clause to say in terms "this is a condition precedent": none of the clauses in the case law considered, which were found to be conditions precedent, used those words;
- in addition to conditionality, it will usually be necessary for the link between the two steps to be expressed in the language of obligation (i.e. shall) but that will not on its own be sufficient to amount to a condition precedent;
- it is not necessary for the step one condition to be expressed in a finite number of days or weeks. More flexible periods – "timely", "within a reasonable time" etc - have been included in clauses which courts have found to be a condition precedent.
The Court also noted the comments of Mr Justice Leggatt (as he was) that it is seldom, if ever, helpful in deciding how to interpret particular contractual provisions to refer to a case in which a court has interpreted different provisions of a differently worded contract made in a different factual context.
Disclosure and Barring Service v Tata Consultancy Services Ltd [2025] EWCA Civ 380
3. Contract by WhatsApp? No problem
A dispute between a property developer and a demolition contractor, as to whether and how a contract had been concluded, its terms, and the validity of certain payment applications, ended up in court. Messages about the formation of a contract had been exchanged by email and WhatsApp messages but were those informal exchanges enough to make a contract?
Yes, ruled the court. The WhatsApp messages, while informal, evidenced and constituted a concluded contract.
The developer disputed this, claiming that essential terms had not been agreed. There was no agreement as to the duration of the works but was that a problem? Rejecting this claim, the court noted that agreement as to the duration of contract works is not an essential element of a construction contract. In the absence of express agreement, there is an implied term that the contractor will complete within a reasonable period.
The developer also said no start date had been agreed. Did that matter? The court ruled that a start date had been agreed but, even if it had not, agreement as to a precise start date was not an essential term of the contract.
The developer also claimed that payment terms had not been agreed. This argument similarly failed. The absence of payment terms is not inconsistent with the existence of a concluded contract. An important target of the Construction Act is to fill the gap if a contract does not contain appropriate payment terms.
The court also concluded that the parties intended that the works should be started as soon as possible. They had agreed when the contractor would come to site, the scope of the works, the price and payment terms and there was no express indication that the final terms of the agreement depended on agreement as to any other matter, such as incorporation of the developer’s standard terms of contract.
Jaevee Homes Ltd v Mr Steve Fincham (trading as Fincham Demolition) [2025] EWHC 942 (no link available)
4. Dame Judith Hackitt to chair Building Control Independent Panel
The government has appointed members of the new Building Control Independent Panel, which will be chaired by Dame Judith Hackitt.
The panel is to conduct a thorough and independent review of the current building control model, including, following the Grenfell Inquiry’s recommendation, considering whether to remove commercial interest from building control and whether to move to a national authority decision model.
The aim is to report to the government this autumn with a response before the end of the year.
See: https://www.gov.uk/government/news/membership-of-the-building-control-independent-panel
5. Government updates residential remediation
The government has updated its Code of Practice for the remediation of residential buildings.
It has also updated its factsheet which summarises, for residents living in buildings where developers have committed to remediate historic fire safety defects, key information about the remediation contract.
See: Code of Practice for the remediation of residential buildings; and
Developer remediation contract: resident factsheet
6. Planning and Infrastructure Bill impact assessment
The government has published an assessment of the impact the measures the Planning and Infrastructure Bill will have.
See: https://www.gov.uk/government/publications/planning-and-infrastructure-bill-impact-assessment
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