Davis Contractors Ltd v Fareham Urban District Council [1956] UKHL 3

Facts

The appellants bid on a contract with the respondents to construct 28 houses over the course of eight months. The tender was accompanied by a letter stating that the tender was contingent on adequate supply of materials and labour being available when needed to complete the work within the stipulated time frame. Later, the appellants and the respondents agreed to construct the houses at a predetermined price, subject to certain changes. The contract included a clause that listed a variety of preliminary papers. One of these was listed in the tender, but not in the letter.

The work took 22 months instead of 8 months due to a lack of skilled labor. The appellants were paid the specified sum plus any increases or changes that had been agreed upon. They maintained, however, that they were entitled to extra money due to quantum meruit. The appellants further claimed that the contract's price was not binding because it was subject to an overriding condition in the letter, or because the contract's fulfillment was delayed owing to a labor shortage, which frustrated the contract.

Issues

(1) Do the appellants have a right to be entitled to more money based on quantum meruit?

(2) Did the letter in the tender override the contract?

(3) Was the contract frustrated as a result of a labor scarcity that caused the contract's performance to be delayed for an extended period of time?

Held:

The contract was not frustrated. The appellants are not entitled to additional compensation based on quantum meruit because:

(1) The letter in the tender, as well as the conditions set forth in it, were not included in the contract.

(2) The fact that the two parties expected the job to be completed in eight months did not result in the contract being frustrated when it was discovered that it could not be completed in that time.

Mentioned above is the case brief.

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