Here the court considered the application of the Unfair Contract Terms Act 1977 (UCTA) to a set of standard subcontract terms. The contractor, Mitchell was engaged to design and build a warehouse. It subcontracted ground treatment works to a sub-contractor, Regorco (formerly Roger Bullivant). The works were completed, and the warehouse was subsequently acquired by Commercial Management. They brought a claim against Mitchell and Regorco (under a collateral warranty) following settlement of the warehouse slab.
The court considered a number of preliminary issues governing the subcontract between the parties, in particular whether Regorco's standard terms had been incorporated into the sub-contract, and if so whether UCTA applied and if so whether clause 12(d) limiting the time in which claims might be brought was reasonable.
The court held that the sub-contract terms did not need to be incorporated in their entirety for UCTA to apply, but that clause 12(d) had not been incorporated. If it had been, UCTA would have applied as it formed part of the written standard terms of business, and the clause would not have satisfied the reasonableness test due to the difficulties of complying with it (it set a 28 day time limit for notifying a claim).
To read more, please click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
