There is still a tendency towards informality in domestic building contracts, although the potentially dire consequences of not having a written agreement should be common knowledge. In one case, a couple and their builder became mired in costly litigation that could have been avoided had a lawyer been consulted at the outset.
The couple paid £375,000 for a house with the intention of completing its conversion into two homes. They employed a builder who knew the woman’s father and issued his instructions largely orally or by text. A dispute arose as to how much was owed to the builder and as to whether any of the work that he had carried out was defective. In the absence of a written contract, they could not even agree on the rate of VAT that should be applied to the builder’s invoices.
After the builder launched proceedings, both sides raised numerous detailed issues concerning the progress of the project, right down to the way in which bi-folding doors had been fitted. After assessing the value of the builder’s work, and making deductions for defects and other matters, a judge found that the couple owed him just over £44,000, to which VAT at 17.5 per cent would be added.
The facts of the case emerged as the Court of Appeal dismissed both the couple’s appeal and the builder’s cross-appeal against that decision. The Court praised the manner in which the judge had dealt with a fractious piece of litigation in which entirely disproportionate legal costs had been incurred.