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In view of the government鈥檚 proposals for amending the Construction Act, Tony Bingham was, in my opinion, quite right to touch on the implications of dropping the requirement in Section 107 for an agreement in writing (6 July, page 57).

This is by far the most significant of the proposals and a welcome surprise because it represents a complete change of mind on behalf of the government. Extending the ambit of the legislation to contracts that are purely oral or partly oral and partly in writing would clearly further the laudable objectives behind the legislation.

However, I was left puzzled and somewhat concerned by Tony鈥檚 statement that the government should now extend the legislation to embrace 鈥渁ll 鈥榓greements鈥� irrespective of whether they are 鈥榗ontracts鈥欌��. First, I share the view expressed by Graham Watts (3 August, page 31) that any further attempt to move the goalposts at this stage is likely to be fatal to the whole package.

What puzzled me was Tony鈥檚 interpretation of Judge Wilcox鈥檚 decision in Bennett vs Inviron, which he employed in aid of his suggestion. In that case, so Tony suggests, the judge held that there was in existence an 鈥渁greement in writing鈥�, although not a 鈥渃ontract in writing鈥�, which he (the judge) described as an 鈥渆quitable agreement鈥� to do building construction works. It should be remembered that Section 104 defines 鈥渃onstruction contract鈥� as an 鈥渁greement鈥� to perform construction operations.

This startling proposition forced me to dig out the judgment in that case and I am not sure that I agree with Tony on this one. First, a little context might help. In that case Bennett was seeking to enforce an adjudicator鈥檚 decision requiring Inviron to pay it money pursuant to a letter of intent issued by Inviron. Inviron challenged the adjudicator鈥檚 jurisdiction to make that decision arguing that, whatever relationship did exist between the parties, it did not amount to an 鈥渁greement in writing鈥� for the purposes of Section 107.

It seems clear from the decision that the judge correctly viewed the existence of an actual contract as essential for the legislation to apply

Bennett鈥檚 claim had been presented in the adjudication on two alternative footings. Its primary argument was that the letter of intent upon which it relied did fall within the ambit of Section 107. Alternatively, it claimed the money on a quantum meruit basis, which is a reference to a restitutionary, rather than a contractual, remedy. The law of restitution is based on the principle of unjust enrichment and not the existence of an agreement between the parties.

Inviron successfully argued before the judge that because the letter of intent was expressly headed 鈥渟ubject to contract鈥�, it could not amount to a contract of any sort.

So far as the claim for quantum meruit was concerned, the judge commented that 鈥渋n default of the contract being concluded, [the parties had] agreed a request and restitutionary basis of remuneration鈥�. This, however, did not amount to an agreement in writing for the purposes of Section 107. It seems clear from the decision that notwithstanding the definition in Section 104 referred to above, the judge correctly viewed the existence of an actual contract as essential for the legislation to apply.

In essence Tony is urging the government to extend the scope of the legislation beyond 鈥渃ontracts鈥� of all hue, as in the existing proposals, to 鈥渁greements鈥� of all hue, irrespective of whether they amount to 鈥渃ontracts鈥�. However, to treat the Bennett case as supporting such an extension is misleading since it is incorrect to characterise the relationship that existed in that case as an agreement of any sort.

Quite apart from the practical risks of seeking any change to the amendments, extending the legislation in the way that Tony suggests would simply be unworkable. Whereas the average adjudicator should be perfectly able to satisfy himself about the existence of a contract between the parties underpinning his jurisdiction, to found his jurisdiction simply upon the existence of an 鈥渁greement鈥�, whether binding or not, would be a bridge too far. To base it upon the application of restitutionary principles would surely be unthinkable.