Do you have a construction contract? The Technology & Construction Court gives a concrete answer

The case: Universal Sealants (UK) Ltd (t/a USL Bridgecare) v Sanders Plant and Waste Management Ltd [2019] EWHC 2360 (TCC) 

Facts

The claimant, Universal Sealants (UK) Ltd (Universal) sent the defendant, Sanders Plant and Waste Management Ltd (Sanders) a subcontract order for the supply of a particular grade of concrete. The parties had a previous history of dealings and the claimant had an account with the defendant. 

The concrete was required to fill an expansion joint in a road. The concrete was delivered and placed by a gang of concrete layers. Universal subsequently complained that the concrete delivered was not what had been ordered and the engineer required it to be dug out and replaced. The parties disagreed on whether Sanders was in breach of contract. The dispute was referred to an adjudicator under the subcontract order.

Sanders maintained that the subcontract had not been made on the terms of Universal’s order, but instead had been made on the terms of its delivery note which had been signed by Universal on delivery of the concrete. In addition, Sanders argued that the subcontract did not involve the carrying out of construction operations because it was the delivery to site of materials and thereby one of the exclusions within s.105(2)(d)(ii) of the Construction Act 1996. 

Decision

The Technology & Construction Court (QBD) Judge considered the claim and found that: 

• The subcontract was on the terms of the subcontract order, incorporating Universal's terms and conditions. This was an offer to purchase concrete which had been accepted by Sanders’ conduct in delivering the concrete to the site. The delivery note was too late to be a counter-offer. The evidence was that it had been signed only after discharge of the concrete.
   
• The supply of concrete was within the exception contained in s.105(2)(d)(ii) as:
   
  • it was unnecessary for the contract to refer to or use the word “installation”, but its absence was indicative of the nature of the subcontract; and
     
  • the delivery of materials to site was excluded from construction operations “except under a contract which also provides for their installation”. The contract made no reference to installation and there was no price or rate for installation in the contract. The court rejected Universal’s argument that pouring the concrete amounted to installation. Concrete starts to set once it is mixed and because of this, it is almost always poured where it is required. The act of delivery and pouring amounted to the same thing: delivery. There was evidence that Universal instructed Sanders where to pour the concrete and Universal’s layers were standing by to position the concrete. Installation was something additional to delivery as stated by the words "also provides" within s.105(2)(d)(ii). Sanders did nothing further to the material and therefore there was no installation. For example, if the contract had been for the delivery of bricks this would fall within the exclusion unless the supplier "also" did something else, like laying the bricks. This was an unsurprising result and the judgment notes that the provision of concrete is unusual as it normally sets upon its delivery. 

Conclusion

It is important to know whether your contract is a construction contract or not. Section 105(2)(d) of the Construction Act 1996 excludes various construction operations except where the contract also provides for installation. However; Installation is something additional to delivery. The pouring of concrete is not considered ‘installation’.